Flexibility, compliance and culture: Ideas for 2018

Sam Cahill, Associate

For many employers, the summer break offers an opportunity to recalibrate and plan for the year ahead. In this article, we look ahead to the new year, and suggest some initiatives employers might consider implementing to enhance employee satisfaction, address cultural issues and ensure compliance with workplace laws.

Flexibility

In today’s workforce, the opportunity to work flexibly is coveted by many employees. But when employers think of flexible working arrangements, they usually limit themselves to the right to make a request for flexible working arrangements under the National Employment Standards (“NES”). This right is limited to employees who meet the eligibility requirements (for example, 12 months’ continuous service, returning from parental leave, carer’s responsibilities or over 55 years of age).

In 2018, employers should consider taking a proactive approach to flexible working arrangements, rather than simply waiting for eligible employees to make a request under the NES. A more open approach to flexible working arrangements can be used to attract talented people to the organisation and enhance satisfaction and retention among existing staff.

A proactive approach necessitates a focus on identifying particular functions, positions or duties that can be performed on a flexible basis (for example, at different locations and times). A good starting point for this exercise is to review the flexible working arrangements that have been provided to employees in the past and where the functions, positions or duties that have been the basis for flexible work arrangements can be expanded or modified in light of current operating needs.

Compliance

In recent years, the Fair Work Ombudsman (“FWO”) has pursued employers in relation to a range of compliance issues, particularly the underpayment of wages and entitlements.

In September this year, the Fair Work Act 2009 (Cth) was amended to include a number of new measures aimed at protecting “vulnerable workers”.1 These measures include:

  • stronger powers for the FWO to collect evidence in investigations;
  • new penalties for providing false or misleading information to the FWO, or hindering or obstructing an FWO investigation;
  • increased penalties for “serious contraventions” of workplace laws (ie, deliberate contraventions);
  • increased penalties for breaches of record-keeping and pay slip obligations; and
  • a reverse onus of proof in underpayment claims where an employer has not met record keeping or pay slip obligations and cannot show a reasonable excuse.

This means that it is more important than ever for employers to take a proactive approach to ensuring compliance with workplace laws. An important first step towards ensuring compliance is to conduct a thorough review of the organisation’s employment arrangements, including:

  • the engagement of employees and other workers (including the procurement of any external labour services);
  • the coverage and application of industrial instruments (Modern Awards and Enterprise Agreements);
  • compliance with award/agreement requirements with respect to rostering, minimum rates of pay, loadings, penalties and allowances;
  • the accrual and payment of leave entitlements, including the recognition of prior service where appropriate;
  • compliance with obligations in relation to pay slips and record keeping; and
  • the impact of any changes to Modern Awards made by the Fair Work Commission as part of its Four Yearly Review of Modern Awards (for example, the introduction of new provisions regarding annual leave and casual conversion).

The purpose of such a review is to uncover any existing or potential compliance issues so they can be resolved internally and with minimum disputation and/or external scrutiny. The review may also highlight areas in which the organisation will need to develop systems and processes to ensure compliance going forward.

An employer’s compliance obligations under the various workplace laws are subject to almost constant change. This means that employers are required to continually review and adjust their systems and processes. For example, in July this year, as part of the Four Yearly Review of Modern Awards, the Fair Work Commission decided to incorporate a model “casual conversion” clause into 85 Modern Awards. The model clause provides that:

  • the employer must inform casual employees of their right to request a conversion within the first 12 months of employment;
  • casual employees who have worked a standard pattern of hours over the 12-month period will be eligible to make a request to convert to full-time or part-time employment; and
  • a request to convert can only be refused on reasonable business grounds (for example, where the conversion would require a significant adjustment to the casual employee’s hours of work or where it is known or reasonably foreseeable that the employee’s position will cease).

For some employers, the idea of casual conversion is nothing new, as it has existed in certain industries for some time. However, for others, it will be necessary to develop the appropriate systems and processes for:

  • monitoring the engagement and pattern of work of casual employees;
  • notifying relevant employees of their right to request a conversion to permanent employment; and
  • considering and making decisions in relation to requests for permanent employment.

The performance of these systems and processes will then need to be measured as part of the next review of the organisation’s employment arrangements.

