Miss Wilson v Financial Conduct Authority: 2302739/2023
JUDGMENT
[1]On 9th December 2022 Miss Wilson (the Claimant), who works as a Senior Manager for the Financial Conduct Authority, the Respondents, submitted a Flexible Working Application pursuant to s.80F of the Employment Rights Act 1996 (as amended) (“the Act”).[2]The Application sought a change to the Claimant’s terms of employment to enable her to work entirely ‘remotely’ in the sense of using computer and other electronic equipment to complete her work without ever attending a physical office location. The Law[3]Section 80F of the Act provides that a qualifying employee may apply for a change in the terms and conditions of their employment, including: (iii) Where, as between his home and a place of business of his employer, he is required to work[4]Section 80G of the Act sets out the employer's duties in relation to an application under Section 80F of the Act; it provides that: "An employer to whom an application under section 80F is made -(a) shall deal with the application in accordance with regulations made by the Secretary of State, and(b) shall only refuse the application because he considers that one or more of the following grounds applies…. (v) Detrimental impact on quality; (vi) Detrimental impact on performance[5]Section 80H(1) of the Act provides that: "(1) An employee who makes an application under section 80F may present a complaint to an employment tribunal-(a) that his employer has failed in relation to the application to comply with section 80G(1), or(b) that a decision by his employer to reject the application was based on incorrect facts".[6]Pursuant to s.80G(1B)(a) a final decision (which includes the finalisation of any appeal process) has to be notified to the Employee within 3 months (i.e. in this case it was to be notified by 8th March 2023) unless any extension to that period was agreed between the parties. The Background[7]It is common ground that Miss Wilson has been employed by the Respondent since 2005. Her initial contract indicated that her normal place of work would be at a physical office location. In around the early part of 2020 however there is also agreement between the parties that there was a recognition that the Claimant would work from home for what are described as ‘health reasons’. These are not elaborated upon but they appear to be connected with the growing awareness of the COVID-19 virus. The virus led, within a few weeks of the agreement, to wholesale changes of working practices with most of the Respondent’s staff, in accordance with government guidance being told not to attend the office. Shortly thereafter the series of national ‘lockdown’ measures took effect.[8]Following the easing of the pandemic restrictions the Respondents reviewed their working practices and in due course settled upon a policy that staff should attend office locations for 40% of their working time with 60% of their hours to be worked remotely. Senior leaders at the Respondents were expected to attend an office for 50% of their working time, although this did not include the Claimant. This was the Respondent’s policy by the time Miss Wilson’s request came to be considered.[9]On 28th February 2023 Miss Wilson met with her line manager, Miss Lipscombe-Mitchell who was responsible for deciding the application. On 2nd March a decision letter was sent to Miss Wilson by Ms Lipscombe-Mitchell. The letter set out, amongst other things, that the Respondents: “aim to be as flexible as possible, offering options that include variable hours, part time working, and home working and when making decisions on flexible working requests the FCA considers both individual’s circumstances as well as putting the business need at the heart of every decision.” The letter also noted that as far as the Claimant was concerned: “I recognise you have performed very well during the period when you have worked from home and have built effective relationships with colleagues despite not meeting in person.”[10]Nonetheless, the letter refused the application. The letter explained: “Approving this request could have a detrimental impact on performance or quality of output, as you will not attend face to face training sessions, departmental away days/meetings, and you will not be able to provide face to face training or coaching to team members or new joiners. Your ability to input in Management strategy meetings and be involved in in-person collaboration will also be negatively impacted.” It went on: “This is particularly felt as you are a Senior Manager and play a vital leadership role for the department. It is a reasonable expectation that junior colleagues would have the ability to meet senior managers in person from time to time. By agreeing to this request, this would not be possible. I believe this would have a negative impact on the department.” The letter further set out an extract from a PULSE article which highlighted what were said to be the benefits of working from an office location.