Following the coronavirus pandemic, many employers across different industries embraced hybrid working. Although return-to-work requirements varied, a common minimum request was for employees to spend 2 or 3 working days physically in the office. That was also the case for the Financial Conduct Authority FCA. Once covid restrictions eased, the FCA requested that all staff should attend an office location for 40% of their working time. The remaining 60% of hours could be carried out remotely. The senior leadership team were expected to attend an office for 50% of their working time.

Throughout last year, many employers started to take a tougher approach to office attendance, either increasing the amount of working time employees must spend in the office or taking a firmer stance enforcing existing expectations. This remains a top priority for 2024.

Many employers anticipated (and experienced) a surge in flexible working requests when initially asking employees return to the office following the pandemic. Although upcoming changes to the flexible working regime are far from groundbreaking, they may still result in another uptick in requests. As employers continue to prioritise a return to office, responding to requests to work remotely continues to be a challenge for employers.

Flexible working reform

We have previously written about the upcoming changes to the flexible working regime. In summary, the key legislative changes which will take effect from 6 April 2024 are:

• An increase in the number of requests that can be made in a 12-month period from 1 to 2.
• A requirement that employers respond to requests within 2 months, down from 3 months.
• Requiring employers to consult with the employee on the request before it is rejected.
• Removal of the requirement that the employee explains any effect that their request may have on the employer and how that might be dealt with.

Separate regulations also make the right to request flexible working a ‘day 1’ right, removing any need for qualifying service.

Importantly, the wide-ranging reasons why an employer can refuse any request will remain unchanged. Employers must rely on one (or more) of eight statutory business reasons, including a detrimental impact on quality or performance, to refuse a request.

Earlier this month, Acas published their revised updated Code of Practice on handling in a reasonable manner requests to work flexibly. We have previously written about the draft updated Code and there are only minor changes to that. For example, the Code now recommends that, where a request cannot be accepted, employers should discuss with the employee alternatives to their request and consider use of a trial period. The Code also now expressly states that, although employees don’t have a statutory right to appeal a decision, it is ‘good practice’ to allow them to and that organisations of all sizes should assign a different manager to handle any appeal.

A flexible working request to work entirely remotely

Employers continue to grapple with how to respond to flexible working requests for home-working in the post-pandemic world of hybrid working. Where employers allow some element of home-working, how can they justify refusing a request from an employee who wants to work from the office, say, only 1 day a week? Or who wants to work entirely remotely?

These issues have recently been considered by the Employment Tribunal (ET) in Miss Wilson v Financial Conduct Authority. The claimant was employed by the FCA as a Senior Manager (although she was not part of the senior leadership team). The claimant directly managed 4 employees and indirectly managed a further 10. She made a request to work entirely from home on 9 December 2022.

The FCA rejected the claimant’s request because of the negative impact her requested working arrangement would have on her team. In a letter confirming their decision to the claimant on 2 March 2023, the claimant’s line manager stated that working from home ‘could’ have a detrimental impact on performance or quality of output. Although it was acknowledged that the claimant had performed well whilst working from home and had built good working relationships with colleagues, the line manager had concerns about the claimant not being able to carry out face-to-face training sessions, attend away days or coach new joiners. The FCA also referred to the claimant’s ‘vital leadership role’ as Senior Manager and the importance of junior colleagues being able to meet senior managers.

On 9 March 2023, the claimant appealed the decision to refuse her request. However, the appeal was not successful and the claimant was notified of this on 29 March 2023.

The ET’s decision

The ET dismissed the claimant’s claim that her flexible working request had been rejected based on ‘incorrect facts’, namely that working entirely from home would detrimentally impact quality and performance. The ET found the claimant’s line manager had carefully analysed the factors for refusing the claimant’s request and that it had not been based upon incorrect facts.

In addition to the reasons set out above, the line manager was found to have assessed a number of duties which would be detrimentally impacted if the claimant’s request was accepted. These included meeting and welcoming new staff members, providing internal training, supervision, ad-hoc advice and support, attendance at in-person events, conferences and planning meetings and attending the ‘Department Day’ where the management team would present topics to the department (ideally in a ‘market stall’ layout) and spend the day together.