Culture

In recent months, a number of allegations, mainly relating to sexual harassment and other inappropriate behaviour, have surfaced in relation to a growing list of high-profile men, including Hollywood celebrities, politicians and business leaders. In some cases, the alleged conduct was repeated over many years and was even well-known within certain organisations and industries. This has raised the question: why has it taken so long for the allegations to surface?

As discussed in the earlier article, “Power, sex and silence in the workplace”, this delay has been attributed to a number of factors, including a reluctance to report misconduct due to fear of victimisation, leading to a “culture of silence” within particular organisations. Some have argued that this culture of silence amounts to a “culture of complicity” in the action of the perpetrator. This topic will be one of the topics addressed in our series of PCS webinars next year.

Employers can take a number of steps to try and overcome a “culture of silence”. These include:

  • encouraging a culture of appropriate conduct modelled by senior staff within the organisation;
  • ensuring that anyone who reports conduct is treated with respect and their experience is not minimised;
  • ensuring the policies are drafted so that employees are specifically required to report any inappropriate conduct;
  • introducing stronger protections against victimisation for workers who report conduct; and
  • ensuring that workers receive training in relation to bullying, harassment and discrimination and what to do if they experience or witness this type of behaviour in the workplace.

  1. Fair Work Amendment (Protecting Vulnerable Workers) Act 2017.

Parental Leave: Changes, insights and opportunities

Lyndall Humphries, Senior Associate

The workforce of today is one in which both male and female workers balance competing priorities of work and family life. This article looks at what support the Government provides to primary carers and working parents, how this responsibility can be shared by employers and what opportunities this may present in the context of the current legal framework.

Paid Parental Leave

Prior to 2011, while Australia provided some financial assistance for costs associated with newborn or adopted children, it was one of only two OECD countries without a national paid parental leave scheme (“PPL Scheme”). This changed with the introduction of the Paid Parental Leave Act 2010 (Cth) (“PPL Act”) in January 2011.

The PPL Act provides for Australia’s PPL Scheme which currently consists of the following Government-funded payments:

  • Parental Leave Pay: an 18-week payment at the national minimum wage for eligible primary carers (most commonly birth mothers) of newborn and recently adopted children; and
  • Dad and Partner Pay: a two-week payment at the national minimum wage for eligible dads or partners caring for newborn or recently adopted children.

Payments under the PPL Scheme are currently made irrespective of whether an individual receives employer provided parental leave payments and regardless of the amount of such payments. This means that individuals can receive parental leave payments from both the Government and their employer.

Proposed changes

Last year the Government proposed changes to the PPL Act as part of its 2015-16 budget measures and the Fairer Paid Parental Leave Bill 2015 was introduced in the House of Representatives on 25 June 2015. Under these proposed changes, an employee who is eligible to receive Parental Leave Pay must notify the Government of any employer-provided parental leave payments. If any such payments are being received, the employee’s Parental Leave Pay would be reduced by the amount of those payments. This could mean that an individual would not be entitled to receive any Parental Leave Pay under the PPL scheme.

The proposed changes were originally scheduled to take effect on 1 July 2016 but did not pass through the House of Representatives by this date and have now been stood over indefinitely pending changes to Government policy in the lead-up to the next federal election. This is welcome news for unions, industry and equality groups and non-Government parties who, on the whole, did not support the proposed changes. However, it has been reported that the Government remains committed to making changes to paid parental leave in the event the Coalition wins the next election but the detail is unclear. We anticipate that the proposed changes may change again. Watch this space.

A competitive edge

It is against this backdrop that Australian employers are increasingly seeing paid parental leave as a way of attracting and retaining talent, addressing skill shortages and lower levels of female workforce participation, and differentiating their business from competitors.

It also has the effect of promoting diversity and inclusion in the workplace and supporting gender equality and non-discrimination.

Unpaid Parental Leave

Paid parental leave is complemented by the entitlement to unpaid leave under the National Employment Standards (“NES”) in the Fair Work Act 2009 (Cth) (“FW Act”). Twelve months’ unpaid parental leave is available to employees (including eligible casual employees) with 12 months’ continuous service if the leave is associated with the birth or adoption of a child under 16 years of age.