[11]Miss Wilson appealed the decision to refuse the request on 9th March 2023. Her appeal was considered by Dominic Cashman, the Director of Authorisations for the Respondents. On 29th March 2023 Mr Cashman sent a letter rejecting her appeal. In the letter Mr Cashman observed: “I understand your overall point of appeal is that you have successfully been able to perform your role working from home so far, and you have given examples to that effect. In your view, therefore, it is not sufficient for Hannah to say that permanently working from home ‘could’ have an impact on performance/output/your contribution, when you believe you have evidence to show otherwise, including At Our Best awards and good 360 feedback. The following sets out the points I have considered in this regard. First, you are a senior member of the department and part of Hannah’s SLT, and therefore your performance and output cannot just be viewed through the very linear lens of your own perspective. It also has to be viewed in relation to those that you manage directly and indirectly within your chain of command. I agree that your performance is good and this is reflected in your end of year grade, however I also believe it is reasonable for the FCA to conclude that it would still be better and of real benefit to you and in particular, your team and your team’s performance, if they were able to connect with you in person in the office. This is in line with the FCA’s ethos and staff policies.” The Issues[12]It is agreed between the parties that the issues for this tribunal are: 1) Did the Respondent breach s80G(1)(aa) ERA by failing to communicate the appeal outcome within the decision period provided for by s80G(1B) ERA 96? 2) Did the Respondent reject the Claimant’s application for flexible working based on incorrect facts. The Claimant relies on the following matters as amounting to incorrect facts:a. An assertion that if the Claimant worked entirely from home, it would have a detrimental impact on quality and performance. 3) If the Claimant succeeds in any part of her complaint should the Tribunal a. Make an order for reconsideration of the application; and/orb. Make an award of compensation. The First Issue Did the Respondent breach s80G(1)(aa) ERA by failing to communicate the appeal outcome within the decision period provided for by s80G(1B) ERA 96? The Facts[13]As set out above it is agreed that the application was made on 9th December 2022 and that the appeal decision letter notifying the outcome is dated 29th March 2023 some 21 days after the statutory decision period. It is agreed that no express agreement was ever reached to extend the time limit.[14]Miss Lipscombe-Mitchell gave evidence that although she was aware of the application shortly after it was made she had not initially appreciated that she was responsible for progressing it thinking it was a matter for the Human Resources department. No other evidence is given explaining why the decision was made outside of the time limit. I find that this initial confusion led to the fact that there was no early action to arrange a meeting with Miss Wilson and/or consider the application which would have allowed the appeal process sufficient time to conclude within the prescribed period. Submissions[15]In submissions to me Miss Thomas invited me to consider the fact that in this case the appeal request was not made until after the expiry of the three month time limit and so the appeal decision could never have been made within the statutory timeframe. She draws my attention to the decision in Whiteman v CPS Interiors Ltd and Others ET 2601103/2015. She acknowledges that there was no expressly agreed extension to the time limit here but argues that any breach is technical and should not lead to any award of compensation. Mr Blitz on behalf of Miss Wilson submits that the breach of the time limit is clear, an award of compensation should follow but he does not ask that the tribunal make a finding that the decision should be reconsidered if this ground alone succeeds. Conclusions on the First Issue[16]I am satisfied that the statutory decision period time limit was breached. There is no real argument otherwise. The Respondents have, as would be expected of an organisation of the Respondent’s size, a policy for the consideration of flexible working requests. As set out above Miss Lipscombe-Mitchell’s frank evidence that initially she was unaware that she should be progressing the application led to delay and ultimately I am satisfied the decision not being made and notified within the period. Again given the resources and standing of the Respondents there was no reason why they could not have sought to agree an extension to the period with Miss Wilson when it would have become clear that a decision could not be concluded within the relevant time.[17]It is the clear intention from the legislation that flexible working requests should be dealt with expeditiously and so the time limit is a strict one. An outstanding request places considerable stress upon an employee who needs the certainty of a decision to enable arrangements to be made for a changed working regime or to consider their position if a request is refused. There is therefore a negative impact of applications being left unresolved beyond the required period. An employer of the size and with the knowledge and resources of the Respondent is clearly well placed to deal with such applications in a timely manner as is envisaged in the legislation but that did not happen here. I am satisfied that this breach is one which should be met with an award of compensation albeit there is mitigation in that the process was clearly under consideration and the final decision was notified shortly after the expiry of the statutory limit. The very worst breach of these provisions can only be met with a compensatory payment of 8 weeks pay, in this case I am satisfied that 1 weeks’ pay should be awarded in compensation. The Second Issue Did the Respondent reject the Claimant’s application for flexible working based on incorrect facts. The Claimant