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Employee wins £180,000 in compensation for refusal of flexible working request

In a widely publicised case, a female employee recently won a tribunal claim against her employer because they refused to let her reduce her days of work or leave work early to pick up her child from nursery.  The headline grabbing pay out was awarded after the Employment Tribunal held that the employer had indirectly discriminated against the employee on the grounds of her sex. 

So, what went wrong in this case and how can you, as an employer, avoid a similar situation arising in your business?

The Law

This case deals with two main areas of law – the statutory right to request flexible working and indirect sex discrimination. 

The statutory right to request flexible working is currently available to employees who have over 26 weeks’ continuous employment and want to alter their working hours or arrangements.   The legal framework for dealing with such requests is set out in section 80F- 80I of the Employment Rights Act which outlines the form the request must take and how the employer must handle it.

In summary, the employee requesting the change to their contract terms must submit this in writing and explain how the change would affect the employer and how these issues could be dealt with.   The employer, on receiving the request, must then consider the request in line with the legal framework and, if the request is to be refused, must give reasons for the refusal which fall into the 8 business reasons listed in section 80G which are:

  1. the burden of additional costs;
  2. detrimental effect on ability to meet customer demand;
  3. inability to re-organise work among existing staff;
  4. inability to recruit additional staff;
  5. detrimental impact on quality;
  6. detrimental impact on performance;
  7. insufficiency of work during the periods the employee proposes to work;
  8. planned structural changes; and
  9. such other grounds as the Secretary of State may specify by regulations.

An employee has the legal right to appeal a refusal.  

The right to request flexible working is often criticised for having little “teeth” as it only conveys a right to request flexible working and, on the face of it, all the employer needs to do is follow the statutory process and make sure it cites one of the 8 business reasons in its reasons for refusal.  

However, employers must always be alert to and considerate of rights under discrimination laws which can often come into play when dealing with flexible working requests – e.g. where the request is made for reasons relating to an employee’s disability or (as in the case in question) to accommodate childcare arrangements.   It is far harder to justify a refusal of a flexible working request if the effect of the refusal disadvantages a group of people who share a protected characteristic (e.g. sex, race, disability, religion or belief) over others who do not share that characteristic.      

Under section 19 of the Equality Act 2010, indirect sex discrimination occurs where:

  1. A applies to B a provision, criterion, or practice (PCP).
  2. A applies (or would apply) that PCP to persons not of the same sex as B.
  3. The PCP puts or would put persons of B’s sex at a particular disadvantage.
  4. The PCP puts or would put B at that disadvantage.
  5. A cannot justify the PCP by showing it to be a proportionate means of achieving a legitimate aim.

In summary, indirect sex discrimination arises where an employer has a rule, policy, or practice which it applies to everyone, but which puts employees of one sex at a particular disadvantage in comparison to the other. Unless the employer can objectively justify the rule, policy or practice which is having this discriminatory effect, they are at risk of a claim. 

A typical example of indirect sex discrimination is an employer refusing the request of a female working parent to work part time rather than full time.  The requirement that the job must be done full time is likely to disadvantage women as a group, since women generally bear a greater part of domestic and childcare responsibilities than men and are more likely to need to work part time (often referred to as the “childcare disparity”).   Unless the employer can demonstrate that it has legitimate business reasons for needing a full-time worker to do the job, it is likely that the employee will have a claim for indirect sex discrimination against the employer. 

The Facts

Mrs Thompson was employed by Manors (the trading name for Scancrown Ltd), an estate agency, as a sales manager.   Her basic salary was £60,000 plus 12% commission on sales and a bonus if she met her sales target.   In May 2018 she announced to her employer she was pregnant, and she subsequently went on maternity leave for a year from October 2018 to October 2019. 

On 10 October 2019, Mrs Thompson raised a formal grievance regarding various issues that she alleged had arisen during her pregnancy and her maternity leave.  She also made a formal flexible working request to change her days of work from 5 to 4 and to finish early at 5pm instead of 6pm because her daughter’s nursery shut at 6 and it was an hour’s drive from the office. 

