Since 6 April 2024, every employee in the UK has had the right to request flexible working from their first day in the job, rather than after 26 weeks of service, as was previously the case. It is easy for SME owners and line managers to hear that and assume the law now obliges them to say yes. It does not. What it requires is that you consider every request reasonably, fairly, and on its merits, consulting with the employee before refusing it and reaching a decision within the statutory timeframe.
Sometimes, having gone through that process properly, declining is genuinely the right call for the business. This guide walks through the legal framework, the eight statutory grounds for refusal, and, most importantly, how to reach and communicate that decision in a way that protects both your business and your relationship with the employee.
The Legal Framework
The Employment Relations (Flexible Working) Act 2023 reshaped how these requests need to be handled. Employers must now consult with an employee before refusing a request; employees can make two requests in any 12 months rather than one; and employers must respond within two months unless an extension is agreed upon. Employees are also no longer required to explain what effect their requested working pattern might have on the business or suggest how any impact could be managed. Instead, employers are expected to assess the request and discuss any practical concerns during consultation. The right to request remains a day-one right, but the obligation it places on employers to engage properly rather than simply issue a decision is where many SMEs come unstuck.
A poorly handled refusal carries real risk. Beyond the possibility of Employment Tribunal claims, arising from procedural failures, discrimination, or other employment law issues, an SME’s employee engagement and communication can take a lasting hit. Word travels fast in a small business, and a decision that feels arbitrary or dismissive to one employee will be noticed by everyone else.
Start From a Positive Mindset
Before any discussion of valid grounds for refusal, it is worth pausing on this: the legislation and ACAS guidance expect employers to give genuine consideration to whether a request can be accommodated, rather than searching for a reason to refuse it. That starts with curiosity rather than caution. What is the employee actually trying to achieve? Is there a version of their request, even one that differs from what they originally asked for, that meets their need and works for the business?
This is also the point at which assumptions cause the most damage. It is tempting to predict that a customer-facing role cannot flex, or that a small team cannot absorb a compressed week, without ever testing that assumption against real evidence. Refusals built on what a manager assumes will happen, rather than what has been properly assessed, are exactly the kind of decisions that unravel under scrutiny, whether that scrutiny comes from an employee, a tribunal, or simply a team that has lost trust in how decisions get made.
Discrimination risk deserves particular care here. Requests connected to childcare responsibilities, disability, pregnancy, or other protected characteristics need to be considered with extra rigour, because a refusal that disadvantages a particular group, even unintentionally, can amount to indirect discrimination. We come back to this below, because it is one of the most consequential risks in this entire area.
The 8 Statutory Grounds for Refusal
If, after genuinely exploring the request, a business reason for declining remains, it must fall within one of eight statutory grounds. Under the statutory flexible working regime, these are the only permissible business grounds for refusing a request:
- The burden of additional costs to the business.
- A detrimental effect on the ability to meet customer demand.
- An inability to reorganise work among existing staff.
- An inability to recruit additional staff.
- A detrimental impact on quality.
- A detrimental impact on performance.
- Insufficiency of work during the periods the employee proposes to work.
- Planned structural changes to the business.
Employers should be able to demonstrate why the statutory ground applies to the particular request, based on evidence rather than assumptions. . Tribunals and employees alike are entitled to ask why that ground applies in this specific case, and a generic answer rarely survives that question. Citing “cost” without a figure or “customer demand” without data on contact patterns or service levels leaves a decision exposed. Before relying on any of these grounds, it is worth identifying the specific business concern behind it and actively exploring whether that concern can be mitigated through a trial period, a revised schedule, or some other adjustment rather than treating the ground as an automatic justification.
How To Communicate a Refusal Well
Cite the specific ground, and explain why. Tell the employee exactly which statutory ground applies and walk them through the reasoning, with evidence, not just the label. A decision that can be explained in plain terms is far more likely to be accepted and far more defensible if challenged.
