Change is coming – consultation and requests for flexible work arrangements
Significant changes to most employees’ ability to request flexible work arrangements have just taken effect. Employers affected by the changes need to be aware of their new obligations and ready to respond to such requests in a lawful manner, to avoid being exposed to employee claims that they have breached their obligation to consult about such a request. Read on for more details and our practical tips for compliance.
Who has the right to request?
Permanent employees with at least 12 months continuous service, and regular and systematic casuals with an expectation to ongoing work, have the right to make a request for flexible working arrangements pursuant to section 65 of the Fair Work Act 2009 (Cth) (FW Act). This right is part of the National Employment Standards (NES).
Section 65 of the FW Act provides the right in the following circumstances:
a) the employee is the parent, or has responsibility for the care, of a child who is of school age or younger;
b) the employee is a carer (within the meaning of the Carer Recognition Act 2010);
c) the employee has a disability;
d) the employee is 55 or older;
e) the employee is experiencing violence from a member of the employee’s family; or
f) the employee 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.
While employees have the right to request flexible working arrangements, employers also have the right to refuse such requests on reasonable business grounds. Reasonable business grounds, without limitation, include:
a) that the new working arrangements requested by the employee would be too costly for the employer;
b) that there is no capacity to change the working arrangements of other employees to accommodate the new working arrangements requested by the employee;
c) that 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;
d) that the new working arrangements requested by the employee would be likely to result in a significant loss in efficiency or productivity;
e) that the new working arrangements requested by the employee would be likely to have a significant negative impact on customer service.
Whether an employer accepts or refuses a request, a written response must be provided to the employee within 21 days. Currently, the NES provides no right for an employee to challenge a refusal or bring a claim in a relevant court or tribunal for breach of the NES.
What are the changes?
As part of its four-yearly review of modern awards, the Full Bench of the Fair Work Commission has handed down a series of decisions in consideration of family friendly work arrangements. As a result, from 1 December 2018, a model term, as set out at the end of this article, is included in all modern awards. The term will supplement section 65 of the FW Act and the NES in respect to requests for flexible work arrangements.
The essential changes of which employers need to be aware include:
a) before responding to a request in writing, an employer must discuss the request with the employee. Both parties must genuinely try to reach agreement on change in working arrangements having regard to:
i. the needs of the employee arising from their circumstances;
ii. the consequences for the employee if the changes in working arrangements are not made; and
iii. any reasonable business grounds for refusing the request.
Following consultation with the employee, an employer must then respond in writing within the 21-day time limitation. If an employer refuses a request and cannot reach an agreement with the employee through consultation, then the employer must provide the following in its written response:
a) detailed reasons for the refusal, including the business ground or grounds for refusal and how the ground or grounds apply;
b) if the employer and employee could not agree on a change in working arrangements through consultation the written response must:
i. state whether there are any changes in working arrangements that the employer can offer the employee so as to better accommodate the employee’s circumstances; and
ii. if the employer can offer the employee such changes in working arrangements, set out those changes.
If the employer and employee have, through consultation, reached an agreement that differs from the original request, the employer must set out that agreement in writing and provide it to the employee.
How does this affect employers?
The main change is the requirement to consult and discuss the request with employees. A request can no longer be dealt with by simply responding in writing.
There are still no grounds for an employee to dispute the reasonable business grounds upon which an employer relies – that is, an employee cannot challenge a decision not to grant the request. However, importantly, the changes provide grounds for an employee to dispute whether the employer consulted with them and/or responded to their request in accordance with the model clause.
It appears such disputes will be dealt with under the relevant dispute resolution clause in the applicable modern award, this effectively now gives the Fair Work Commission and other relevant courts and tribunals the power to determine such dispute.
Practical tips for employers
In light of the ability for an employee to now dispute the consultation process, employers need to ensure they have a clear policy and procedure for consultation. The existence of such a policy and procedure will help mitigate not only claims alleging a failure to consult, but also allegations of discrimination and/or adverse treatment.
At a minimum, employers should have a procedure in place which provides for the following:
- process for consultation;
- process for consideration;
- how a final decision will be made and who will make it;
- communication of business needs and requirements; and
- communicate of the reasons for the decision.
Given the impending changes and the imminent arrival of the new year, it is a good time for employers to ensure that policies and procedures are compliant with the FW Act and applicable modern awards. It is also vital to ensure management are equipped to meaningfully consult and consider flexible work requests received from employees.