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Is it Reasonable to Say No? Flexible Working Arrangements and the New Obligations
From 6 June 2023, as a result of the recent amendments to the Fair Work Act 2009 (the “FW Act”), employers will have increased obligations to genuinely try to accommodate its employees’ requests for flexible working arrangements. The changes mean that employers will need to review their current practices and ensure that requests for flexible working arrangements are only refused on reasonable business grounds.
Changes to the FW Act
- Grounds to request flexible working arrangements
Under the FW Act, flexible working arrangements may include changes in work hours, patterns of work and location of work. Requests can be made by an employee who has worked for the employer for at least 12 months, and:
- is pregnant;
- is the parent, or has responsibility for the care, of a child who is of school age or younger;
- is a carer;
- has a disability;
- is 55 or older;
- is experiencing family and domestic violence; or
- provides care or support to a member of their immediate family or household, who requires care or support because the member is experiencing family and domestic violence.
For an employee to make a request for flexible working arrangements, the request must be in writing and must set out the details of the change sought, and the reasons for the change.
- Process for considering a flexible working arrangement request
Currently, an employer can refuse a request on reasonable business grounds. However, from 6 June 2023, when considering whether to agree to or refuse a flexible working arrangement, an employer will only be able to refuse the request if:
- the employer has discussed the request with the employee and genuinely tried to reach an agreement with the employee and accommodate their circumstances;
- the employer and employee have not reached such an agreement;
- the employer has had regard to the consequences of the refusal for the employee; and
- the refusal is on reasonable business grounds.
- Written response requirements
After considering a flexible working arrangement request, the employer must give the employee a written response to the request within 21 days, stating whether the employer grants or refuses the request.
If the employer refuses the request, the written response must include details of the reasons for refusal, set out the employer’s particular business grounds for refusing the request and how those grounds apply to the request. Further, the written refusal must either set out other changes that it is willing to make to the employee’s working arrangements, or state that there are no such changes.
- Dispute resolution
Where an employer has refused a request or has not provided a written response to the request within 21 days of it being made, and the parties are unable to resolve the dispute through discussion at the workplace level, the dispute can be referred to the Fair Work Commission (the “FWC”) for conciliation. If the conciliation fails, the FWC will have the power to deal with the dispute as it considers appropriate through mandatory arbitration.
What are reasonable business grounds?
The FW Act defines reasonable business grounds as including the following:
- that agreeing to the request 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 agreeing to the request would be likely to result in a significant loss in efficiency or productivity; and
- that agreeing to the request would be likely to have a significant negative impact on customer service.
The FW Act also notes that the specific circumstances of the employer, including the nature and size of the enterprise carried on by the employer, are relevant to whether the employer has reasonable business grounds for refusing a request. For example, if the employer has a small number of employees, there may be no capacity to change the working arrangements of other employees to accommodate the request.
In a recent decision, the FWC found that an employer did not have reasonable business grounds for refusing its employee’s request for flexible working arrangements. In this case, the employee had young children and requested alternative shift hours, and the employer rejected her request because it did not match the employer’s roster patterns or meet its shift weighting calculator.
In considering the reasonableness of the employer’s refusal, the FWC noted that the employer did not provide any evidence of it considering how it might benefit from allowing its employee to work flexibly.
Further, the FWC commented on the upcoming legislative changes, and reiterated that reasonable business grounds are assessed by the FWC on an objective basis, and that the onus of establishing this lies with the employer.
Employers will need to comply with the formal processes set out under the FW Act and ensure that they have reasonable business grounds if they refuse an application for flexible working arrangements.
Although these changes do not take effect until 6 June 2023, employers should begin a review of existing systems and policies in relation to managing and responding to requests for flexible working arrangements to ensure that they are aligned with the amendments.
Kirryn West James, Director