A number of changes have been made to the flexible working arrangements regime in the Fair Work Act. The eligible circumstances for making a flexible working arrangement are that the employee:
- is pregnant;
- is a parent of, or has the responsibility, for a child of school age or younger;
- is a carer within the meaning of the Carer Recognition Act;
- has a disability;
- is 55 or older; or
- is experiencing family or domestic violence (or provides support to someone in their immediate family or household who is).
If an eligible employee makes a request, the employer must respond in writing within 21 days.
Employers must also comply with additional requirements depending on whether they grant the request, grant an alternative arrangement or reject the request.
Employers may only reject a request if certain preconditions are satisfied, including that the employer must have discussed the request with the employee and genuinely tried to reach an agreement about the requested changes.
The Secure Jobs, Better Pay Act introduced a number of changes which affect how employers must respond to flexible working arrangement requests.
The definition of de facto partner has been amended and is now defined as “another person who, although not legally married to the first person, lives with the first person in a relationship as a couple on a genuine domestic basis (whether the first person and the other person are of the same sex or different sexes)” or a former de facto partner (with the same meaning).
- Individuals experiencing family and domestic violence are now entitled to request a flexible working arrangement
Employees who are experiencing family and domestic violence – rather than ‘experiencing violence from a member of the employee’s family’ – or who are providing care and support to a member of their immediate family or household who requires care and support because they are experiencing family and domestic violence are entitled to request a flexible working arrangement.
- Employers must follow a defined process when responding to – and refusing – flexible working arrangement requests
Section 65A of the Fair Work Act sets out the process that employers must follow when responding to a request for a flexible working arrangement. Employers are required to demonstrate greater accountability for any decisions that they reach, particularly when not inclined to approve a request.
The new process is:
- Employers must meet with the employee
- Employers must try to reach genuine agreement with thee employee
- Employers must consider the consequences that refusing the employee’s request will have on them
While the employer must still give the employee a written response to a request within 21 days, new provisions require an employer (if a request is to be refused) to discuss the request with the employee, genuinely try to reach agreement with them and have regard to the consequences of the refusal for the employee.
Section 65A(5) of the Fair Work Act lists the business grounds that will be reasonable (and these remain unchanged). They are:
- The new working arrangements requested would be too costly.
- There is no capacity or it is impractical to change the working arrangements of other employees to accommodate the request, or to hire new employees.
- The new working arrangements would likely result in a significant loss in efficiency or productivity.
- The requested arrangement would be likely to have a significant negative impact on customer service.
- If refusing a request, an employer must notify the employee within 21 days and include specific information
An employer must tell the employee:
- the reasonable business grounds for the refusal;
- how those grounds apply to their request;
- any changes the employer would be willing to make;
- that they have a right to raise a dispute, first at a workplace level, then in the Fair Work Commission, and the Commission may deal with the dispute by conciliation or mediation; and that the Commission may arbitrate the dispute.
- Individuals can now raise disputes
The ability to raise a dispute under the NES provisions has also now been introduced. If the dispute proceeds to arbitration, the Fair Work Commission may make orders which are binding, including an order that an employer grant the employee’s request. If an employer contravenes an order, serious financial penalties apply.
In light of the above, and given there is limited to no case law at this stage to shed light on what it means to reach “genuine agreement” or to consider the consequences of refusal, we suggest employers:
- take detailed records of all discussions with the employee
- consider what consequences a refusal may have for the employee, and document this thought process, as this may be the subject of discussion with the employee
- consider each of the business grounds for refusal – i.e. why they apply /don’t apply, and document this process
- ensure there is sufficient evidence to support the conclusion that a reasonable business ground applies – e.g. if an employer asserts a flexible working arrangement would have a negative impact on customer service from 3-6pm, and an employee is required to be available at these times, the employer should be ready to provide data that shows customer requests are higher at this time of day
- pay attention to the procedural requirements of responding to a request – act on a request immediately, as not responding in 21 days will entitle an employee to raise a dispute,
- comply with the discussion requirements of the flexible working arrangement if refusing or proposing a different arrangement
Employers will need to assess requests carefully and on a case-by-case basis as there is no “one size fits all” in determining the levels of flexibility required on the part of an employer:
- it is vital an employee clearly requests the change and sets out the reasons for it by reference to their particular eligible circumstances in writing. Discussions regarding proposed changes to working arrangements are not enough to provide the Commission with power to arbitrate a dispute. That said, discussions may be enough to trigger another claim by the employee, including adverse action or discrimination.
- an employer needs to focus on their business reasons – not the options that may be available for an employee to ease the issue in their personal lives or because other employees seem to have the same demands and can cope. If the request is to work away from the office, a view that an employee’s knowledge and experience would be best utilised for training purposes in person, the need for support and low productivity can be reasonable business grounds to require attendance at the office in some circumstances. This is consistent with the reasoning in some post-pandemic unfair dismissal cases where there had been a failure to follow a direction to return to the workplace.
- while there is no express requirement that an employee provide evidence to their employer of their eligibility to make a request, if the refusal of the request is disputed, the Commission must have unambiguous evidence that an eligible circumstance applies (e.g. a medical diagnosis of an actual disability) to arbitrate a dispute. Employers should always inquire as to the nature of the condition and, if there is doubt, ask specifically for a medical opinion of diagnosis, where disability is the eligible circumstance relied upon.
Lessons for Employers
The changes now in operation under the Secure Jobs Act are a reminder for employers to refresh their internal processes and systems in respect of FW Act compliance. It is also a prompt to ensure employers adapt to the new environment which is designed for the FWC to have a more active role to play as “umpire” in many more circumstances than has previously been the case.
If you have any queries about the new Flexible Working Request Obligations for your business, please contact a HR Consultant at Akyra (firstname.lastname@example.org) or 07 3204 8830 to discuss your query.
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The material distributed is general information only. The information supplied is not intended to be legal or other professional advice, nor should it be relied upon as such. You should seek legal or professional advice in relation to your specific situation.