Navigating flexible working arrangements: how to respond to flexibility requests and the new powers of the Fair Work Commission

The Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (Cth) (Amending Act) has introduced a wide variety of amendments to the Fair Work Act 2009 (Cth) (Act), including changes to requests by employees to work flexibly. These amendments, effective from 6 June 2023, extend the right to request flexibility to additional categories of persons and, for the first time, grant the Fair Work Commission (Commission) the power to deal with and arbitrate disputes concerning requests for flexibility – including decisions by businesses to decline requests on ‘reasonable business grounds’.

Since the introduction of the Act, there was always an obligation on businesses to respond to requests for flexibility within 21 days of a request being made and the ability of businesses to decline a request on ‘reasonable business grounds’ also existed. However, until now, if a request was declined, the Commission had no power to deal with a dispute and there were effectively no consequences in the event a business did not respond to an employee’s request. Now, that has all changed.

Who can request a flexible working arrangement?

In addition to persons who are parents, care-givers, over 55 or have a disability, the Act now entitles persons who are experiencing family and domestic violence, who provide care or support to a member of their immediate family or household experiencing family and domestic violence, or are pregnant, to request flexible working arrangements at work because of those circumstances.

What kinds of requests can be made?

Examples of changes in working arrangements include changes in hours of work (flexible hours),
job-sharing, changes in patterns of work and changes in location of work (including the ability to work remotely).

What is the process for considering  requests?

In summary, the process now mandated in the Act for dealing with employee requests is as follows:

1. Employee submits a request in writing, clearly explaining what arrangements are sought, providing details of the changes sought and reasons for the changes (Request).
2. The business must respond to the Request within 21 days of receipt (Response).
3. The Response must be in writing and specify whether the Request is granted or refused.
4. If the business intends to refuse the Request, they must consult with the employee regarding the Request prior to issuing the Response (Consultation).
5. In the Consultation, the business must ‘genuinely’ attempt to reach an agreement with the employee.
6. The Response must only refuse the Request if a genuine attempt to reach an agreement has been made, and the refusal is on the basis of ‘reasonable business grounds’ (RBG). RBG is defined to include (but is not limited to):
   1. a lack of capacity;
   2. impracticality of changing arrangements or recruiting new employees to accommodate the request;
   3. significant loss in efficiency or productivity; and
   4. significant negative impact on customer service.
7. If the Request is refused, the Response must:
   1. contain details of the RBG on which the Request is refused;
   2. explain how those grounds apply to the Request; and
   3. inform the employee of any alternative working arrangements that would accommodate the employee’s circumstances or state that there will be no changes.

The Commission’s new power to arbitrate disputes

Provided resolution at the workplace level is exhausted, the Commission can now arbitrate a dispute about a Request, including where a Request is declined or not responded to by a business.  

The Commission is now empowered to make a range of orders following arbitration. The orders can include an order that:

1. the business respond to an outstanding Request;
2. the grounds on which a Request was declined are deemed unreasonable and ineffective;
3. the Request be granted; and
4. the business make specific changes (including reorganising work within a business) to accommodate the Request.

It is an offence to contravene an order imposed by the Commission following arbitration. Should there be a contravention of an order, the company or its directors/officers may be exposed to a civil penalty.

Read other items in Australian Employment Brief - July 2023

Read other items in Commercial Brief - November 2023