The ET recognised that in the modern workplace, good technology can allow people to work together across different locations. However, they also acknowledged that remote attendance has weaknesses when there is a ‘fast paced’ exchange or ‘rapid discussion’, for example in training events or planning meetings. The ET also noted the limitations of observing and responding to non-verbal communication and body language outside of formal events (which was particularly relevant given the claimant’s senior role). At the hearing, the line manager gave an example of providing support to a team-member who had ‘their head in their hands’. The ET agreed that these were all factors which could result in a detriment to the quality and performance of the claimant’s work, notwithstanding her previously good performance.

Although the claimant was not successful in arguing that the FCA’s rejection had been based on incorrect facts, the ET held that there had been a clear breach of the statutory time limits. The appeal decision letter had been issued 21 days outside the ‘strict’ statutory 3-month time limit and an extension had not been agreed between the parties. This was despite the claimant not lodging her appeal until after the 3-month window. The ET was mindful that the FCA were considering their flexible working policy and issued 1 weeks’ pay (amounting to £643) by way of compensation. The maximum award permitted is eight weeks’ pay. Part of their reasoning for just awarding 1 week’s pay was that it was clear the claimant’s request was being considered and that the final decision was notified shortly after the expiry of the statutory time limit.

Practical pointers for employers

Although Tribunal decisions are not binding, this decision may nonetheless be welcomed by employers as they seek to push for greater mandatory attendance. There are a number of practical take-away points for employers:

• Each flexible working request should be assessed individually depending on an individual’s role, responsibilities and circumstances. Employers should avoid adopting a blanket approach to responding to requests.

This ET decision by no means gives employers carte blanche to refuse all requests to work from home remotely full time. The ET considered it pertinent that the FCA had given ‘critical thought’ to the request and noted that ‘there will not be one solution which will work for all companies or even all roles within a company’. Indeed, the Employment Appeal Tribunal has previously upheld a decision that a flexible working request was unfairly rejected when it had not been properly considered or investigated.

• When considering a request, employers should bear in mind alternative working arrangements. In this case, the FCA apparently suggested to the claimant that they might be able to consider an alternative arrangement where she came into the office some of the time, but less than the 40% requirement. The detail of these discussions is not clear because they were not documented (another lesson for employers to make sure they record all of what is discussed!) but it seems that the claimant was not prepared to consider anything other than full time home-working.

From 6 April 2024, legislation will now require employers to consult with employees before rejecting a request. The revised Acas Code of Practice is clear that a formal consultation meeting is needed and that alternative options should be explored if the original request cannot be agreed to, including whether a trial period is appropriate. Even though the pandemic was arguably a ‘trial period’ for homeworking, a formal trial period may still be helpful to assess the impact of a remote-working arrangement when other colleagues are attending the office more frequently. All discussions about alternatives (even if informal) should be well documented.

• Employers should ensure there are clear, centralised procedures in place to deal with flexible working requests with a clear alignment of responsibilities. In addition, managers should be trained on such procedures. In the above case, the claimant’s line manager was upfront that the delay was caused because she was not aware it was her responsibility to progress the application.

Internal procedures will become even more critical from 6 April 2024, when employees will not only be able make a request from their first day of employment but will also be able to make 2 requests a year. Do you have adequate records of all requests made and when?

• Flexible working requests need to be dealt with swiftly. The ET’s view in the Wilson case was that flexible working requests should be dealt with ‘expeditiously’ and that a company of the FCA’s size with sufficient resources should have clear procedures in place. Although the ultimate financial remedy for breaching the time limits is relatively low, any procedural breach may impact employee relations or result in an employee instigating other internal processes (such as raising a grievance) or starting litigation.

Employers will be under even more pressure to consider requests in a timely manner from 6 April 2024, when the time limit for employers to respond to any request (and consider any appeal) is reduced to 2 months. If an extension to the timings is needed, this should be discussed at an early stage with the employee. With hindsight, once the claimant’s line manager clocked that it was her responsibility to progress the request, she should have sought to agree an extension of time, but hindsight is a marvellous thing!

The revised Acas Code of Practice on requests for flexible working can be accessed here. The Miss E Wilson v Financial Conduct Authority judgment is available here.