Australia: The new normal: Flexibility in the workplace

What is flexibility?

The right to request changes to working arrangements is one of the 10 National Employment Standards (NES). More broadly, the right for certain employees to request flexible working arrangements has been a feature of the Fair Work Act 2009 (Cth) (Act) since 2010, although there have been changes since this right was introduced.

Section 65 of the Act sets out the entitlement to request flexible work arrangements. That provision was expanded in 2013 to include employees who are carers; parents of children who are school age or younger; have a disability; are aged 55 years or older; who are experiencing violence from a family member; and who provide care and support to family members or household members who are experiencing family violence.

Generally, the entitlement to request a flexible working arrangement is subject to the employee having completed at least 12 months continuous service. However, for casual employees, to have this entitlement they must be a long-term casual employee and have a reasonable expectation of continuing employment on a regular and systematic basis.

Employers have a right to refuse flexible work requests on reasonable business grounds. Reasonable business grounds for refusing a request can include:

  • that the new working arrangement would be too costly for the employer;
  • that there is no capacity to change the working arrangements of other employees to accommodate the request;
  • that it would be impractical to change the working arrangements of other employees or recruit new employees to accommodate the request;
  • that the requested arrangements will be likely to result in significant loss of efficiency or productivity; or
  • that the requested arrangements would likely have a significant negative impact on customer service.

Regardless of acceptance or refusal of the request, employers must respond to an employee within 21 days of receiving the request.

Crucially, the NES process does not provide an avenue for an employee to challenge a refusal. Similarly, an employee cannot bring a claim to the Federal Circuit Court or Federal Court alleging a breach of the NES for refusing the request.

Recent developments

The Full Bench of the Fair Work Commission recently handed down a decision as part of the four yearly review of modern awards in consideration of 'family friendly work arrangements'. This decision will potentially expand an employee's rights to request flexible working arrangements. The Full Bench's decision in Family Friendly Working Arrangements [2018] FWCFB 5753 proposes to insert a model term (reproduced in full at the end of this note) into all modern awards that will supplement the provisions of the NES in section 65 of the Act, and place additional obligations on employers about consulting and responding to requests.

The Full Bench's decision is in response to an earlier claim by the Australian Council of Trade Unions (ACTU) to insert into all modern awards a right for parents and carers to access part-time work or reduced hours upon giving reasonable notice, and to revert to their previous working arrangements when their child reaches school age (and for carers to do the same after two years on their previous hours).

The Full Bench rejected the ACTU's earlier proposal in March 2018, noting that the scope of the proposal would allow employees to unilaterally change their hours of work, removing the ability of businesses to determine how to roster their labour.

The Full Bench's most recent decision proposes to insert a model term which closely resembles the requirements of section 65 of the Act, but differs in the following material ways:

  • an employer must consult with the employee and genuinely try to reach agreement about the requested change to working arrangements, taking into account the employee's circumstances;
  • if an employer refuses the request, the written response must now include:
    • details of the business grounds for refusal and how they apply;
    • details of alternate working arrangements that the employer could provide to accommodate the employee's circumstances; and
  • employees will be able to dispute whether employers have correctly consulted or responded to their request.

Importantly, the model term does not include an ability for employees to dispute the reasonable business grounds for refusal. That being said, the ability to dispute the adequacy of the employer's consultation and response is still likely to result in disputes that are not otherwise available under the NES.

What will it mean?

The model term will impose extra obligations on employers in managing flexible work requests. However, many employers are likely to already follow a process that mirrors the new obligations in the model term when responding to requests under the current requirements.

The model term also does not preclude the possibility of general protections claims, or claims under discrimination legislation, if requests are refused.

It remains to be seen whether the model term will be inserted into all modern awards, as this is subject to consultation with relevant union and employer representative parties.

