The Fair Work Commission (FWC) has found an employer's continuing unreasonable refusal of an employee's request to work part-time was "inimical" conduct constituting constructive dismissal.

Implications for employers

This decision reminds employers of their obligations to:

  • be aware of an employee's right to request flexible working arrangements in any applicable enterprise bargaining agreement and the National Employment Standards (NES);
  • fully explore flexible working arrangements if requested to do so; and
  • ensure the reasonable business grounds upon which they refuse a request to work part-time are documented and will stand up to the scrutiny of the FWC.

The decision comes at a time when the right to request flexible working arrangements are in the spotlight. The Fair Work Amendment Act 2013 (Amendment Act), assented to on 28 June 2013, extends the right to request flexible working arrangements, including to parents of children who are of school age. Under the NES, an employer may only refuse a request for a change in working arrangements on reasonable business grounds. The Amendment Act sets out a non-exhaustive list of what may constitute reasonable business grounds.

The Fair Work Act 2009 (FW Act) does not provide a specific remedy for unreasonably refusing a request for flexible working arrangements. This case suggests that a continuing unreasonable refusal may amount to constructive dismissal, and therefore opens the door to other possible remedies under the FW Act.

Background: legislation

Under section 365 of the FW Act a person may apply to the FWC to deal with a dispute if the person has been dismissed and the person alleges they have been dismissed in contravention of the general protection provisions of the FW Act.

Section 386(1) of the FW Act provides that a person has been dismissed if:

  • "the person's employment with his or her employer has been terminated on the employer's initiative; or
  • the person has resigned from his or her employment, but was forced to do so because of conduct, or a course of conduct, engaged in by his or her employer". 

Background: facts

Ms Rind was employed by the Australian Institute of Superannuation Trustees (AIST) as a Database/IT Systems Administrator. She commenced employment on a full time basis but performed work from home one day per week after the birth of her first child.

Ms Rind was covered by the Australian Institute of Superannuation Trustees Certified Agreement 2009 (Agreement). Relevantly, under the Agreement:

  • clause 21.1.1 provides that employees are entitled "to work part-time in connection with the birth or adoption of a child";
  • clause 21.6.1(c) provides that an employee may request AIST to allow the employee "to return from a period of parental leave on a part-time basis until the child reaches school age"; and
  • clause 21.6.2 provides that AIST.

shall consider the request having regard to the employee's circumstances and, provided the request is genuinely based on the employee's parental responsibilities, may only refuse the request on reasonable grounds related to the effect on the workplace or [AIST's] business.

Ms Rind initially discussed with AIST a three-month gradual return to work, with a possible return to full time work in late January 2013. She later formally requested to work one day a week in November, two days a week in December and three days a week in January.

AIST refused Ms Rind's request for a number of reasons, including the following:

  • the need for immediate action to troubleshoot technical issues as they arise;
  • difficulty communicating technical concerns over email leading to staff frustration;
  • the need for a "dedicated resource" for staff to be able to fulfil their roles;
  • the need for a person on site during business hours to work with different departments;
  • the frustration caused to staff when they are unable to schedule impromptu meetings; and
  • testing issues due to remoteness and non-availability of resources at times, resulting in delays to projects

AIST proposed other arrangements which were all either for attendance five days a week or otherwise conditional in nature. One proposal was for a job-share arrangement, under which Ms Rind could return to work part-time, on the condition that AIST was able to find a suitable job-share candidate. The proposals were not accepted by Ms Rind. She did not return to work following the end of her parental leave and instead brought an unfair dismissal claim.

Decision

Commissioner Lewin found in favour of Ms Rind, holding that:

  • there was a presumptive element to clause 21.6 of the Agreement, such that part time work should be available unless there were reasonable grounds upon which it could be refused;
  • refusing Ms Rind's request to work three days per week was not reasonable, because:
  1. since the employment relationship with Ms Rind came to an end, AIST had continued to rely upon externally contracted services for limited hours, and apparently intended to continue doing so for the foreseeable future;
  2. no attempt had been made to recruit a full time replacement for Ms Rind, nor was there any evidence of intention to do so;
  3. the ongoing cost of the external provider was greater than if Ms Rind had returned to work part-time;
  4. Ms Rind's request to work part-time would most likely have provided a greater number of hours than were being provided by the contract service provider; and
  5. Ms Rind's requested arrangement would not have had an adverse impact on customer service, given her experience and the fact she would most likely have provided a greater number of hours of work than the contract service provider;
  • the job-share arrangement proposed by AIST made Ms Rind's return to work conditional on the recruitment of another part-time employee. This was unreasonable and amounted to refusal of Ms Rind's request to work part time;
  • AIST's failure to carry out its obligations under the Agreement was relevant in considering whether or not Ms Rind was constructively dismissed. Ms Rind's right not to have her request to work part-time unreasonably refused was "essential for her continued employment to be viable"; and
  • it was necessary to consider the significance of AIST's conduct viewed from the contemporary vantage point, affording "considerable importance to the ability of women to give birth to children without foreclosing their employment due to the consequences of family formation".

Commissioner Lewin went on to find that Ms Rind had been constructively dismissed, noting that:

  • a constructive dismissal occurs where an employee leaves "their employment in circumstances where conduct of their employer is sufficiently inimical to the continuation of the contract of employment and the employment relationship". Inimical conduct includes conduct which is "adverse, unfriendly or hostile to the contract of employment and the employment relationship"; and
  • AIST had engaged in a course of conduct which:
  1. "justified Ms Rind treating the employment at an end because there was an unreasonable refusal to perform" AIST's obligations under the Agreement; and/or
  2. which forced Ms Rind to resign.

Accordingly, Ms Rind was entitled to bring her unfair dismissal claim.

Rind v Australian Institute of Superannuation Trustees [2013] FWC 3144

Emma Newnham