Part of the substantial industrial relations reforms which were enacted by the Federal Parliament last December include changes to the rules around flexible working arrangements
The Fair Work Act already had provisions that allow an employee to request a change to his or her working arrangements in certain circumstances, such as requesting a change in hours or location of work due to parenting or caring responsibilities, being over 55 years of age, or a disability. A number of changes have been made to these provisions in the Act, designed to facilitate better access to such requests, and reduce the ability of employers to reject those requests. These changes come into effect on 6 June 2023.
First, the Act seeks to expand the operation of these entitlements by also enabling an employee to request a flexible working arrangement:
- where the employee has experienced family and domestic violence; or
- where the employee is pregnant.
Second, the Act updates the procedures that govern how employees may request a flexible working arrangement from their employer. Specifically, an employer will be required to respond to the request within 21 days with a written response that either:
- grants the request;
- provides an agreed amended request (if, following discussion, the parties agree to amend the request); or
- refuses the request with reasons.
Third, if an employer refuses a request, they must provide the reasons for the refusal, the business grounds that underpin the refusal, and any changes the employer would be willing to make.
The grounds for refusing a request have been tightened and a request can only be refused following discussions where the parties genuinely tried to reach agreement and the employer has had regard to the consequences of refusing such a request.
The Act continues to define "reasonable business grounds" to include (without limitation):
- when the request is too costly for the employer;
- when there is no capacity to change the working arrangements of other employees to accommodate the requested working arrangements;
- when the changes would be impractical by requiring changes to work arrangements of existing employees or the hiring of new employees;
- when the change would likely result in significant loss in efficiency or productivity; and
- when the changes would likely have a significant negative impact on customer service.The Act specifies that the nature and size of the enterprise carried on by the employer is relevant to determining whether the employer has "reasonable business grounds" to refuse a request. For example, if the employer has only a small number of employees, there may be no capacity to change the working arrangements of other employees to accommodate the request.
Finally, the Act provides for new mechanisms to dispute a refusal to grant a flexible working arrangement. An employee can access this new jurisdiction if the employer does not grant the request or does not respond in 21 days with a written explanation for the refusal. As is common with existing disputes clauses in modern awards and enterprise agreements, parties must now attempt to resolve the dispute at the workplace level and if not resolved there, a party can apply to the FWC to assist with resolving the dispute.
The FWC will be given powers to first (unless there are exceptional circumstances) deal with the dispute by means other than arbitration, including conciliation and mediation. After mediation or conciliation (or where there are exceptional circumstances), the FWC may then arbitrate a dispute and issue orders relating to a refusal to grant a flexible working arrangement, where there is no reasonable prospect of the parties resolving the dispute themselves, taking into account fairness between the employer and the employee before making any order. In arbitrating a dispute the FWC can
- order that the employer grant the request; or
- order that the employer make specified changes (other than the requested changes) in the employee's working arrangements to accommodate, to any extent, the circumstances that apply to the particular employee.
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