Thompson v Scancrown Ltd: £185,000 Award for Refusing Flexible Working Request

Key Points

The Facts of the Case

Alice Thompson was employed as a sales manager by Scancrown Ltd, trading as Manors, a small independent estate agency based in Marylebone, London. The company had around 10 employees and specialised in the prime central London property market, catering to wealthy overseas clients.

Mrs Thompson started work in October 2016 and was considered a highly competent employee. Her employer, Paul Sellar, had praised her contribution, telling her “thanks to you, the office is doing well.” Her contractual hours were 9am to 6pm, Monday to Friday, with an annual salary (including commission) of approximately £120,000.

The pregnancy and maternity leave

In the spring of 2018, Mrs Thompson announced her pregnancy. The tribunal heard evidence that her relationship with her employer began to deteriorate around this time. Mr Sellar allegedly remarked to a colleague’s partner: “Why is she pregnant when we are doing so well? I was warned about employing a married woman of her age.” Mr Sellar denied making this comment.

Mrs Thompson took maternity leave from October 2018 to October 2019. Before returning to work, she met with Mr Sellar and made a flexible working request asking to work four days a week instead of five, and to finish at 5pm instead of 6pm so she could collect her daughter from nursery.

The flexible working refusal

Mr Sellar refused both requests. He cited five statutory business reasons for the refusal: the burden of additional costs, detrimental effect on ability to meet customer demand, inability to reorganise work among existing staff, inability to recruit additional staff, and planned structural changes. He also said that clients “expect consistency in the sales manager they deal with.”

Mrs Thompson appealed but was unsuccessful. In December 2019, she resigned, unable to balance her working hours with the need to collect her daughter from nursery by 6pm.

The Claims Brought

Mrs Thompson filed multiple claims against her former employer: pregnancy and maternity discrimination, harassment related to sex, indirect sex discrimination in respect of the flexible working request, unfair dismissal, and unlawful deduction of commission payments from wages.

The only claim that succeeded was the indirect sex discrimination claim relating to the flexible working request.

Why the other claims failed

The harassment claim failed because, while the tribunal found some conduct was “less than friendly,” it did not reach the threshold of harassment. The pregnancy discrimination claim was not upheld on the facts. The unfair dismissal claim failed because the tribunal found Mrs Thompson had resigned rather than being constructively dismissed. As the tribunal put it, “the reason for resignation was not any breach of the implied term to act with mutual trust and confidence, but that she did not want or was not able to work the contracted hours.”

The Legal Test for Indirect Discrimination

Indirect discrimination under section 19 of the Equality Act 2010 requires four elements to be established.

First, the employer must apply a provision, criterion or practice (PCP) to all employees. In this case, the PCP was the requirement for sales managers to work 9am to 6pm, Monday to Friday.

Second, the PCP must put people sharing a protected characteristic at a particular disadvantage compared to those who do not share it. The tribunal accepted that women still shoulder a greater proportion of childcare responsibilities than men. A 2018 national survey had shown that 64% of mothers, compared to 36% of fathers, are the primary childcarers. The requirement to work until 6pm, when nurseries typically close, therefore put women at a particular disadvantage.

Third, the PCP must put the individual claimant at that disadvantage. Mrs Thompson clearly suffered this disadvantage because she could not collect her daughter from nursery if she worked until 6pm.

Fourth, the employer must be unable to show that the PCP is a proportionate means of achieving a legitimate aim. This is where the case was decided.

The justification defence

The employer’s stated aim was maintaining successful relations with customers. While this was accepted as a legitimate aim, the tribunal found that refusing flexible working was not a proportionate means of achieving it.

The tribunal found that the team could effectively operate when covering the periods Mrs Thompson was not working. It noted that Mrs Thompson had accepted her pay and commission would be reduced pro rata, making the arrangement cost-neutral. Even a small company like Manors was considered capable of accommodating the request.

“This case demonstrates that even small employers cannot simply cite business reasons and expect that to be enough. The tribunal will look at whether you genuinely tried to make it work. Here, a one-hour adjustment could have saved the employer nearly £200,000.”

Tom Street Principal Solicitor, Tom Street & Co.

