This month we analyse the implications of the other key amendments proposed to the Fair Work Act 2009 (Cth) (FW Act) contained in the Fair Work Amendment Bill 2013 (Cth) (Bill), which was introduced to Parliament on 21 March 2013.
Employers need to be aware: the Bill expands the entitlements of employees and unions (ostensibly at the expense of employers) including the right to request flexible work arrangements, union right of entry, hours of work and rosters award penalty rates and parental leave.
More rights for employees and unions
Flexible working arrangements
Currently, parents have a right to request flexible work arrangements until their child reaches school age (or 18 years of age if the child has a disability).
The Bill proposes to extend access to the right to request flexible working arrangements to include situations where:
- the employee is a carer (within the meaning of the CarerRecognition Act 2010);
- the employee has a disability;
- the employee is 55 or older;
- the employee is experiencing violence from a family member; and
- the employee provides care or support to an immediate family or household member, who requires care or support because the member is experiencing violence from another family member.
These changes will impose an increased regulatory burden on employers to respond to and assess requests for flexible working arrangements in accordance with the procedures in the FW Act, and if not handled well lead to an increase in disputation.
Refusing flexible working arrangements
The Bill provides a list of what might constitute ‘reasonable business grounds’ for refusing a request for flexible working arrangements. This includes:
- that the new working arrangements requested by the employee would be too costly for the employer;
- that there is no capacity to change the working arrangements of other employees to accommodate the new working arrangements requested by the employee;
- 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;
- that the new working arrangements requested by the employee would be likely to result in a significant loss in efficiency or productivity; and
- that the new working arrangements requested by the employee would be likely to have a significant negative impact on customer service.
This proposed statutory guidance on what constitutes reasonable business grounds for refusing a request for flexible working arrangements may help offset the potential imposition of red tape on employers in responding to requests for flexible working arrangements.
New consultation requirements
The Bill proposes to amend the FW Act to require modern awards and enterprise agreements to include a new clause requiring employers to consult with employees about changes to regular rosters or ordinary hours of work.
The proposed amendment requires employers to genuinely consult employees about changes to an employee’s regular roster or ordinary hours of work and consider the impact of the change in relation to the employee’s family and caring arrangements.
Arguably, the requirement for an employer to consult with an employee regarding changes to an employee’s ordinary hours of work is already covered by the model consultation clause in all modern awards, which requires consultation regarding major workplace change.
In addition, the FW Act currently requires that all enterprise agreements include a consultation clause which requires the employer to consult with employees and their representatives about major workplace changes that are likely to have a significant effect on the employees.
Therefore, this proposed amendment to introduce further consultation requirements appears to be another unnecessary boon for employees which will increase the regulatory burden on employers and either directly or indirectly lead to an increase in disputation.
Right of entry
The Bill proposes to amend the Right of Entry provisions in the FW Act to:
- provide for interviews and discussions to be held in rooms/areas agreed to between the employer and the Right of Entry permit holder (permit holder), or in the absence of agreement, in any room/area in which one or more employees who may be interviewed or participate in the discussions ordinarily take meal breaks;
- give the Fair Work Commission (FWC) capacity to deal with disputes about the frequency of Right of Entry visits by permit holders to workplaces for discussion purposes; and
- facilitate, where agreement cannot be reached, accommodation and transport arrangements for permit holders in remote areas and to provide for limits on the amounts that an employer can charge a permit holder under such arrangements for cost recovery.
The proposed amendment regarding the meeting location represents a constraint on the primacy of the employer’s right to select the location of a workplace meeting, subject only to it being reasonable. The proposed amendment provides no incentive for unions to enter into sensible discussions with employers about a reasonable location.
In addition, this proposed amendment sets the default meeting location as the workplace meal room or area, which means that all employees, including those who are not union members and those who do not wish to participate in union discussions, will have to tolerate such activities.
The proposed statutory test in the Bill will require employers to explain how the frequency of visits by the permit holder would be an unreasonable diversion of the employer’s critical resources, which will place an onerous evidentiary burden on the employer.
Further, the proposed amendment to require employers to provide accommodation and transport to union officials in remote locations (for the purpose of conducting interviews and holding discussions with employees) unfairly favours the union. The default position is that employers are responsible for the cost of the accommodation and/or transport for the union. This removes any incentive for the permit holder to negotiate a sensible accommodation and/transport arrangement which suits all parties, including the employer.
In a major development, the Bill extends the existing entitlement for a pregnant employee to transfer to a safe job regardless of whether she has, or will have, an entitlement to unpaid parental leave. Currently, an employee is only entitled to transfer to a safe job if they are entitled to unpaid parental leave.
The effect of this proposed amendment is that the entitlement to be transferred to an appropriate safe job applies to any pregnant employee, regardless of the period of service that the employee has worked. For instance, an employee with only one month’s service with the employer who is pregnant would be entitled to transfer to a safe job or commence unpaid ‘no safe job’ leave.
Employers in industries where the nature of the work may not be safe for pregnant employees will need to devise a plan to manage any such changes.
The Bill also proposes to amend the concurrent leave provisions of the FW Act to increase the maximum period of concurrent leave available under the unpaid parental leave provisions from three weeks to eight weeks.
The proposed amendments will also allow parents to choose when to take concurrent leave, by enabling the eight weeks’ leave to be taken in separate periods (of at least two weeks, or a shorter period if agreed by the employer) at any time within the first 12 months of the birth or adoption of a child. This would expand employees’ entitlements to take unpaid parental leave concurrently by members of an employee couple.
How should employers prepare for these proposed changes?
As a result of the proposed changes, there is likely to be an increased regulatory burden for employers with practical implications for engaging with the workforce in order to avoid an increase in disputation, if the Bill is enacted.
Employers should consider their existing practices and prepare for these proposed changes now, by:
- establishing a procedure in line with the FW Act requirements for reviewing requests for flexible working arrangements and considering genuine operational reasons for not accommodating such requests, so that you will readily comply with the increased red tape if the Bill is enacted;
- ensuring your managers maintain effective communication and consultation with employees during a restructure or significant workplace change;
- discussing with your managers now where union meetings can happen in the workplace and how these areas can be shown to be reasonable, so that managers are ready to negotiate with union representatives if the Bill is enacted;
- training your managers to be ready to evidence how your critical resources are being unreasonably diverted if union visits for discussion purposes are excessive, so that you will be better placed to lodge a dispute with the FWC;
- establishing an internal policy for accommodating and transporting union representatives in remote locations. Include details of the cost price for such accommodation and transport in the policy, so that you can substantiate cost recovery if you are required to provide accommodation and transport to union representatives if the Bill is enacted; and
- establishing a policy on ensuring the safety and wellbeing of pregnant workers and training your managers to implement this policy.