Assume you may be running an SME sized business given they have asked that question.

I agree with above in that it does depend how it was asked.

An alternative view, especially if you are an SME size, someone with that knowledge may be someone who is intelligent and thoughtful and someone the business may want to retain as they are thinking outside the box when doing their job too you would like to think. Therefore you may want to offer some level of flexibility although the request is unusual. You know the person involved best and how they may react to a negative response, how good they are at their job, how crucial to the business they are, etc so that will also go a long way to answering the question. Not that anyone should be treated differently of course.

Having said all that, if I had been asked this at work, I would probably consider all of the above and then say no regardless!