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A major City bank is facing a landmark legal challenge from workers after it announced a ban on flexible arrangements that allow staff to work from home.

US financial giant BNY Mellon has been warned it will suffer an “exodus” of working parents when the existing practices come to an end in June.

The bank, best known for its sponsorship of the Boat Race, currently offers staff the opportunity to be based at home several days each week, as well as working variable hours.

However, all London employees have now been told they will be expected to be at their desks in Blackfriars and Canary Wharf full time following a “review” ordered by the bank’s cost-cutting chief executive Charles Scharf.

City staff have consulted conciliation service Acas over the move, and several are now considering legal action over a breach of contract, the Standard can reveal. They claim that staff have had the flexible working arrangements added to their contracts when they became policy in 2017.

One BNYM employee slammed the move as a “massive step backwards for diversity and inclusion which hits our most vulnerable demographics including carers, working parents and those with mental health issues”.

One mother said she would “effectively be forced to resign and seek work with a more flexible company when the policy comes into force”.

One administrator warned she was “genuinely concerned about [her] children’s safety” because “I’ve got an arrangement in place for four out of five days, but [now] I’m going to have to let my young children come home alone and fend for themselves”.

The bank, which employs an estimated 3,000 people in the UK, told staff with a disability that they will still be able to apply to work from home. But one senior manager, who has worked at the bank for 15 years, said: “I manage a global team and have suffered from depression and anxiety most of my adult life. The flexibility meant I could manage my illness around my job. This new policy will mean I have to declare my illness to the company, which I have never wanted to do. I don’t want to stand out.”

BNYM’s internal forum has more than 760 comments and thousands of views on a post about the move.

BNYM told staff the move was to promote interaction, but one hit back: “I can’t see [that] justification when we are a global organisation, often not working alongside our colleagues.” The bank’s change in policy comes at a time when other employers have moved to increase flexible working.

One City worker revealed she had accepted a job at BNYM two months ago, having agreed she could be based at home two days a week, but has since been told the offer has been revoked.

BNYM said: “We have been conducting a comprehensive review of how we work together to increase collaboration, enable faster decision-making and better serve our clients. As part of that process, we are reviewing all remote working arrangements in order to maximise the benefits of people working closely together while maintaining some degree of flexibility.”