Following a meeting to consider her request on 15 November 2019, her request was refused by Manors who cited the business categories of (1) the burden of additional costs; (2) detrimental effect on ability to meet customer demand; (3) inability to reorganise work among existing staff; (4) inability to recruit additional staff; (5) planned structural change.   In addition to these 5 categories for refusal, she was also told that clients needed to have consistency in relation to sales managers and that this was another reason they couldn’t recruit additional staff to cover the proposed hours.   No further explanation was offered.

Shortly afterwards, Mrs Thompson resigned and, in addition to a number of other claims, brought a claim for indirect sex discrimination against Manors in relation to the refusal of her flexible working request. 

The Finding

The Employment Tribunal concluded that Mrs Thompson’s employer had indirectly discriminated against her on the grounds of her sex for refusing her request to work flexibly following her return from maternity leave. 

Addressing each element of an indirect sex discrimination claim, the Employment Tribunal held as follows:

  • That her employer applied a provision, criterion or practice (PCP) of requiring that a sales manager had to work full time, Monday to Friday, until 6pm.
  • That this requirement put women at a substantial disadvantage in comparison to men because women are more likely to carry childcare responsibilities than men.
  • That this requirement put Mrs Thompson at a particular disadvantage because of her childcaring responsibilities including that her daughter’s nursery shut at 6pm and she would not be able to get there on time if she worked until 6pm. 
  • That the employer’s refusal to allow Mrs Thompson to reduce her hours was not objectively justified or, in the language of the statute, “was not a proportionate means of achieving a legitimate aim”.

When considering justification, the Tribunal considered each of the business reasons given by the employer for rejecting Mrs Thompson’s request.   The only factor the Tribunal considered was significant was the “ability to meet customer demand” because it said it recognised that the relationships that sales managers had with vendors were significant for success in sales and that there was evidence that vendors dealt serially with a number of properties, making long-term relationships especially important.   However, it found little evidence to support the other factors relied on by the employer, namely: the burden of additional costs; the inability to reorganise work among existing staff; inability to recruit additional staff and planned structural change.   Accordingly, the Tribunal held that the employer’s refusal to agree to the proposed reduction in hours of work was not proportionate to the real need of the business to maintain successful relations with customers. 

At the subsequent remedies hearing, Mrs Thompson was awarded the sum of £184,961.32 as compensation for indirect discrimination because of sex which included interest, past and future loss of income and pension contributions, and £13,500 for injury to feelings.

Points to note and action to take

1. This case demonstrates the importance of handling requests for flexible working carefully and the need for employers to fully consider the request, and the employee’s reasons for making it, before reaching any decision, bearing in mind the risk of indirect discrimination claims.

2.The case also highlights that, if a decision is made to reject a request for flexible working, it is potentially risky for an employer to simply refer, as its reasons for refusal, to one or more of the 8 statutory business categories (even though this is all that the statutory framework for dealing with flexible working requests requires). 

It is always advisable to provide an explanation of how you reached your decision and why you are relying on the business categories chosen.  Where there is a risk of a potential indirect discrimination claim, you also need to be able to provide evidence to support your reasons for refusal, to demonstrate that you have properly considered any proposals made by the employee as to how any issues can be dealt with and that you have thoroughly explored if there are alternative ways of achieving your business aims which will avoid the discriminatory effect in question.   In this case, there was no evidence that the employer investigated Mrs Thompson’s proposals as to how the business could cover her hours on the days she wasn’t working or left early, including asking an existing member of staff to cover her duties.  

3. It is worth remembering that an employer who is unsure whether the flexible working arrangement will be successful or not, can agree a trial period with the employee to give both parties the opportunity to find out how the arrangement works in practice before committing to a permanent change to terms and conditions.  

You can read the full judgement here: JUDGEMENT

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The information contained in this blog post is provided for guidance and is a snapshot of the law at the time it is written. It is provided for your information only and should not be used as a substitute for obtaining legal advice that it specific to your particular circumstances.

The guidance should not be relied upon in any decision making process. It is strongly recommended that you seek advice before taking action.

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