Not enough to say no: what the changes in modern awards mean for discussing and refusing flexible work requests.

In November 2018, the Full Bench of the Fair Work Commission handed down a decision that expands on an employer’s obligations when considering an employee’s request for “family friendly” working arrangements. The decision inserted a model term into all modern awards (Flexible Work Decision).

This model term does not apply to employees covered by an existing enterprise agreement (EA), although it will need to be considered as part of EA negotiations as it will be relevant to the “better off overall test” (BOOT) going forward, in circumstances where awards containing the model term apply.

It is important for employers who have employees covered by a modern award, or who would like to adopt “best practice”, to understand their obligations and the steps an organisation can take to ensure that it is complying with this term.

Background to the Flexible Work Decision

Employers must provide a written response to requests for flexible working arrangements within 21 days, stating whether the employer grants or refuses the request and the reasons for any refusal. Employers may refuse the request only on “reasonable business grounds”.

In 2018, the Australian Council of Trade Unions (ACTU) made an application for a new award right for parents and carers to:

• access part-time work or reduced hours upon giving reasonable notice; and
• revert to their previous working hours when their child reaches school age and for carers to do the same after 2 years on family-friendly hours

The Full Bench rejected the ACTU’s claim, finding that such changes had “the potential to have a substantial adverse impact on businesses”. The Full Bench then published a provisional clause allowing certain employees to request a change in working arrangements based on their parental or caring responsibilities, and sought feedback about, among other things, the terms of the provisional model term. The Flexible Work Decision comes as a result of substantial feedback from employers and employee organisations.

What are the obligations for employers responding to employee requests?

The Full Bench’s Flexible Work Decision inserted a model award term into all modern awards that supplements the current legislation in the following ways (for employers and employees covered by a modern award):

• Before responding to an employee’s request, an employer must discuss the request with the employee and genuinely try to reach agreement on a change in working arrangements that will reasonably accommodate the employee’s circumstances, having regard to various factors.
• If an employer refuses the request, and has not reached an agreement with the employee, the written response must now include:
  • - details of the business ground(s) for the refusal and how they apply; and
  • - whether or not there are any alternative working arrangements the employer can provide to better accommodate the employee’s circumstances and, if so, details of those changes in working arrangements.

• If the employer and employee reach an agreement that differs from the change initially requested by the employee, the employer must provide the employee with a written response to their request setting out the agreed change(s) in working arrangements.
• Employees can now dispute whether employers have correctly followed these processes. However, unless agreed specifically in an EA or employment contract, whether business grounds are reasonable may not be challenged.

What does this mean for employers?

While the model term imposes extra obligations on employers managing employee requests for flexible working arrangements, there is no reason to be concerned. In most cases, employers will simply need to enhance their existing processes for managing employee requests for flexible working arrangements, and they will continue to be able to refuse requests based on (genuine) reasonable business grounds. Many employers already have practices that reflect the proposed terms, given the requirements of discrimination legislation.

The model award term is not relevant to employees covered by an existing EA. However, it does need to be considered as part of the BOOT for future EAs.

To ensure compliance with the model term, an organisation may wish to consider the following checklist of steps (if it has not done so already):

1. Implement a “flexible working arrangements” policy that is legally compliant and tailored to your organisation’s operations.
2. Educate your staff about how to make a request for flexible working arrangements and how such a request will be handled.
3. Make sure your organisation is genuinely open-minded in its consideration of an employee’s request. This will involve discussing the request with the employee and giving genuine consideration to how the organisation might best respond, bearing in mind that many jobs can be job-shared, if not capable of being performed part-time (for example).
4. If your organisation is considering refusing an employee’s request to change their working arrangements, your organisation must have reasonable business grounds to do so and be able to clearly articulate those reasons. It is not sufficient to rely on what might be convenient or preferable as “reasonable business grounds”.
5. Where a request is refused, then consider whether alternative arrangements could be put in place that will accommodate the employee’s circumstances.
6. Keep up to date with changes to the awards that apply to your workforce by signing up to Fair Work Commission updates.

If in doubt, consider seeking legal advice about how your organisation can best meet its obligations for managing employee requests for flexible working arrangements.

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