Employees have always had rights to request flexible work arrangements under the Fair Work Act. However, changes to the flexible workplace arrangement regime came into effect in June 2023, which not only expanded employees’ rights to make such requests, but also opened the door to refusals being the subject of arbitration in the Fair Work Commission.
Special Counsel Shannon Walker revisits the key changes and the recent applications which the Commission has so far considered in detail under the new regime.
Key changes and new requirements
The previous regime
Previously, an employee could place a written request with their employer, setting out the flexibility requested (such as an earlier start time and earlier finish time), and what grounds allowed by the Fair Work Act 2009 (Cth) (FW Act) justified the request, (for example the employee had parenting or carer responsibilities, or a disability).
The employer was entitled to refuse the request on ‘reasonable business grounds’ and was required to set out in writing to the employee the reason for the refusal within 21 days of the request being made.
The new regime
While the essential elements remain the same, the following changes give employees additional grounds to make a flexible work arrangement request, place greater procedural requirements on employers when responding to such a request and give greater powers to the Fair Work Commission (FWC) to ‘deal with’ a dispute (including arbitration) in the event of a refusal:
- Grounds: Employees now have additional grounds to make a flexible working request, being pregnancy or if the employee (or a member of their immediate family or household) are experiencing family and domestic violence.
- Responsive Procedures: On receiving a flexible work request, and before refusing the request, the employer is obligated to have a discussion with the employee about the request and genuinely try to reach agreement with them on making changes to accommodate their circumstances.
The employer must have real regard to the consequences for the employer if they refuse the request and can only refuse on ‘reasonable business grounds’.
A note has been added to the FW Act to provide that the nature and size of the employer’s enterprise will be relevant considerations in determining what is a reasonable business ground for the particular employer. - FWC Powers: If a flexible work arrangement is refused, the employee may now refer the matter to the FWC to deal with the dispute in a range of ways (including by arbitration). Importantly, the FWC can now make orders for the employer to provide the employee a written response (if they have not done so), determine whether the ‘reasonable business grounds’ are in fact reasonable and even make orders requiring the employer to grant the request.
Recent cases
So far, the FWC has not considered the new provisions in any significant detail, with only three applications thus far being the subject of arbitration.
Earlier this week, in the case of Shane Gration v Bendigo Bank [2024] FWC 717, the FWC published a decision in which it upheld the reasonableness of the employer’s decision to refuse a request.
In this case, the applicant had requested that he be permitted to fully work from home (rather than attend the office 2 days per week, as per the employer’s policy requirement). The request was made on the basis that he is a carer for his wife and school-age daughter in respect of whom he gave evidence that his wife was recovering from a serious foot injury and his daughter was diagnosed with ADHA, requiring uniformity in her daily routine.
A lack of evidence regarding the nature and extent of a ‘serious’ foot injury affecting his wife (coupled with evidence that she was able to undertake 15 ‘high intensity’ yoga sessions each week) did not assist his case. Ultimately, the FWC held that there was insufficient evidence to establish that the applicant’s wife had a ‘disability’ and the FWC concluded that the applicant was not a ‘carer’ (within the meaning of the Carer Recognition Act 2010 (Cth)).
Further, whilst the FWC was satisfied that the applicant did provide care and support for his daughter, the employer’s refusal to agree to a permanent (‘100%’) work from home arrangement was found to have been made on reasonable business grounds, having regard to the reasonableness and flexibility demonstrated by the employer in considering and responding to the applicant’s request, as well as the employer having been ‘very accommodating’ in respect of the applicant’s needs for an extended period.
The case of Jordan Quirke v BSR Australia Ltd [2023] FWCFB 209 is helpful in guiding employers on threshold issues in relation to a request.
In this matter, Ms Jordan Quirke lodged an application for the FWC to deal with a dispute relating to BSR Australia Ltd refusing her request for flexible working arrangements.