relies on the following matters as amounting to incorrect facts: An assertion that if the Claimant worked entirely from home, it would have a detrimental impact on quality and performance. The Facts[18]Miss Lipscombe-Mitchell gave evidence and it is necessary to set out her evidence in some detail given that she was the decision maker in this case and as such it is submitted she based her decision upon incorrect facts. In her witness statement Miss LispscombeMitchell set out the following matters which I summarise: - Miss Wilson’s role as a Senior Manager was to work alongside Miss LipscombeMitchell in managing the department; - In initially considering the application she had thought that Miss Wilson had a health condition which had led to the flexible working arrangements then in place. She spoke informally to Miss Wilson in February to see if this was position and if any medial input or input from Occupational Health was required. Miss Wilson confirmed to her that she as not citing any health condition as part of the flexible working application. - She discussed with Miss Wilson whether a more flexible working arrangement, where she came into the office less than the policy mandate of 40% of the time, given her strong performance review might be agreed but she was told that this would not be acceptable. - At the flexible working meeting on 28th February 2023 Miss Wilson did not wish to add anything further to the application she had made; - She considered the application reflecting upon Miss Wilson’s strong performance to date and acknowledging that much of the work can be done from a remote location using technology. - Nonetheless she found the following factors where she felt that working remotely would have a detrimental impact on the quality and performance of Miss Wilson’s work: i) Meeting and welcoming new staff members ii) Internal training, supervision and department needs where a line manager has a visible presence in the office to provide structured or informal/ad hoc advice and support to team members iii) Attendance at in-person events and conferences and planning meetings run within physical office accommodation; iv) Attendance at weekly ‘Cascade’ meetings where information is imparted by Senior Managers and individual and team successes are acknowledged and celebrated v) Authorisation Leadership sessions where managers, Heads of Departments and Directors meet to discuss key topics vi) ‘Department Day’ – management team would present topics to the department and spend the day together. Miss Lipscombe-Mitchell would want to run the session in a ‘market stall’ layout so staff, especially new staff could move around and physically meet the managers.[19]Ms Lipscombe-Mitchell acknowledged that whilst it was possible to conduct a lot of the activities she had listed remotely her assessment was they were more effective when conducted in person. She also observed that as a Senior Manager Miss Wilson was required to enforce the Respondent’s policies and procedures, including the 40% attendance policy, which would be difficult when Miss Wilson was not herself following the same policy. It was in those circumstances that she refused the application.[20]Miss Lipscombe-Mitchell was cross-examined. - She was asked if she had put pressure on Miss Wilson to withdraw her flexible working application when they initially spoke about it in February, she denied that she had but said she had been exploring if Miss Wilson might wish to consider an alternative route to pursue OH support as an informal agreement might be reached if there was a medical condition ‘in play’. - It was highlighted that there was no suggestion of a ‘compromise’ solution of possibly a 10 or 20% attendance in either the minutes of the meeting of 28th February or included in the letter of 2nd March. Miss Lipsombe-Mitchell agreed but said as the Claimant had indicated that was not acceptable when they spoke informally she did not mention it in either context. - It was suggested that even after the end of the requirements of the COVID pandemic to work from home there were FCA employees who continued to do so – Miss Lipscombe- Mitchell agreed there were. - It was suggested that there was a move to location agnostic recruitment at the FCA and the example was given of an employee who lived in Edinburgh. It was further suggested that there was no need for teams to be physically located in the same place. Miss Lipscombe-Mitchell agreed but said that there was an expectation that at times staff would all co-locate. - It was put that the flexible nature of the Respondent’s policy which allowed staff to choose when they might attend the office meant that in reality there was a very limited likelihood of the Claimant actually meeting the same staff members on a regular basis. As such it was suggested the claimed benefits of developing personal relationships through face to face meetings were significantly overstated. Miss Lipscombe-Mitchell stated that managers often had regular days when they choose to attend which allowed staff to be able to approach them should they wish to, she also highlighted the ability that office working gave to allow a manager to intervene and support when they see a member of staff ‘with their head in their hands’ for example. - It was said that the factors which Miss Lipscombe-Mitchell had highlighted as being detrimental were in fact overstated, it was highlighted that the department was successful and that Miss Wilson had been an important part in that success. It was put that there was