Return to Work Guarantee

The NES also provides a return to work guarantee at the end of unpaid parental leave so that an employee may return to their pre-parental leave position, or, if the job no longer exists, to an available position for which the employee is qualified and suited, nearest in status and pay.

The fact that an employee is pregnant, intends to take or takes parental leave and/or has a return to work guarantee does not prevent an employer from making a position redundant if the redundancy is genuine. The employer must be able to prove that these factors were not the reason or part of the reason for making the employee’s position redundant. In the case of Schultz v Scanlan & Thodore Pty Ltd [2013] FCCA 1096 the employer produced evidence of a significant downturn in the employer’s business, the requirement to cut costs (including by reducing the number of staff) and the consideration given as to why a particular role ought be made redundant, and the Court found that this demonstrated that the employer did not take adverse action against the employee.1

Right to Request Flexible Working Arrangements

The entitlement under the NES to request flexible working arrangements is intended to assist parents (and others with caring responsibilities) to balance working arrangements with family and caring responsibilities. Employees (including eligible casual employees) with 12 months’ continuous service who are parents, or who have the responsibility for the care of a child of school age or younger, have a right to request flexible working arrangements to assist them to care for a child.

A request for flexible working arrangements may only be refused on “reasonable business grounds” and, if refused, details must be provided in writing. The NES provides guidance on what constitutes “reasonable business grounds” by providing a non-exhaustive list of factors including if the new arrangements would be too costly, if there are limitations on changing the arrangements of other employees or if the new arrangements would be likely to result in a significant loss in efficiency or productivity or have a significant negative impact on customer service.

Anti-Discrimination Obligations

Whether or not an employee is covered by the above NES entitlements, it may, in certain circumstances, amount to discrimination under anti-discrimination legislation or adverse action under the FW Act to refuse to return an employee to their pre-leave position or to allow flexible work arrangements. In this regard, an employer must ensure that an employee’s sex or family responsibilities do not unfairly influence its decisions.2 In the case of Heraud v Roy Morgan Research Ltd [2016] FCCA 185 the Court found that the employer’s decision to make an employee redundant was linked to the employee’s scheduled return from parental leave and the employer therefore took adverse action against the employee by not returning her to her pre-parental leave position, even if that position was only available for her return to for less than two months.

Opportunities

In the context of these legal obligations employers are encouraged to see working parents as an asset and the abovementioned NES entitlements as opportunities. When an employee returns to work or flexible working arrangements are successfully implemented, it can:

  • reduce costs related to recruitment and restructuring;
  • minimise the need for retraining as knowledge and experience is retained within the business;
  • widen the talent pool; and
  • increase organisational productivity and performance because flexible workers need to be organised and effective.

The provision of support to primary carers and working parents may increase employee job satisfaction, motivation and loyalty to their employer. Significantly, it is also likely to improve an employer’s reputation, enhance goodwill and create a positive team culture.

Leading practice 

In addition to employer-provided parental leave payments some employers are going above and beyond their minimum legal obligations to provide other initiatives that support primary carers and working parents. Some examples3 are set out below:

  • ANZ and Dexus Property Group provide continuity of superannuation contributions during parental leave.
  • NAB and Stockland have childcare facilities at their offices in Sydney (and North Sydney).
  • Laing O’Rourke provides support during parental leave, including keeping in touch programs and return to work coaching.
  • Goldman Sachs focuses on communication during parental leave, including one-on-one meetings with the CEO and business updates before, during and upon return from leave.
  • Caltex has implemented measures to support employees returning to work and increase retention rates. This includes a 3% a quarter bonus up until the child is 2 years old.
  • Telstra has mainstreamed flexibility by rolling out “All Roles Flex”, an initiative whereby every role in the company can be undertaken flexibly and where the focus is on productivity and outcomes rather than face time.

Key Takeaways 

  • Paid parental leave in Australia is a relatively new and evolving notion – employers are encouraged to embrace the opportunities it presents.
  • The National Employment Standards set out various protections for primary carers and working parents (including a return to work guarantee and a right to request flexible work arrangements).
  • Anti-discrimination legislation protects parents and carers from discrimination in the workplace.
  • Organisations should maintain the confidence to make necessary business decisions in relation to the positions of employees on parental leave, so long as those decisions can be justified objectively.
  • Employers are implementing leading practice initiatives which support primary carers and working parents to gain an advantage over their competitors.

