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Australia – How To Respond To Requests For Flexible Working Arrangements.

24 June, 2013

 

Legal News & Analysis – Asia Pacific – Australia – Labour & Employment

 

WHAT YOU NEED TO KNOW

 

  • A private sector employee in Australia currently has a right to request a flexible working arrangement under the Fair Work Act 2009 (Cth) (FW Act).

 

  • Both private and public sector employees may also have rights to request flexibility under an applicable enterprise agreement and/or contract of employment, company policy or in the case of employees in Victoria, under equal opportunity laws.

 

  • A FW Act request must be made in writing and set out the details of the change sought and the reasons for the change.

 

  • An employer must respond to a request in writing within 21 days and may only refuse a request on reasonable business grounds.

 

  • Currently, "reasonable business grounds" are not defined or explained in the FW Act. The Bill currently before Parliament would amend the FW Act to make the "reasonable business grounds" more rigorous than to date.

 

  • There is no right of review of an employer's decision to refuse a FW Act request for flexible working arrangements. However, there are other ways that employees can legally challenge a refusal to grant a request for a flexible working arrangement.


WHAT YOU NEED TO DO

 

  • Employers should carefully review their internal processes and manager training for how to manage these requests, paying close attention to how you:

 

– receive each employee's request;

 

– deal with each request (ensuring you respond in writing within 21 days);

 

– offer any flexible working arrangement; and

 

– review any flexible working arrangement.


Managing employee requests for flexible working arrangements involves balancing an employee's needs with the needs of the business. In this Alert, we set out some practical tips for responding to requests for flexible working arrangements, having regard to proposed changes to the law in this area and some recent decisions of the Fair Work Commission.


WHAT ARE AN EMPLOYEE'S RIGHTS?


A private sector employee in Australia currently has a right to request a flexible working arrangement under the Fair Work Act 2009 (Cth) (FW Act).


Both private and public sector employees may also have rights to request flexibility under an applicable enterprise agreement and/or contract of employment, company policy or in the case of employees in Victoria, under equal opportunity laws.


Under the current FW Act entitlement, an employee who is a parent, or who has responsibility for the care of a child who is under school age, may request a change in working arrangements to assist the employee to care for the child. Parents or carers of children with disabilities are entitled to make such a request up until the child is 18 years of age.

 

To qualify for the entitlement the parent/carer must have worked for the employer continuously for at least 12 months. A casual employee must have been employed on a regular and systematic basis for at least 12 months.


A Bill currently before Parliament proposes to:

 

  • extend this entitlement to employees who are carers more broadly (ie not just carers of children), people who have a disability, are 55 years of age or older or are experiencing, or providing support to a family member who is experiencing, domestic violence;

 

  • allow a request to be made to change hours of work, patterns of work and location of work; and

 

  • entitle an employee who is a parent, or has responsibility for the care of a child, and who is returning to work after taking leave in connection with the birth or adoption of the child, to request to work on a part-time basis.


WHAT DOES THE EMPLOYEE NEED TO INCLUDE IN THE REQUEST?


A FW Act request must be made in writing. It must also set out details of the change sought and the employee's reasons for the change.


WHAT MUST AN EMPLOYER DO WHEN IT RECEIVES A REQUEST?


An employer must respond to a request in writing within 21 days. The response must say whether the employer agrees to the request, or not, and if the employer does not agree to the request, why not. An employer may only refuse a request on reasonable business grounds.


WHAT ARE REASONABLE BUSINESS GROUNDS?


Currently, "reasonable business grounds" are not defined or explained in the FW Act. However, the FW Act contemplates that the reasonableness of the grounds should be assessed at the time the request is made.


The Bill currently before Parliament would amend the FW Act to define "reasonable business grounds" to include that:

 

  • the new working arrangements would be too costly;

 

  • there is no capacity to change the working arrangements of other employees to accommodate the new working arrangements;

 

  • it would be impractical to change the working arrangements of other employees, or recruit new employees, to accommodate the new working arrangements;

 

  • the new working arrangements would likely result in a significant loss in efficiency or productivity; and

 

  • the new working arrangements would be likely to have a significant negative impact on customer service.


This non-exhaustive definition suggests an employer must be satisfied that not granting the request would lead to a significant adverse effect on the employer's business or the way that business operates. In this way, "reasonable business grounds" appears to be a much more rigorous test than has been applied to date.


WHAT CAN AN EMPLOYEE DO IF THE EMPLOYER REFUSES THE REQUEST?


There is no right of review of an employer's decision to refuse a FW Act request for flexible working arrangements. However, as recent cases have demonstrated, there are other ways that employees can legally challenge a refusal to grant a request for a flexible working arrangement.