no evidence that face to face working was better. Miss LipscombeMitchell agreed the department was a success and that Miss Wilson was an important part of it but maintained that she had not overstated the factors which she judged were detrimental. She maintained that in her personal and professional experience face to face engagement was better and that there were limitations upon the use of technology which was not well suited to some of the matters she had set out. - She was taken through the bundle of material of the Claimant’s reviews and 22 positive references/reports in particular demonstrating Miss Wilson’s ‘soft skills’. All these dated for the period of time she had been working remotely. It was highlighted that none of the material raised any issue with the performance or quality of Miss Wilson’s work. Miss Lipscombe-Mitchell agreed and said she was aware of the material and the excellent record of the Claimant when she made the decision. She indicated however that in her opinion Miss Wilson could have performed better if she had been working in the office for some of that period and that going forward she was looking to improve further the quality of the Claimant’s work. - It was highlighted that the letter of 2nd March 2023 did not specify matters such as ‘Cascade’ meetings or the ‘departmental day’ and it was suggested that these had been made into important matters simply to justify the decision. Miss LipscombeMitchell disagreed and said she had them in mind when she wrote the letter which was just a summary. - She denied that she had been excessively influenced by policy and generalisations.[21]Miss Wilson gave evidence which perhaps can be summarised in this way. She works as a Senior Manager earning around £140,000 per year but is not part of the Senior Management structure. She has line management responsibilities for 14 staff being the direct line manager of 4 and indirect for 10. The staff member who had joined in Edinburgh was one of her 10 indirect reports. She had started working from home shortly before the pandemic. She was aware of a trial period as the pandemic ended when staff were expected to return to working from the office before the policy was developed which mandated 40% office attendance. She was aware that other members of staff did work from home but she agreed that she thought that there were OH reasons in their cases and non had line management responsibilities.[22]Miss Wilson said she made the flexible working application and had addressed the 8 reasons upon which it might have been refused in the application as she felt she was working effectively remotely. She agreed that the application did not set out a reason for her to permanently work from home. She did not recall any discussion with Miss Lipscombe-Mitchell about attending the office less than 40% of the time. At the meeting on 28th February she had been stressed and tearful and was not prepared to discuss her application as she thought the meeting was to tell her the result of the application. She said she would be prepared to attend the office if it was absolutely necessary but accepted that she may not have told Miss Lipscombe-Mitchell that. Miss Wilson denied that face to face working was better than remote alternatives. She stated that the FCA had excellent technology and that many of the suggested disadvantages were not real. Miss Wilson highlighted the lack of physical meeting space and that she could not recall a single management meeting where there had not been an option to attend virtually. She described, in contrast to the suggestion that physical attendance could lead to impromptu discussions about staff wellbeing etc, how difficult it could be to engage privately in an office environment and how finding a private meeting space might be particularly difficult in contrast to the ease with which private meetings could be arranged on-line. She indicated that she had been made aware that a meeting room could not be booked for a ‘cascade’ meeting and so she had worked to deliver the meetings remotely and had made them interactive and fun. The same was true of Authorisation Leadership sessions where in her experience there were always at least 10-20% of people joining remotely and there was not space for all to physically attend. As far as the suggested ‘workshop’ events she disputed that she was really required for them or that they could not be run successfully with her input being delivered online.[23]Mr Cashman gave evidence. He accepted the proposition that he did not conduct the appeal looking at the matter afresh but reviewed the material to see if Miss LipscombeMitchell had made a sensible decision. He said he had looked at Miss Lipcombe-Mitchell’s decisions in relation to quality and performance and was not simply saying in his decision that the policy of working 60% of the time away from the office was ‘generous enough’. Submissions[24]Mr Blitz invites the Tribunal to interrogate the veracity of the claimed facts. He draws a parallel between this case and the decision in Commotion v Rutty [2006] IRLR 171 (EAT) where a request for flexible working was rejected by the employers on the basis that: “we have plans to change the structure of working hours in the warehouse. We feel it is very important for staff working there to start work at the same time and finish at the same time. There is nothing we can do about existing staff if they are employed on a parttime basis. You are employed as a full-time member of staff, and if you choose to remain as a full-time employee, we would be pleased to carry on as before" And when the application was considered on appeal and refused the appeal letter cited: “You will understand that we are trying to change the structure of working hours within the warehouse to help create a team spirit by having a uniform working day. In addition, you must appreciate that shortening your working hours will have a negative impact on the overall warehouse performance and put a strain on our resources".