The National Employment Standards in the Fair Work Act 2009 (Cth) ("FW Act") provide employees, who are parents or have responsibility for the care of a child under school age or under the age of 18 with a disability, with a right to request a change in working arrangements (for example, a change to their working hours, patterns of work and/or work location).
Employers can refuse a request for flexible working arrangements when they have real and specific operational reasons for doing so. However, they must document their decision-making process to show they have undertaken a genuine review of the request.
A request for flexible working arrangements must be made in writing by the employee, setting out the details and reasons for the change.
The employer must provide a written response within 21 days, stating whether the request is approved or refused. Employers may only refuse a request on 'reasonable business grounds' under section 65(5) of the FW Act. They must provide their reasons for the refusal.
Right to challenge an employer's refusal of a request
Importantly, there is no general enforcement mechanism for employees to challenge their employer's refusal. Section 44 of the FW Act specifies that no civil remedy is available where the employer's refusal is not based on reasonable business grounds.
Employees can seek to challenge their employer's refusal of a request. They can apply for Fair Work Australia ("FWA") to deal with that dispute in the following circumstances:
- the employer and the employee have agreed in a contract of employment, enterprise agreement or other written agreement to FWA dealing with a dispute in relation to such matters; or
- the terms of an applicable enterprise agreement has the same (or substantially the same) effect as section 65(5) of the FW Act.
Meaning of 'reasonable business grounds'
There is currently no definition of 'reasonable business grounds' for refusal of a request in the FW Act. The Explanatory Memorandum to the FW Act provides the following examples of what may contribute to a 'reasonable business ground':
- the effect on the workplace and the employer’s business of approving the request, including the financial impact of doing so 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.
As part of its recent review of the operation of the FW Act, the right to request flexible working arrangements was one of the key areas on which the three-member review panel ("Panel") assessed and made recommendations. For a full snapshot of the key recommendations that emerged from the Panel's review of the FW Act, see our previous article "Review of the Fair Work Act released yesterday".
The Panel was not persuaded by arguments provided in submissions from interested parties that a definition of ‘reasonable business grounds’ should be included in the FW Act. The Panel stressed that the government’s clear intention is that ‘the reasonableness of the grounds is to be assessed in the circumstances that apply when the request is made’, but suggested that it may be appropriate to gain further guidance from FWA.
Until FWA provides such guidance, employers will need to look to case law to help understand what the reasonable business grounds are for refusing a request. A recent decision by FWA sheds some light on this issue.
In AMWU v Mildura Rural City Council  FWA 4308, the applicant, a single parent, sought to enter into an individual flexibility arrangement with the Council to move his standard start and finish working times back one hour for up to 12 months, so that he could take his son to school until he found a suitable before-school care arrangement. The Council refused the request for operational and occupational health and safety reasons.
The applicant was able to challenge the Council's refusal because his right to request flexible working arrangements arose under the terms of an enterprise agreement. That agreement specifically allowed him to apply for FWA to deal with the dispute.
While FWA found that the applicant's request was genuine, FWA was satisfied that the Council's grounds for refusal were reasonable taking into account these factors:
- the Council made its decision after a close examination of the following operational issues that would arise if the applicant's request was approved:
- special arrangements would need to be made to transport the applicant to the required work sites before and after work;
- the applicant would be working alone for the last hour of each work day without adequate supervision or staff support in the event of an incident or machine breakdown; and
- the applicant would miss weekly toolbox meetings which usually dealt with administrative and other occupational health and safety matters; and
- the Council had a practice of supporting flexible working arrangements, having previously approved 34 requests and only having declined two requests in the past.
This FWA decision highlights the importance for employers of properly considering an employee's request for flexible working arrangements in light of the business operational needs. Employers should keep appropriate documentation of its decision making process, particularly where they decline a request.
Potential remedies under anti-discrimination legislation
Employees may also be able to seek remedies under other federal or state laws such as anti-discrimination legislation which prohibits unlawful discrimination on the ground of family or carer's responsibilities.
For example, the Equal Opportunity Act 2010 (Vic) ("Vic Act") provides Victorian employees who are parents/carers with a statutory right to pursue flexible working arrangements. It states that '[a]n employer must not, in relation to the work arrangements of an employee, unreasonably refuse to accommodate the responsibilities that the employee has as a parent or carer'. If an employer unreasonably rejects a request made by a Victorian employee, the employee can issue proceedings seeking orders including:
- the employer to refrain from committing any further contravention;
- payment to the applicant of an amount the tribunal thinks fit to compensate; and
- compensation for loss, damage or injury suffered in consequence of the contravention.
While the Anti-Discrimination Act 1977 (NSW) ("NSW Act") does not provide New South Wales employees who are parents/carers with the same statutory right topursue flexible working arrangements as that provided to Victorian employees under the Vic Act, it does specifically prohibit discrimination on the ground of an employee’s responsibilities as a carer.
An employer's refusal of a request for flexible working arrangement made by a New South Wales employee may be considered unlawful discrimination under the NSW Act. This is when the employer does not have operational reasons for doing so and when accommodating the request would not cause the employer any unjustifiable hardship. In those circumstances, the employee can make a complaint to the NSW Anti-Discrimination Board.
What does this mean for employers?
Despite employees not having a general right to challenge their employer's refusal of their request under the FW Act, employers must take care in dealing with such requests. Employees may have a right to challenge their decision if requesting flexible working arrangements arises from the terms of an enterprise agreement, employment contract or some other written agreement or policy. Employees may also be able to bring a claim under federal or state anti-discrimination laws.
In light of the above, employers should only consider refusing a request for flexible working arrangements where they have real and specific operational reasons for doing so.
In responding to an employee's request, employers must ensure that they comply with the formal requirements contained in the FW Act, any applicable enterprise agreement, and the terms of any policy which they have in relation to workplace flexibility.
Having a history of supporting flexible working arrangements will also support the view that the employer has a good practice of reviewing requests based on genuine operational reasons, rather than artificial or capricious reasons.