The Compensation Awarded

The total award was £184,961.32. This substantial figure reflected Mrs Thompson’s high earnings and the significant financial impact of losing her job.

Breakdown of the award

The award comprised several elements. Past loss of earnings covered the period from her resignation in December 2019 until the remedy hearing in August 2021. This was calculated on the basis of what she would have earned had she returned on the flexible working pattern she had requested, meaning a 29% reduction from her full-time salary.

The tribunal made allowances for the COVID-19 pandemic, including periods when she would have been furloughed or on reduced hours. Future loss of earnings was awarded for a further period until October 2021, when the tribunal expected Mrs Thompson would find comparable employment as the job market recovered.

Loss of pension contributions was calculated at 3% of salary. Loss of use of a company car was valued at the cost of a Zone 1-3 annual travelcard (£1,480).

Injury to feelings

The tribunal awarded £13,500 for injury to feelings, within the middle Vento band. The tribunal noted that Mrs Thompson felt devastated at having built up the team and formed relationships with clients, only to lose it because she was pregnant. She was bringing the claim so that her daughter would not have the same experience.

The middle band was appropriate because the injury was more than trivial or one-off, but had subsided after a difficult period. Mrs Thompson had not needed medical help for her distress.

Interest and grossing up

Interest was awarded at 8% per annum on both injury to feelings (from the date of injury) and loss of earnings (from the midpoint of loss).

The total award was then grossed up for income tax. Because Mrs Thompson would receive the award as a lump sum and pay tax on it, the tribunal applied the grossing up methodology approved in PA Finlay Ltd v Finlay to ensure she received the net amount intended after paying tax.

What This Case Means for You

For employees

If your employer refuses a flexible working request linked to childcare responsibilities, this could amount to indirect sex discrimination. You do not need to prove your employer intended to discriminate. The key questions are whether the refusal puts women at a disadvantage (which childcare-related refusals typically will) and whether the employer can justify the refusal as proportionate.

The fact that an employer cites one of the eight statutory business reasons under section 80G of the Employment Rights Act 1996 does not automatically make the refusal lawful. The employer must still be able to prove proportionality.

Compensation for indirect discrimination is uncapped and can include past and future loss of earnings, pension losses, and injury to feelings. For high earners, awards can be substantial.

For employers

This case is a stark warning about the risks of refusing flexible working requests without proper consideration. Five key lessons emerge.

First, treat flexible working requests as a discussion, not a decision to be announced. If you cannot offer what the employee is asking for, consider what you can offer as a compromise or effective alternative.

Second, consider offering a trial period to see whether the requested flexibility will work in practice. This demonstrates genuine consideration.

Third, remember pro rata reductions to pay and holiday entitlement when calculating costs. The tribunal noted that Mrs Thompson’s request would have been largely cost-neutral.

Fourth, if you are going to refuse, provide detailed reasons in plain English. Simply saying “costs will be high” or “customer demand” without specifics is unlikely to satisfy a tribunal.

Fifth, even small employers must properly consider flexible working. The tribunal specifically noted that a company with only 10 employees was capable of accommodating the request.

“When assessing justification, tribunals will look at whether you genuinely explored alternatives. The employer here could have covered one hour at the end of each day with existing staff, or recruited a junior assistant. Instead, they simply said no. That rigidity cost them nearly £200,000.”

Tom Street Principal Solicitor, Tom Street & Co.

Changes Since This Case

Since the Thompson decision, flexible working rights have been strengthened. The Employment Relations (Flexible Working) Act 2023 came into force in April 2024, giving employees the right to make flexible working requests from day one of employment (previously you needed 26 weeks’ service).

Employees can now make two requests in any 12-month period, and employers must respond within two months (reduced from three). Employers must also consult with the employee before refusing a request.

These changes make it even more important for employers to handle flexible working requests carefully. The substantive legal test for indirect discrimination remains unchanged.

Case Citation

Thompson v Scancrown Ltd (trading as Manors) ET/2205199/2019

London Central Employment Tribunal
Employment Judge Goodman, Ms J. Griffiths, Mr D. Shaw
Liability judgment: May 2021
Remedy judgment: 24 August 2021

Full judgment: Download PDF (GOV.UK)