(1) See for example Schultz v Scanlan & Thodore Pty Ltd[2013] FCCA 1096 at [144]-[159].

(2) See for example Heraud v Roy Morgan Research Ltd [2016] FCCA 185 at [192], [197]-[198].

(3) Australasian Human Rights Commission, Successful Strategies to Support Working Parents, 2016.

Employer Funded Paid Parental Leave – Top 5 Things to Consider

Beverley Thomas, Associate

Despite lingering uncertainty about the future of the Government’s Paid Parental Leave Scheme, many organisations continue to develop and implement their own unique Parental Leave Policies to entice to job applicants, encourage diversity and improve the work-life balance of their employees.

Globally, we have seen companies, particularly in the tech space, making waves with their policies. For example, online e-commerce company, Etsy, offers a half year’s paid leave to its employees and Netflix provides its employees with “unlimited” paid leave during the first year after the birth or adoption of a child. Regardless of where your organisation draws its inspiration from, there are a few things to keep in mind when designing your Paid Parental Leave Policy. Here are our top tips:

  1. Remember that paid leave equals service: Some employee entitlements are determined by years of “service”. While periods of unpaid leave do not count towards service, paid periods of leave usually do. This means that employees will accrue annual and personal leave during periods of employer funded paid parental leave, so it is worth factoring in this cost when designing a policy.
  2. Foster a culture of acceptance: There’s no use in implementing generous family friendly policies if the culture of the workplace is such that an employee would be frowned upon if they accessed the policy’s benefits. Acceptance is something that should filter from the top down in order to have the most influential impact. Recently, Facebook founder Mark Zuckerberg, took two months off to spend time with his wife and new daughter after her birth. This sent a powerful message to employees of this social media network that equally grants new mums and dads four months of paid parental leave.
  3. Benefits are best kept discretionary: Business environments, governments and legislation can all change and affect your organisation’s ability to provide benefits in excess of its obligations. For this reason, it is generally recommended that a Paid Parental Leave Policy is contained in its own policy document as opposed being drafted into contract of employment or enterprise agreement. Provided it is made clear that it is not an entitlement and subject to change, this will assist you organisation to alter its policy from time to time with less exposure to a legal claim.
  4. Keep diversity at the forefront: Surrogacy, adoption, fostering and same-sex relationships are just some of the features of today’s diverse society. Avoid directly or indirectly discriminating against particular groups by taking a gender neutral approach to policy drafting and extending benefits to less commonly considered scenarios.
  5. Think outside the square: Providing employees with paid leave is only one way that employers can take a family friendly stance. Consider other options that might be more suitable for your organisation, such as providing employees with a bonus upon their return to work after taking parental leave. Other options include continuing to make superannuation contributions to an employee during periods of unpaid parental leave or facilitating flexible work arrangements upon a parent’s return to the workplace.

Making flexibility work

Michael Starkey, Graduate Associate

The drive to more flexible working arrangements is in the spotlight again, with big four professional services firm EY announcing recently that coming into work is optional for its employees. The arrangement is part of EY’s Workplace of the Future program and aims to place focus on outcomes rather than presenteeism. While the EY method might not be right for all organisations, here are our top tips on how to get flexible working arrangements right in yours. 

Know your obligations

Under the Fair Work Act 2009 (Cth) (“FW Act”) certain employees (for example, parents of school aged or younger children, carers and employees with a disability) have the right to request a flexible working arrangement. An employer may only refuse such a request on reasonable business grounds, which might include the arrangement being too costly, or it being impractical to change the working arrangements of other employees to accommodate the arrangement.

Recognise the benefits

There is nothing preventing employers from offering flexible working arrangements to employees who fall outside the scope of employees entitled to request such an arrangement under the FW Act. Rather than being seen as an impost, organisations should consider the potential benefits of implementing flexible working arrangements on a wider level. Those benefits might include:

  • building organisational diversity by, for example, encouraging the workplace participation of carers with children;
  • encouraging employees nearing retirement age to continue working through more flexible practices; and
  • attracting top-talent by differentiating your organisation from others through non-monetary benefits.

