Is your business ready for flexible working arrangements to change?May 8, 2023
The recent passing of the Secure Jobs, Better Pay Bill amended the Fair Work Act 2009 (Cth) (‘FW Act’) broadening employees’ ability to request flexible working arrangements from their employers. These changes come into place from 6 June 2023, and it’s crucial that businesses of all shapes and sizes understand them inside out.
In this article, we outline the most up-to-date advice on who can make requests, as well as how and when you should respond.
Who can make a request for a flexible working arrangement?
Employees will not be entitled to make a request for a flexible working arrangement until they have completed twelve months of continuous service, excluding periods of unpaid leave. For casual employees, the twelve months’ employment must be on a regular and systematic basis, with a reasonable expectation of this continuing.
The circumstances in which an employee may request a flexible working arrangement are limited to where they:
- have responsibility for the care of a child who is school age or younger;
- are pregnant;
- are a carer;
- have a disability;
- are 55 or older;
- are experiencing violence from a member of their family; or
- provide care or support to a member of their immediate family or household who is experiencing family or domestic violence.
How do I respond to a request?
From 6 June 2023, employers will have new obligations they must meet before refusing a request from an employer for a flexible working arrangement. The new requirements will shortly be implemented in the FW Act, which will make the process for responding to requests for flexible work consistent with the provisions in modern awards.
If you receive a request for a flexible working arrangement, you must provide a response to your employee within 21 days of receipt of the request. The response must state whether the employer has granted or refused the employee’s request.
An employer can only refuse a request if it has:
- discussed the request with the employee; and
- made a genuine effort to find alternative arrangements to accommodate the employee’s circumstances; and
- considered the consequences of refusal on the employee; and
- the refusal is on reasonable business grounds.
If an employer is unable to accept an employer’s flexible working request, it is a requirement that an employer then explore with the employee other alternative arrangements which may meet their needs in relation to their flexible working request. For example, if you could offer reduced hours but in a different role or at another location, you are required to discuss this alternative with the employee and include the full details of this in the response.
If the employer refuses the employee’s request, the written response must:
- include details of the refusal; and
- set out the particular business ground(s) for refusing the request; and
- explain how the business ground(s) apply to the request; and
- either set out alternative changes the employer is willing to make which would accommodate the employee’s circumstances, or state that there are no such changes.
Reasonable business grounds
As mentioned above, an employer is only able to refuse an employee’s flexible working request on reasonable business grounds. Reasonable business grounds include:
- the requested working arrangements would be too costly for the employer to implement;
- there is no capacity to change the working arrangements of other employees to accommodate the request;
- it would be impractical to change the working arrangements of other employees, or recruit new employees, to accommodate the request;
- the requested working arrangements would be likely to result in a significant loss in efficiency or productivity; or
- the requested working arrangements would be likely to have a significant negative impact on customer service.
If an employer does refuse an employee’s flexible working request for any of the above mentioned reasonable business grounds, it is not enough that the letter simply states the relevant ground for refusal. You must also detail the reason why you are relying on the business ground. For example, if you are unable to accept an employee’s flexible working request because the new working arrangement requested would be too costly for you, you need to explain why this would be the case. If the employee making the request wants to finish two hours earlier each day, and you need to fill those two hours, it would be too costly if the industrial instrument governing the employment provides that employees are required to work a minimum of three hours per shift. If you can simply hire another employee to cover the days your employee has requested not to work, this will not create an additional cost to your business. However, if it is the case that you would be unable to hire an employee purely to cover three hours on a Friday (if it is the case your employee has requested to work half days on Friday), it may be impractical to hire the new employee. These precise reasons need to be explored in the letter you provide your employee.
From 6 June 2023, the Fair Work Commission (FWC) will have the power to hear disputes in relation to an employer’s refusal of a flexible working request. The FWC will first attempt to resolve the dispute through mediation or conciliation. If an agreement can’t be reached through this process, the FWC will have extended powers to arbitrate and make orders in relation to flexible working arrangements.
The FWC will have the ability to make a range of orders, depending on the circumstances. If the FWC is satisfied that the employer has not responded adequately, they may make an order compelling them to do so. This would be in addition to potential civil penalty for breaching the FW Act.
If the FWC is satisfied that there is no reasonable prospect of the dispute being resolved without an intervention, they may seek to resolve it themselves. This could involve making an order granting the original request or making other specified changes to working arrangements to accommodate the employee’s circumstances.
Depending on an employer’s reason for refusing the request, discrimination legislation may become relevant, including discrimination and General Protections provisions under the FW Act. This stresses the importance of handling such a request with the appropriate delicacy it requires.
If this information has raised any further questions, or you have another matter you need advice on, please reach out to the team at FCB for a confidential discussion. You can call us on 02 9922 5188 or email us at email@example.com .