[25]The Employment Tribunal found that the Respondents in that case had considered the position based upon incorrect facts. It found at paragraph 11 of its judgment: “So far as breach of the Flexible Working Regulations are concerned, the Tribunal are not satisfied that the Respondents complied with requirements under section 80G of the 1996 Act. Whilst they have put forward what the Tribunal would suggest are really outdated responses to requests for part-time working, they are off the cuff and made without research. The Tribunal's experience is, and no evidence has been brought before us in this case to show that working as a part-time warehouse assistant is not feasible, that with thought the workforce and the work required to be done can be organised so that there is no diminution in the service to customers, that the whole workforce can be organised to cope with that work with some people who have other commitments working on a parttime basis and others full-time. There has not been a shred of evidence that proper enquiry and proper investigation was carried out by the Respondents when dealing with this request. It must follow that our findings in this respect also go on to the question of justification in the indirect discrimination claim". The Employment Appeal Tribunal at paragraph 38 of its judgment upholding the Tribunal’s decision said at paragraph 38: “In order for the Tribunal to establish whether or not the decision by the employer to reject the application was based on incorrect facts, the Tribunal must examine the evidence as to the circumstances surrounding the situation to which the application gave rise. In doing so, the Tribunal are entitled to enquire into what would have been the effect of granting the application. Could it have been coped with without disruption? What did other staff feel about it? Could they make up the time? and matters of that type. We do not propose to go exhaustively through the matters at which a Tribunal might wish to look, but if the Tribunal were to look at such matters in order to test whether the assertion made by the employer was factually correct, that would not be any misuse of their powers and they would not be committing an error of law.”[26]With that in mind Mr Blitz invites my attention to the following key factors, namely; that the FCA is working towards location agnostic recruitment, there is no empirical evidence put forward that face to face working is better than remote working, Miss Wilson has an exceptional track record through the period where she has been working entirely remotely and that accordingly the incorrect facts are that there would be a detrimental impact of the Claimant’s quality of work and performance if the application were granted.[27]Miss Thomas in contrast submits that the Claimant is a Senior Manager with responsibility for 14 staff, no reason has been given for the necessity for her to work entirely remotely and whilst her performance whilst working from home has been good it has all been through the period of the COVID pandemic and its aftermath and it has never been through a period when it was ‘business as usual’. The Respondents have advanced clear reasons for the refusal of the request which are not based on incorrect facts. Discussion and Conclusions[28]As is clear that the issue for this tribunal is whether Miss Lispcombe-Mitchell based her decision, that if Miss Wilson was to work entirely from home there would be a detriment to the quality and performance of her work, upon incorrect facts.[29]This is a case which raises a key issue in the modern workplace and which will no doubt be the subject of continued litigation. The availability of good quality technology to link people together has had a wide ranging impact on the traditional structures of business operation. The need for staff to provide a physical presence at an office location is a debate which many companies are now engaged in and which the solutions arrived at will no doubt differ considerably from employer to employer, there will not be one solution which will work for all companies or even for all roles within a company. There is at the heart of many of these considerations a ‘qualitive debate’ as to whether face to face or virtual contact is better. Ultimately it maybe the case that each situation requires its own consideration.[30]Importantly in my judgment at the moment there is no right to require an employer to permit that an employee works exclusively remotely but, as is engaged in this case, there is a right that an employer considers such a request in accordance with the statutory scheme.[31]In this case I found Miss Lipscombe-Mitchell to be an impressive witness. She gave clear and cogent evidence about her approach to the application and her decision making process. She readily conceded her failure to progress the application initially, as addressed at the first issue above and gave thoughtful and considered evidence throughout. It is clear in my judgment that she had the excellent performance of the Claimant well in mind when she determined the application. It is clear in my judgment that she acknowledged that much of the work of the Claimant could be achieved remotely. I find as a fact that Miss Lipscombe-Mitchell did seek to genuinely consider the individual merits of the application as opposed to simply seeking to enforce the Respondent’s attendance policy.