Consult before you conclude. The 2023 reforms make this a legal requirement, not just good practice. Speak with the employee and with relevant stakeholders, such as their line manager, before the decision is finalised, not after. Consultation that happens once the outcome is already settled is not real consultation, and tribunals can tell the difference.
Offer a counter-proposal wherever you can. If the exact request cannot be accommodated, consider what could be. A different start time, a trial period to test the impact, or a partial change all demonstrate good faith and often resolve the underlying need without the business absorbing the full cost of the original ask.
Throughout the process, keep records. Note what was discussed, what evidence was considered, and why the final decision was reached. This is not bureaucracy for its own sake; it is the difference between being able to demonstrate a fair, consistent process and being left to reconstruct one after the fact, often under the pressure of a grievance or tribunal claim.
A Cautionary Tale: Thompson v Scancrown Ltd
The risks here are not theoretical. In Thompson v Scancrown Ltd (trading as Manors), a sales manager at a small London estate agency returned from maternity leave and asked to finish an hour earlier, at 5pm instead of 6pm, to collect her child from nursery. Her employer refused, citing several business reasons, and she resigned and brought a claim.
The Employment Tribunal found that the employer’s requirement for sales managers to work until 6pm amounted to indirect sex discrimination because it disproportionately disadvantaged women with childcare responsibilities and could not be objectively justified. The employer’s stated business reasons were not enough on their own; the tribunal expected to see that those reasons had been weighed proportionately against the discriminatory impact on the employee. They had not been. The final award, covering loss of earnings, pension loss, and injury to feelings, came to just under £185,000.
The lesson for SMEs is not that flexible working requests connected to childcare must always be granted. It is that a statutory ground for refusal is a starting point for justification, not a substitute for it. Decisions need to be evidenced, objectively justified, and proportionate to the business concern they address.
Setting Expectations Proactively
Much of the tension around flexible working requests can be avoided long before a formal request ever lands on a manager’s desk.
Have a clear, written policy. Employees should be able to see, before they apply, how requests are assessed and what the business generally needs to say yes. This alone heads off a lot of requests that would otherwise be refused, because employees can self-select toward what is realistic.
Talk about working arrangements early. Recruitment and onboarding are natural moments to discuss flexibility openly, rather than leaving it as an unspoken assumption on either side that surfaces awkwardly months later.
Normalise informal conversations. Not every flexibility need has to become a formal statutory request. Managers who are comfortable discussing flexibility casually, in regular one-to-ones, often resolve issues before they ever reach the point of a formal application.
Building this kind of clarity into your processes is exactly the sort of work an HR consultancy can support, alongside related areas like performance management, which is often where the real impact of a flexible arrangement, positive or negative, becomes visible, and HR training and workshops for line managers who are often the first point of contact for these conversations.
It is also worth connecting this to wider workforce data. Patterns in absence management, and a clear understanding of the relationship between stress and sickness absence, can often reveal where a lack of flexibility is quietly costing the business more than accommodating it would.
The Cost of Getting It Wrong
Inconsistent decision-making is one of the fastest ways to damage trust in a small business. If one employee’s request is granted and a similar request from another is refused without a clear, documented distinction between the two cases, the business is exposed on several fronts at once: strained employee relations, the loss of good people who feel unfairly treated, the risk of discrimination claims, and, in the most serious cases, constructive dismissal claims the employer’s handling of the request forms part of a fundamental breach of the employment contract that leads the employee to resign. As Thompson v Scancrown shows, the financial exposure from getting this wrong can be substantial, even for a very small employer.
Fairness, Consistency, and Good Communication
Declining a flexible working request is sometimes the right business decision, and the law has never demanded that every request be granted. What it demands, and what good employment practice demands regardless, is that the decision is reached fairly, grounded in evidence rather than assumption, consistent with how similar requests have been handled before, and communicated clearly enough that the employee understands exactly why. Get that process right, and a refusal, even a disappointing one, rarely becomes a legal or relational problem. Get it wrong, and even a reasonable decision can end up costing far more than the flexibility itself ever would have.
If you want to put a clear flexible working policy in place, Gravitate HR can help. Reach out today.
