As we adapted to changing work dynamics in recent years, Australia took significant steps to enhance flexible work arrangements empowering employees seeking flexible arrangements. The Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 introduces crucial amendments to requests for flexible work arrangements. These changes have introduced added complexity to reviewing requests, particularly where employers may be unable to accommodate flexible work arrangements.

Furthermore, in the second half of 2023, the Australian media reported home employers were actively encouraging, or in some cases, mandating, more employees to return to the office or physical place of work. This was reiterated in research completed by AHRI, where one of the major conclusions was that there has been a significant uplift in the share of employers that are mandating their employees to be in the office or their physical place of work for between 3 and 5 days a week. With these changing expectations, not surprisingly, our clients are seeing an increase in formal flexible work requests. 

Let’s explore what these changes mean for employers and the potential pitfalls.

 

Key Amendments in 2023

Expanded Eligibility:

• Employees who have worked with the same employer for at least 12 months now have a legal entitlement to request flexible working arrangements.
• Eligible employees include parents of school-aged children, carers, persons with disabilities, those aged 55 or older, and individuals experiencing family or domestic violence, and during pregnancy.

Employer Obligations:

• Employers must genuinely consider and discuss employee requests for flexible arrangements.
• If refusing a request, employers must provide detailed reasons for the decision.
• Failure to respond appropriately within 21 days can lead to disputes.

Dispute Resolution:

• The Fair Work Commission (FWC) now has broad powers to resolve disputes arising from refusals or non-responses to requests.

This means, where previously there wasn’t a capacity for the Fair Work Commission to unilaterally decide when it came to disputes regarding flexible working arrangements, the Commission now has that power where the parties are unable to resolve the dispute through conciliation and mediation.

A failure to embrace flexible arrangements may lead not only to reduced job satisfaction, absenteeism and the loss of valuable talent, but may now also result in more significant legal consequences through the new dispute mechanism available to employees.

 

What these changes mean for employers

When approached with a request, the employer should demonstrate a genuine willingness to reach an agreement with the employee. It’s a matter of being receptive to the ‘why’ and thinking creatively about alternatives with respect to the personal circumstances that the employee raises as the basis for the request.

Employers will need to carefully weigh up the personal circumstances that form the basis of the request against the extent of the cost and impact on the business of allowing the request. This includes:

• the effect that approving the request would have on the workplace and the employer’s business, including the financial impact 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.

It is important to remember that the onus is squarely on the employer to demonstrate that it had reasonable business grounds to reject a flexible work arrangement request – Those grounds for refusal must be clearly articulated and have a sound and objective basis. Ideally this should be supported by data which may include stakeholder feedback.

 

The potential pitfalls

Failing to provide a written response within 21 days.

The failure to provide a written response to a request within 21 days is a common pitfall. Whether that be a matter of timeliness, or the arrangement being implemented without a written response confirming approval. If a written response is not provided, the intention of the legislation is to view this as though the request has been refused and the dispute mechanism is available to the employee. As the legislation is tested, it will be interesting to see whether employees use this avenue to provide future certainty to an arrangement that may already be in place without written approval, and employers may find themselves at risk of facing an unnecessary claim.

Taking a one-size fits all approach.

Another common pitfall is to take a one-size fits all approach. It is also important to remember that each employees’ personal circumstances are different.  While it may be reasonable, for example, that specific duties require a particular role to be present in the office, alternative role design could also be considered to determine whether those duties could be completed across two roles. Or, further, whether flexible hours and a job share arrangement may suit both the needs of the employee and the employer. While the new laws only apply to certain groups of employees, it is best practice to consider the individual needs of any employee, and the capacity of the business to accommodate them should always be considered. This practice would assist in demonstrating an employer’s receptiveness to flexible work request and a willingness to accommodate them. This could well be viewed favourably by the Fair Work Commission should an employer find themselves facing a dispute.

Promoting flexibility as a reward.

Another pitfall would be promoting a culture of flexibility as a reward. As consultants, we often hear employers refer to flexibility as a “quid pro quo”. While it is understandable for poor performance to be a consideration when reviewing a request, it is important to remember employers have the right to request a flexible work arrangement. While there may be the necessity of monitoring, training and oversight for an employee undergoing performance management, that right is available irrespective of their performance, and reasonable business grounds are required for the basis of any refusal. Flexible work requests should be considered the context of what is best for the employee’s wellbeing and what works for the business.

Failing to take a collaborative approach.

Another pitfall is the failure to take a collaborative approach. It is necessary to discuss with the employee, the considerations of why an arrangement may not work for this business and presenting alternatives that may be suitable to the employee. It is therefore important not to provide lip service or assume a tick-and-flick approach when refusing an employee’s request. Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 requires that it is specifically explained how reasonable grounds for refusal apply to the request and, where possible, set out proposed changes if they can be made to any extent.

With the nuances of the legislation and the potential pitfalls, it is essential the people who are responsible for making decisions about these matters have training about how they’re supposed to respond – in particular, the need for consultation and flexibility. This is particularly evident in demonstrating reasonable business grounds for denying a flexible work request which depends heavily on the nature of the role and the employee’s unique circumstances. As consultants, we are increasingly seeing our clients looking to us to provide an independent review of their consideration of requests and grounds for refusal.

As with many of the changes brought by the Fair Work Amendment Bill, we will have to wait for the rules to be tested and precedents set to truly know the definition of ‘reasonable grounds’ in the new legislation.

In the meantime, if you need support, please reach out to me, or one of our Azuhr consultants.

 

Amanda Smith

Senior Consultant
Azuhr
+61 432 512 775
[email protected]

 

References:

AHRI Hybrid & Flexible Working Practices in Australian Workplaces in 2023.