[32]I am also of the view that the Claimant’s position as a Senior Manager at the Respondents provides an important context when considering the application and the suggestion that it has been decided upon incorrect facts. It is clear that although not part of the overall Senior Leadership Team the Claimant does have managerial responsibilities and an overall senior position within the organisation leading the department with Miss LipscombeMitchell. Such a position does in my judgment feed into test of the performance and quality to be expected from the postholders work.[33]To establish her conclusion that there would be a detriment quality and performance Miss Lipscombe-Mitchell has highlighted in evidence the following facts where in her assessment there would be a detriment were they to be performed entirely on-line: i) Meeting and welcoming new staff members ii) Internal training, supervision and department needs where a line manager has a visible presence in the office to provide structured or informal/ad hoc advice and support to team members iii) Attendance at in-person events and conferences and planning meetings run within physical office accommodation; iv) Attendance at weekly ‘Cascade’ meetings where information is imparted by Senior Managers and individual and team successes are acknowledged and celebrated v) Authorisation Leadership sessions where managers, Heads of Departments and Directors meet to discuss key topics vi) ‘Department Day’ – management team would present topics to the department and spend the day together. Miss Lipscombe-Mitchell would want to run the session in a ‘market stall’ layout so staff, especially new staff could move around and physically meet the managers.[34]I have considered what the effect would be of granting the application and brought my judgment to interrogate the underlying facts which are asserted. Whilst I agree that many of these elements could and no doubt are completed successfully through the use of remote working I am satisfied that Miss Lipscombe-Mitchell is right to identify weaknesses with remote working. It is the experience of many who work using technology that it is not well suited to the fast paced interplay of exchanges which occur in, for example, planning meetings or training events when rapid discussion can occur on topics. Similarly there is, as has been identified, a limitation to the ability to observe and respond to non-verbal communication which may arise outside of the context of formal events but which nonetheless forms an important part of working with other individuals. This is particularly so when considering the senior position held by the Claimant.[35]In my judgment it is not incorrect for Miss Lispcombe-Mitchell to identify the factors above as leading to a detriment to the quality and performance of Miss Wilson’s work notwithstanding her excellent reviews and references thus far.[36]Further in particular I note items ii), iii) and iv) as being factors where when the situation is considered vis a vis the application being granted or refused a detriment to performance and quality is clearly established. These factors envisage a physical presence by Miss Wilson within an office and so it is trite to observe they simply can not be achieved in the same way through remote working. I am satisfied on the evidence that these are elements of the work of the Claimant which the Respondent legitimately expect her to complete. An inability to complete these elements clearly does detrimentally impact upon the performance and quality of Miss Wilson’s work as it is expected by the Respondents. Again I readily acknowledge Miss Wilson’s excellent references and performance reviews and it is clear that she is performing well in her work, but ultimately she is not working in the way envisaged by the Respondent. As such these factors do seem to me to highlight areas where the Claimant’s work would not to the quality or performance that her employers would wish if the application was granted.[37]Miss Lipscombe-Mitchell’s careful analysis of these factors clearly takes this case away from the situation in Commotion where no critical thought had gone into the asserted reasons for refusal. There a blanket restriction on flexible working was clearly not justified and the merits of the application had not been considered in the individual case. In contrast in this case I find that it is apparent that detailed consideration has been given to the request and real issues have been identified by Miss Lipscombe-Mitchell who has applied a qualitative assessment to them which was her decision to make. I am therefore satisfied and find therefore as a fact that her decision is not based upon incorrect facts. The Third Issue[38]If the Claimant succeeds in any part of her complaint should the Tribunala. Make an order for reconsideration of the application; and/orb. Make an award of compensation.[39]As conceded by Mr Blitz an order for reconsideration is not sought by the Claimant if she was successful upon the first issue alone and as such no order for reconsideration is made.[40]As set out above a payment of one weeks’ pay (agreed at £643) is due in compensation for the breach of the notification time limit is awarded.