Recognise your options

Flexible work comes in many forms, with options growing rapidly as technology advances. Employees might be allowed to work, for example:

  • part-time;
  • compressed hours (full-time over fewer days);
  • from home;
  • in job-sharing arrangements; or
  • reduced hours in certain weeks through the creative use of leave.

Organisations should think innovatively to come up with an option, or combination of options, that works best for them.

Set clear expectations

Employers should make clear (for example, through documented policies) that, in return for the benefit of flexible work arrangements, employees are expected to maximise discretionary effort and deliver on agreed outcomes. The success of flexible work arrangements should be tracked through regular check-ins. By framing flexible work arrangements as part of broader initiatives to build employee engagement, organisations can achieve buy-in and reap the rewards of associated cultural and productivity benefits.

​Wealth for TOIL? Time off in lieu of payment for overtime

Last week, the Fair Work Commission (the “FWC”) handed down a model term proposed to be inserted into modern awards to allow for employees to take time off in lieu of payment for overtime (“TOIL”). This interesting development coincides with the current debate about flexibility in the workplace, particularly in relation to the payment of penalty rates for weekend work.

The model term provides that each hour of overtime worked by an employee may be taken as one hour of time off during ordinary time hours in the event of agreement between the employee and his or her employer. Various safeguards have been devised, including:

  • an employer must not exercise undue influence over an employee’s decision in relation to TOIL; and
  • an employee may request at any time to be paid at the overtime rate for any time in lieu not yet used.

The concept of TOIL is astute and has the potential to benefit both employers and employees. For example:

  • employers may be able to increase operating hours without incurring the increased costs associated with overtime; and
  • employees for whom time (more so than money) is at a premium may be able to structure their working hours in a way that suits their responsibilities outside of work.

As was acknowledged by the FWC in its decision, TOIL has the potential to “encourage greater workforce participation, particularly by workers with caring responsibilities”.

Further, a recent survey of the FWC revealed that 32 per cent of employees ranked flexibility to balance work and non-work commitments as the biggest driver of their overall job satisfaction. This outweighed all other drivers, including the work itself, hours and pay.[1]

In a political context in which debate over the fundamentals of Australia’s workplace relations system appears to be intensifying, any measure that has the potential to align the interests of employers and employees is welcomed.

TOIL is just one mechanism by which employers can increase flexibility in their workplace and organisations should be proactive in determining others that may help them achieve the same. More flexible workplaces are likely to attract the best talent, have higher workplace morale and, consequently, experience increases in productivity.

If your organisation needs assistance in this area, contact one of the PCS legal team today.


[1] Fair Work Commission, Australian Workplace Relations Study, available at <https://www.fwc.gov.au/documents/awrs/AWRS-First-Findings.pdf>,47.

Accommodating employees with disabilities: making “reasonable adjustments”

Earlier this month, in Huntley v State of New South Wales, Department of Police and Justice (Corrective Services NSW) [2015] FCCA 1827 (“Huntley”), the Federal Circuit Court ordered a New South Wales government agency to pay a former employee over $180,000 after it was found that the agency had failed to make “reasonable adjustments” to accommodate the employee after she was diagnosed with Crohn’s disease.

The case draws attention to important issues for employers: what are “reasonable adjustments”, and when are employers required to make them?

What are “reasonable adjustments”?

Under the Disability Discrimination Act 1992  (Cth), an employer must consider:

  • what reasonable adjustments it can make to ensure employees with disabilities are not treated less favourably than employees without disabilities; and
  • whether making reasonable adjustments would enable an employee with a disability to comply with a usual requirement or condition of their job.

An adjustment will be seen as reasonable if it does not impose “unjustifiable hardship” on an employer. Whether this is so will depend on several factors, including:

  • what benefit or detriment will result to any person if the adjustment is or is not made; and
  • the financial circumstances of the employer.

Examples

In Huntley, the agency terminated the employee’s employment partly because it determined she could not drive for periods of longer than thirty minutes as required by her role. In doing so, it failed to properly consider medical advice that said the employee could drive for longer than thirty minutes if she took rest breaks. In failing to consider rest breaks as an option, the agency failed to make reasonable adjustments and therefore unlawfully discriminated against the employee.

