Requests by employees for flexible working arrangements have become more and more popular since the introduction of this right as part of the National Employment Standards. Traditionally, such requests were most common amongst working mothers and employees with carer responsibilities. Nowadays it is common for all types of employees to utilise flexible working arrangements for a variety of different reasons. In our experience, many employers are more than willing to consider and, where they are able to do so, accommodate requests for flexible working arrangements. In some cases, however, the operational demands of the business simply do not permit an employer to agree to such requests. In these circumstances, an employer can refuse a request for flexible working arrangements on reasonable business grounds. In this week’s alert, we examine the formal requirements under the Fair Work Act 2009 (Cth) (“FW Act”) to deal with a request for flexible working arrangements and the potential risks of declining a proper request without proper reasons.
In order to understand the required decision-making process employers should follow when determining a request for flexible working arrangements, it is imperative to note that such requests may cover an array of employment matters, including but not limited to:
- hours of work (e.g. changes to start and finish times);
- move from full time to part-time work;
- patterns of work (e.g. split shifts or job sharing); or
- locations of work (e.g. working from home).
Employees who have been employed with the same employer on a continuous basis for at least 12 months are eligible to make a request for flexible working arrangements provided that they:
- are the parent, or have responsibility for the care, of a child who is school aged or younger;
- are a carer (under the Carer Recognition Act 2010);
- have a disability (and are qualified for a disability support pension under the Social Security Act 1991);
- are over 54 years of age;
- are experiencing family or domestic violence; or
- provide care or support to a member of their household or immediate family who requires care and support because of family or domestic violence.
Notably, casual employees who have been working for the same employer for at least 12 months can make a request for flexible working arrangement where they have worked “regularly and systematically” over the relevant period, and have a reasonable expectation of continuing work with the employer on a regular and systematic basis.
If an employee is eligible to request flexible working arrangements, they are required under the FW Act to make any such request in writing and to set out the details and reasons for the changes requested. An employer in receipt of a request for flexible working arrangements must provide a written response to the employee within 21 days, stating whether the request is approved or refused. Employers may refuse a request only on “reasonable business grounds”, and in accordance with section 65(5) of the FW Act, are required to provide written reasons for the refusal.
There is currently no definition of “reasonable business grounds” for the purposes of refusing a request in the FW Act. However, the explanatory memorandum to the FW Act provides the following examples of what may constitute a reasonable basis for refusal:
- the effect on the workplace and the employer’s business of approving the request, including the financial impact of doing so and the impact on efficiency, productivity and customer service;
- the inability to organise work among existing staff; and
- the inability to recruit a replacement employee or the practicality or otherwise of the arrangements that may need to be put in place to accommodate the employee’s request.
Importantly, there is no general internal enforcement or appeal mechanism for employees to challenge a refusal of a request for flexible working arrangements. Section 44 of the FW Act specifies that no civil remedy is available where the employer’s refusal is based on reasonable business grounds. However, employees who seek to challenge the decision of their employer, can apply to the Fair Work Commission to deal with a dispute in circumstances where:
- the employer and the employee have agreed in a contract of employment, enterprise agreement or other written agreement for the Commission to deal with a dispute in relation to their employment; or
- the terms of an applicable enterprise agreement have the same (or substantially the same) effect as section 65(5) of the FW Act in relation to the operation of flexible working arrangements.
Whilst there may be limited circumstances in which an employee can challenge their employer’s decision to refuse a request for flexible working arrangements, by seeking redress from the Fair Work Commission, the employee may be able to commence other proceedings including:
- a discrimination claim under either State or Federal jurisdiction; or
- a claim for breach of the General Protection provisions of the FW Act.
It is therefore essential that employers have a valid and reasonable basis on which to decline such a request. It is important that employers keep appropriate documentation of the decision making process, particularly where they decline a request. Amongst other things, an employee may seek to claim that the refusal of a request for flexible working arrangements was in some way connected to the exercise of a workplace right, that is, the right to make the request in the first place (or other exercise by the employee of a workplace right), or that the employer’s decision amounts to a breach of anti-discrimination legislation on the basis that the denial of the request was not based on reasonable business grounds. The employee may seek to argue that the refusal of the request was actually based on discriminatory grounds protected at law. In order to defeat such claims, an employer would be greatly assisted if it could rely on clear and carefully written documentation setting out the decision-making process undertaken in responding to the employee’s request for flexible working arrangements.
In light of the above, employers should only consider refusing a request for flexible working arrangements where they have genuine and legitimate operational reasons for doing so. In responding to an employee’s request, employers must ensure that they comply with the formal procedural requirements contained in the FW Act, any applicable enterprise agreement, and the protocols of any policy which apply in relation to workplace flexibility.
We regularly advise employers on workplace flexibility matters including dealing with requests for flexible working arrangements. If you wish to discuss any aspect of this article or require specialist advice or assistance in relation to an employment law issue, please do not hesitate to contact us.
This alert is not intended to constitute, and should not be treated as, legal advice.