For example, an employee may claim that:

 

  • an employer's refusal is unlawful discrimination on the ground of the employee's sex or career responsibilities;

 

  • s/he was treated less favourably because of family responsibilities during employment and/or connected with termination of employment, in breach of the general protections provisions of the FW Act;

 

  • s/he was forced to resign from employment due to an unreasonable refusal by an employer, and that this constitutes a constructive dismissal. This may be challenged by an unfair dismissal application (eg as successfully argued by an employee in Rind v Australian Institute of Superannuation Trustees [2013] FWC 3144); and/or

 

  • an enterprise agreement requirement that promotes flexibility and consideration of an employee's family responsibilities has not been complied with (eg as argued by an employee in the context of a Bunnings Group Limited enterprise agreement that provided for family responsibilities to be considered when determining roster arrangements (Lamb v Bunnings Group Limited [2013] FWCFB 2698)).

 

In some cases, an employee may try to stop an employer from making a decision about his/her employment for one of these reasons, including by seeking an injunction.


In addition, if an employee makes a request for a flexible working arrangement when the employee is returning to work from parental leave, the employer must also be mindful of an employee's FW Act entitlement to return to the employee's pre-parental leave position.


The FW Act right to request a flexible working arrangement has often been criticised because it lacks a review mechanism. The Bill currently before Parliament that will extend the classes of people who can request flexible working arrangements does not introduce a review mechanism.


While there is no direct legal risk from refusing a FW Act request for a flexible working arrangement, employers must be considered in their response to a request for a flexible working arrangement. This will help to minimise exposure to other legal risks, some of which we have described above.


HOW CAN WE MANAGE THE LEGAL RISKS?


Employers are likely to experience more requests for flexible working arrangements if the proposed changes to flexible working arrangements are implemented.


The Fair Work Ombudsman has released a Best Practice Guide Work & family which may help with these issues. The Guide is available at http://www.fairwork.gov.au/BestPracticeGuides/01-Work-and-family.pdf.


Employers should carefully review their internal processes and manager training for how to manage these requests, paying close attention to:


Receiving the employee's request

 

  • Clarify exactly what the employee is requesting.

 

  • Is it a request to work part time or for some other flexible working arrangement?

 

  • Is it a request on a trial, temporary or permanent basis?

 

  • Ask the employee to specify the reason for the request.


Dealing with the request

 

  • Consider each request on its merits against genuine operational requirements and other relevant grounds.

 

  • Use the proposed "reasonable business grounds" discussed above (once the Bill has become law) as a guide (eg cost, loss of productivity, adverse impact on other employees/customer service) as well as any grounds included in your organisation's policies.

 

  • Train your managers on the risks of not approving requests, how to apply relevant criteria to make a decision and the considerations which should not be taken into account.

 

  • Ensure you can substantiate the grounds relied upon and have evidence to support the decision made in relation to each ground.

 

  • Maintain open and honest communication with employees during the process and carefully manage their expectations.

 

  • Review the outcomes from previous requests for flexible working arrangements to achieve consistency, where appropriate.

 

  • Be open to all options – eg trial, graduated return to full time work, working from home, job share, purchase of new software or technology to facilitate the arrangement.

 

  • Seek legal advice where the risks are higher.


Offering a flexible working arrangement

 

  • Document all discussions about, and all temporary and permanent arrangements agreed with, the employee in an objective and impartial way.

 

  • In any document offering a flexible work arrangement, be sure to include (if applicable):


– the duration for which it applies: is it a temporary or permanent arrangement?


– that the arrangement is subject to regular review (and specify the review date(s))


– what will happen if the arrangement is temporary and is not extended after review?


– a right to vary the arrangement, subject to reasonable notice (seek advice if you propose to do this)


– how the new document sits with the employee's existing contract of employment and any other relevant employment documents.

 

Reviewing a flexible working arrangement

 

  • Ensure you conduct reviews at the dates advised to the employee.

 

  • Obtain feedback from all relevant parties when conducting the review (the employee, his/her manager, other employees, clients etc).

 

  • Give the employee the opportunity to respond to any negative feedback received in the review.

 

  • Revisit the considerations above under 'Dealing with the request' if the flexible working arrangement may be revoked.

 

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For further information, please contact:

 

Marie-Claire Foley, Partner, Ashurst
marie-claire.foley@ashurst.com


Julia Sutherland, Ashurst
julia.sutherland@ashurst.com


Julie Mills, Ashurst
julie.mills@ashurst.com

 

 

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