Whether an adjustment is reasonable will always depend on the particular circumstances of the employment. However, other examples may include:

  • allowing an employee some flexibility in working hours;
  • relocating an employee’s office to a more accessible location;
  • providing additional training; or
  • devising alternate performance measures so employees with certain disabilities can demonstrate their ability to do the job.

Proposed changes to the Paid Parental Leave scheme

Baby out with the bath water?

Earlier this week as part of the budget rollout, Ministers announced the potential end of “double dipping” from the federal government’s paid parental leave (“PPL”) scheme. The legislation currently allows new mothers to receive PPL from the Commonwealth in addition to any entitlements from their employers. Starting on 1 July 2016 women whose employer’s paid parental leave benefits amount to more than $11,500 will be ineligible for any taxpayer-funded PPL. Employees who receive benefits less than this will be entitled to “top up” to $11,500. Women who do not receive any PPL from their employers will continue to receive their current entitlement. This policy amendment is expected to affect up to 79,000 women around the country.

A change such as this will have ramifications for employees and employers alike. For companies, a generous PPL benefit can attract top talent and encourages a culture which values families and flexible work arrangements. For employees, paid parental leave can be a vital step towards achieving equality in the workplace. Many who have entered into employment contracts or voted on enterprise agreements under the current scheme may be looking for alternative compensation or supplementary benefits.

While employers should be conscious of the impact on employees if the budget is passed in its current form, the answer may not necessarily be more cash. Creative solutions will allow businesses to manage costs while continuing to recruit and retain an elite workforce. For example, employers may look to allowing leave to be taken in a more flexible manner as opposed to immediately after the birth or adoption of a child.

Although the future of the PPL scheme is uncertain, it is clear from the response to the announcement that the government faces an uphill battle.

I want flexibility with that: what are your obligations to accomodate flexible working requests?

Sina Mostafavi, Senior Associate

Like many countries worldwide, Australia has in place a legislative scheme to provide workers the ability to request exible working arrangements to accommodate their family or caring responsibilities (the “Flexible Work Scheme”).

How did we get here?

In 2009, Australia introduced a right to request flexible work arrangements as part of the minimum “safety net” for all employees covered by the federal system.

The Flexible Work Scheme was essentially modelled on the approach adopted in the UK, with the right to request to be refused only on “reasonable business grounds”.

The right to request is made available to employees who have completed at least 12 months’ continuous service, or long-term casuals with an expectation of continuing employment.

In 2013 the Federal Government amended the Fair Work Act 2009 (Cth) (the “FW Act”) to, amongst other things, enhance the Flexible Work Scheme and make it more “family friendly” (the “2013 Reforms”). This included:

  • an expansion in the range of employees who can make a request; and
  • greater clarity in relation to the “reasonable business grounds” basis for refusing a request.

The 2013 Reforms also incorporated a new obligation for employers to consult employees on changes to rosters and hours of work, and for employers to take account of the views expressed by employees of the impact of any such proposed changes, including any impact in relation to their family or caring responsibilities.

Despite the amendments, the Flexible Work Scheme retains its original structure as a “right to request”, that is one that is not subject to oversight or review by a court or tribunal.

In this article we critique the changes to the right to request flexible work arrangements and the new consultation requirements, and their operation in practice. We highlight what issues remain contentious, and where there is likely to be debate over interpretation and application in the future.

Expansion of Eligibility

One of the most notable aspects of the 2013 Reforms is the expansion of the categories of employees who are eligible to request flexible work arrangements to include:

  1. a parent, or a person who has responsibility for the care, of a child who is of school age or younger;
  2. a carer (within the meaning of the Carer Recognition Act 2010 (Cth));
  3. an employee with a disability;
  4. an employee who is 55 or older;
  5. an employee who is experiencing violence from a member of the employee’s family; and
  6. an employee who provides care or support to a member of the employee’s immediate family, or a member of the employee’s household, who requires care or support because the member is experiencing violence from the member’s family.

This expansion encompasses a range of non-child dependent care arrangements.