The model clause also does not deal with the conundrum of multiple competing requests. While an employer might not have reasonable business grounds to refuse the first request for a flexible work arrangement, subsequent requests may need to be refused if they cannot be accommodated because of existing requests. Commissioner Wilson recently considered this issue and said:

'Crudely put, it may well be that an employer has no reasonable business grounds to refuse the first flexible working arrangement request which might be made. It may not even have reasonable business grounds to refuse the 30th, even on the basis of what may be worked by other employees. However what of the 200th request? Very plainly at some point the preponderance of approvals going before the one presently before an employer may well lead to the conclusion that there is a reasonable business ground available for the refusal of the request simply because too many other staff have arrangements in place with varying degrees of flexibility which means that the full span of unit work demands are not able to be filled by the available working hours of the available staff.'

It would be a perverse situation where employees who get in first with their requests for flexible work arrangement are better placed than those who make their requests at a later date.
Given that the Commission's clear intention is to ensure that flexibility in the workplace is available to all employees, employers will need to approach requests for flexible working arrangement with an open mind and with a view to trying to accommodate the request, or discussing a way to vary the request to enable a mutually beneficial outcome.

It is also be important to note that the model term is not relevant to employees covered by an existing enterprise agreement. However, it will be relevant to an assessment of the better off overall test for any new agreements if it is inserted into modern awards.

The Workplace Gender Equality Agency has published an Employee Flexibility Toolkit which employers might find helpful in dealing with requests for flexible working arrangements.
We continue to watch for the outcome of the 'family friendly work arrangements' case and the decision about whether the model term will be inserted into all modern awards.

Model term

X Requests for flexible working arrangements

Employee may request change in working arrangements

X.1 This clause X applies where an employee has made a request for a change in working arrangements under s.65 of the Act.

NOTE:

  • Section 65 of the Act provides for certain employees to request a change in their working arrangements because of their circumstances, as set out in s.65(1A).
  • An employer may only refuse a s.65 request for a change in working arrangements on 'reasonable business grounds' (see s.65(5) and (5A)).
  • Clause X is an addition to s.65.

Responding to the request

X.2 Before responding to a request made under s.65, the employer must discuss the request with the employee and genuinely try to reach agreement on a change in working arrangements that will reasonably accommodate the employee's circumstances having regard to:

  • the needs of the employee arising from their circumstances;
  • the consequences for the employee if changes in working arrangements are not made; and
  • any reasonable business grounds for refusing the request.

What the written response must include if the employer refuses the request

NOTE:

  • The employer must give the employee a written response to an employee's s.65 request within 21 days, stating whether the employer grants or refuses the request (s.65(4)); and
  • If the employer refuses the request, the written response must include details of the reasons for the refusal (s.65(6)).

X.3 Clause X.3 applies if the employer refuses the request and has not reached an agreement with the employee under clause X.2.

  • The written response under clause X.2 must include details of the reasons for the refusal, including the business ground or grounds for the refusal and how the ground or grounds apply.
  • If the employer and employee could not agree on a change in working arrangements under clause X.2, the written response under clause X.2 must:
    • state whether or not there are any changes in working arrangements that the employer can offer the employee so as to better accommodate the employee's circumstances; and
    • if the employer can offer the employee such changes in working arrangements, set out those changes in working arrangements.

X.4 If the employer and the employee reached an agreement under clause X.2 on a change in working arrangements under clause X.2 that differs from that initially requested by the employee, the employer must provide the employee with a written response to their request setting out the agreed change(s) in working arrangements.

Dispute resolution

X.5 Disputes about whether the employer has discussed the request with the employee and responded to the request in the way required by clause X, can be dealt with under clause Y—Consultation and Dispute Resolution.

References

1Family Friendly Working Arrangements [2018] FWCFB 1692 at 409

1 The Police Federation of Australia (Victoria Police Branch) trading as the Police Association of Victoria v Victoria Police [2018] FWC 5695 at 64

1 https://www.wgea.gov.au/sites/default/files/Flexibility_employee_toolkit.pdf

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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