The dispute related to her written request made to her employer on 21 April 2023, requesting her part time hours be changed. In the FWC application, she cited that the reason for the request for flexible working arrangements was because she had a disability (citing anxiety, depression and insomnia) and that the employer had refused her request on 30 August 2023.
The FWC carefully scrutinised the evidence provided by Ms Quirke noting that she was not eligible to make the application because:
- At the time of making the request she did not have 12 months of continuous service;
- The written request sent to the employer did not set out any of the required ‘circumstances’ detailed in the FW Act (pregnancy, disability, parent, etc) as she failed to disclose that she had a disability in the initial written request. The FWC also remarked that while the applicant believed she suffered from a psychological disability, she provided no medical evidence of such a diagnosis;
- The request was made before 6 June 2023, meaning the FWC did not (at that time) have jurisdiction to deal with a dispute involving a request for flexible working arrangements.
The FWC ultimately dismissed the matter on the basis that Ms Quirke had not made a request under section 65(1), and it therefore had no jurisdiction to arbitrate the matter.
Due to this conclusion, the FWC found it unnecessary to consider whether the employer’s refusal of Ms Quirke’s request for flexible working arrangements was on reasonable business grounds.
Although this case didn’t get the opportunity to provide us with insight as to the practical application of the FWC’s ability to deal with a dispute regarding a request for flexible working arrangements, it explores the strict eligibility requirements an employee must satisfy for an employer’s refusal to be reviewed by the FWC.
The practical implications
Moving forward, employers who receive a flexible work arrangement request must always first consider if the employee is eligible to make such a request. To make a request, employees must be a ‘national system employee’ and satisfy the continuous service requirement (12 months for permanent employees).
The employer must then look to whether any of the circumstances listed in section 65(1)(a) of the FW Act apply to the employee, including the updated circumstances of pregnancy and family or domestic violence.
Next the employer must turn their attention to whether the request made by the employee is in writing and sets out:
- the proposed changes to the working arrangements; and
- the circumstances that form the basis of the request,
as required by section 65(1)(a) of the FW Act.
Once the employer receives the flexible working request, they must respond to the request within 21 days notifying the employee of their decision to grant the request, amend the request or refuse the request.
An employer may only amend or refuse the request where they have first discussed the request with the employee and genuinely tried to reach an agreement to accommodate the employee’s circumstances, if that amendment/refusal was made on reasonable business grounds.
Reasonable business grounds for refusing requests are outlined in section 65(A)(5) of the FW Act and include circumstances where it would be too costly or impractical to accommodate the request.
A failure to respond within the time frame will be taken as a refusal of the request and allow the employee to proceed to the FWC.
If the employer refuses to grant the request, the employer must provide the employee with a written response setting out the reasons for the refusal detailing the particular business ground for refusing the request and explain how the business ground is relevant to the request. The written response must also either set out the changes the employer is willing to make to the employees working arrangement or state that there are no changes to the employees working arrangement that they are willing to make.
Finally, the Gration decision highlights the FWC’s willingness to accept an employer’s requirement for face-to-face attendance at the workplace. This includes for (oft-cited) reasons (including spontaneous collaboration, nuanced discussions, brainstorming, mentorship and development for other staff members, as well as attendances at ‘moments that matter’). In cases where the employer can clearly demonstrate how it has considered and attempted to accommodate the employee’s particular circumstances this will assist in establishing reasonable business grounds
Key Takeaways
Given the FWC now has powers to arbitrate a decision to refuse a flexible working arrangement, businesses should review what systems and process they have in place for receiving, reviewing and determining any such request, and ensure that in doing so, that they balance the needs of each of the parties.
People managers and supervisors should be trained to ensure they recognise what a flexible work arrangement request is, and the importance of genuinely considering and consulting with an employee on the request before implementing a decision.
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The views expressed in this article are general in nature only and do not constitute legal advice.
Please do not hesitate to contact us if you require specific advice tailored to the needs of your organisation in relation to the implications of these changes for your organisation.