The automatic inclusion of older workers (over 55 years of age) – without any requirement for that individual to indicate their status as a carer – acknowledges the broader fiscal and public policy concerns of extending the workplace participation of older workers.

Employees with disabilities are also covered, as well as those experiencing domestic violence or caring for and supporting such a person. Some of these categories overlap with the existing obligations under Australian anti-discrimination legislation that require employers to make reasonable accommodations for employees with a relevant attribute covered by anti-discrimination legislation.

It is likely that some employers are already providing flexibility to this expanded range of employees; either based on their acknowledgement of their obligations under anti-discrimination legislation, or because they are amenable to such arrangements. However, the 2013 Reforms provide a clear statutory basis for employees to initiate a request, if their circumstances fit within the expanded categories. This may have the incidental benefit of reducing resentment or tension at work over who is entitled to request flexibility and the perceived impact on other employees.

Although concerns have been expressed that these measures might have the adverse effect of decreasing the employment prospects of employees in these categories, such discriminatory conduct would in any event be caught under other legislative prohibitions.

Refusal Based on “Reasonable Business Grounds”

The issue of whether a refusal of a request should be appealable has been a contentious issue. A review of the overall operation of the FW Act in 2012 recommended that the status quo be retained, based on the evidence from a survey conducted by Fair Work Australia (as it then was) that showed of the employer respondents:

  • 81 per cent that had received one such request granted it without variation;
  • 8.4 per cent granted the request with variation; and
  • 10.8 per cent refused the request.

Of the respondents that received more than one request:

  • 53 per cent granted all requests without variation;
  • 47.5 per cent granted some or all requests with
  • variation; and
  • 25 per cent were refused.1

However the review panel did recommend that there be a codification of a requirement that the request should only be refused after the employer had held at least one meeting with the employee to discuss the request.

The Flexible Work Scheme (following the 2013 Reforms) adopts a compromise position of seeking to provide further guidance on what constitutes reasonable business grounds, without tying the scheme to any specific procedural steps. The legislation now states that without limiting the concept in any way, “reasonable business grounds” includes circumstances in which:

  1. the new working arrangements requested by the employee would be too costly for the employer;
  2. there is no capacity to change the working arrangements of other employees to accommodate the new working arrangements requested by the employee;
  3. it would be impractical to change the working arrangements of other employees, or recruit new employees, to accommodate the new working arrangements requested by the employee;
  4. the new working arrangements requested by the employee would be likely to result in a significant loss in efficiency or productivity; and
  5. the new working arrangements requested by the employee would be likely to have a significant negative impact on customer service.

The essential nature of the scheme as one built on workplace dialogue, rather than external review, is retained.

The empirical evidence collated to date suggests that under the old eligibility criteria, employers were willing to consider requests for flexible work arrangements, and in many cases grant such requests. Once further empirical evidence becomes available it will be interesting to see whether the expansion of the categories of eligible employees has meant that employers find it more difficult to juggle competing requests for flexibility, and whether this can be resolved with minimal conflict at the workplace level.

Conclusion

The Flexible Work Scheme, particularly since the 2013 Reforms, includes a number of measures that are directed at achieving a “family-friendly” approach to workplace relations. However, the scope of these provisions is much broader than simply that of “family friendly”, particularly when regard is had to the range of employees eligible under the right to request provisions.

These changes also show a greater alignment of the right to request with general obligations that apply under Australian anti-discrimination laws, while maintaining a “light touch” regulatory approach, setting the broad parameters for certain workplace “rights” but leaving their final resolution to dialogue at the workplace level rather than by a determinative process.

Employers can benefit from the greater clarity associated with “reasonable business grounds”, and should be mindful of this and other aspects of the Flexible Work Scheme to ensure that employee requests relating to flexible work arrangements are properly and effectively managed.

Key Takeaways

  1. The FW Act’s flexible work requirements are very broad, covering a wide range of workers, and focussing on a “family friendly” approach.
  2. Employers can reject flexible work requests on the basis of “reasonable business grounds”.
  3. The FW Act now provides greater guidance as to what may constitute a “reasonable business ground”.

1. Towards more productive and equitable workplaces; An evaluation of the Fair Work legislation; 2012, 5.2.6.