When an employee comes back from parental leave and requests varied work arrangements, employers must seriously and genuinely consider the request and any potential consequences of granting it.
Employers must be aware of terms in their enterprise agreements that provide employees with a right to request to return to work from a period of parental leave on a part-time basis because such terms may be construed as providing employees with a presumed right to return to part-time work.
This scenario was recently considered by the Fair Work Commission, which held that an employer constructively dismissed an employee when it refused the employee's request to return to part-time work following a period of unpaid parental leave.
Presumptive right to return to work?
Under the Fair Work Act, employees with children under school age, or under 18 with a disability, have the right to request flexible working arrangements, which may include working part-time. Employers can only refuse such a request on reasonable business grounds.
The decision of Commissioner Lewin in Hanina Rind v AIST  FWC 3144 indicates that, where an enterprise agreement provides a right to request to return to work on a part-time basis, it will be presumed that employees are entitled to return to work part-time unless there are reasonable grounds upon which part-time employment can be refused.
The onus appears to be on the employer to prove the reasonableness of the refusal on an objective basis, notwithstanding that this issue could generally not be dealt with under traditional dispute resolution.
Facts of Hanina Rind v AIST
Hanina Rind was employed by the Australian Institute of Superannuation Trustees (AIST) on a full-time basis as a Database/IT Systems Administrator and, after a period of unpaid parental leave following the birth of her second child, she sought to return to work on a part-time basis.
The relevant enterprise agreement provided Ms Rind with a right to request a return from parental leave on a part-time basis until her child reached school age. Ms Rind asked if she could return to work on a gradually escalating schedule that would ultimately result in her working three days a week.
The AIST refused her request on the basis that the role of Database/IT Systems Administrator is a full-time role and that reducing it to a part-time role would not work for the business. Ms Rind subsequently resigned and filed an application with the Fair Work Commission, claiming that she was constructively dismissed.
What was decided?
Commissioner Lewin held the employment relationship ended as a consequence of the AIST refusing Ms Rind's request to work part-time and Ms Rind deciding that the employment was no longer viable.
The AIST argued that it wanted Ms Rind to return to full-time employment because, in her absence, her role had been contracted to an external service provided for 12 hours per week and this had not proved entirely satisfactory. Despite this, the AIST continued this arrangement after Ms Rind had left and made no attempt to recruit a full-time Database/IT Systems administrator as a replacement.
Commissioner Lewin noted that Ms Rind's request to work part-time for three days per week would most likely have provided a greater number of hours of work than the outsourced contractor provided and held that, viewed objectively, the AIST's refusal to grant Ms Rind's request to work three days per week was not reasonable and consequently amounted to constructive dismissal.
What constitutes constructive dismissal?
In terms of legal principles, Commissioner Lewin explained that the circumstances giving rise to a constructive dismissal are that "an employee is entitled to leave their employment in circumstances where conduct of their employer is sufficiently inimical to the continuation of the contract of employment and the employment relationship", noting that "inimical conduct will be conduct which is adverse, unfriendly or hostile to the contract of employment and the employment relationship."
In determining whether an employee has been constructively dismissed, Commissioner Lewin explained that:
"The task of a court or tribunal will be to objectively assess an employer's conduct as a whole and determine whether, judged reasonably and sensibly, relevant conduct of an employer was so harmful, adverse or unfriendly to the contract of employment and the employment relationship that the employee could not be expected to put up with it."
Commissioner Lewin ultimately held that, in the circumstances, the employer's decision to refuse Ms Rind's request was so unreasonable as to constitute constructive dismissal, noting that:
"When judging the weight of the inimical conduct of unreasonably refusing Ms Rind's request to return to work part time in the particular circumstances of this case the gravitas or seriousness of that conduct should be viewed from the contemporary vantage point, which affords considerable importance to the ability of women to give birth to children without foreclosing their employment due to consequences of family formation."
Growing recognition of parental rights and related consequences
This decision highlights the growing influence of parental rights in the workplace on the interpretation of applicable workplace instruments.
Indeed, in reaching his decision, Commissioner Lewin construed the relevant clause in the enterprise agreement such that employees returning from parental leave are presumed to be entitled to return to work part-time:
"There is a presumptive element to the provisions of ...the Agreement such that an employee returning from unpaid parental leave will be able to work part time until the child in respect of which the leave is available reaches school age, unless there are reasonable grounds upon which that part time employment can be refused." [emphasis added]
When interpreting the Agreement in this way, Commissioner Lewin made a number of important comments regarding an employee's right to return to part-time work following a period of parental leave:
"Ms Rind's parental circumstances fundamentally affected her capacity to work for AIST. The practical necessity of her right not to have her request to work part time until her second child reached school age unreasonably refused was essential for her continued employment to be viable."
"While the opportunity for part-time work on return from parental leave might not long ago have been considered a fortunate privilege, in my judgement, contemporary circumstances require a different view".
What should employers do?
As a starting point, employers should give genuine consideration to any request for flexible working arrangements made under the Fair Work Act or any applicable enterprise agreement and only refuse such a request on reasonable business grounds. This is not only prudent compliance with legal obligations but is good employment practice which will assist in attracting and retaining employees.
Accordingly, when faced with an employee requesting varied work arrangements, following a period of parental leave, employers must ensure that they seriously and genuinely consider the employee's request and any potential consequences of granting the request on the business.
If an employer plans to reject such requests, it should only do so when there are very good grounds, taking into consideration the increasing importance placed by the Commission (and the community generally) on parental rights.
Finally, any decision to refuse such a request should be fully and properly documented with detailed reasons to assist in defending a claim such as in the Rind case.
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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this bulletin. Persons listed may not be admitted in all states and territories.