How will your business deal with requests for Flexible Working Arrangements?

On 1 January 2010, the National Employment Standards ("NES") contained in Part 2-2 of the Fair Work Act 2009 (Cth) ("FW Act") will commence.  The NES will apply to all employees in the Federal system as minimum employment entitlements. 

For the first time, qualifying employees will have a statutory right to request flexible working arrangements.

A full-time employee who has completed at least 12 months continuous service with an employer and who is a parent, or has responsibility for the care, of a child under school age, or a child under 18 years who has a disability, may request the employer for a change in working arrangements for the purpose of assisting the employee to care for the child.

School age for a child means the age at which the child is required by a law of the State or Territory in which the child lives to start attending school.

It is a requirement that the employee makes the request in writing and set out details of the change sought and the reasons for the change.  The employer must then give the employee a written response to the request within 21 days, stating whether the employer grants or refuses the request.  The failure to consider the request is a breach of the NES.  It is a requirement that the employer may only refuse the request on “reasonable business grounds“(which is not defined in the FW Act).  Where the employer refuses the request the written response by the employer must include the reasons for the refusal.

Although the NES which will provide employees with a statutory right to request workplace flexibility does not commence until 1 January 2010, there are numerous cases in which it has been held discriminatory to refuse such requests.  After 1 January 2010 an employee will continue to have the same rights employees currently have under anti-discrimination legislation.

Since March 2001, “carers’ responsibilities” has been a ground of discrimination under the NSW Anti-Discrimination Act. Under the Act it is unlawful for an employer to discriminate, either directly or indirectly, against an employee on the grounds of that person’s responsibilities as a carer. Care of a young child obviously falls within this ground and where such requests are unreasonably refused, this may amount to carers’ responsibilities discrimination. An unreasonable refusal of flexible work arrangements may also constitute discrimination based on sex. Whether part time or flexible work arrangements are reasonable depends on the particular circumstances of each case, including the nature of the position and business interests. If an employer refuses a request for flexible working arrangements in a particular role, they must be able to give good reasons why that role cannot be performed in the manner proposed.

Types of flexible working arrangements

Flexible working arrangements may include:

• Reduced time/Part time work – working less than five days each week or reduced hours/days calculated on an annual basis, for example not working during school holidays

• Flexible hours – starting and finishing work at non-standard times on a regular basis around core operating hours

• Job sharing – several employees (usually two people) each working part time, sharing one full time position. 

• Remote working – regularly working away from the office usually working from home.  Some or all of the employee’s work is performed out of the office.

Reasonable business grounds

Under the NES if an employer does not accommodate an employee’s request, the employer will need to demonstrate that it is reasonable to refuse the employee's request due to reasonable business grounds.  These matters should be considered on a case by case basis and include an assessment of the requirements of the role and the needs of the business and (if applicable) client/customer expectations.

Case law gives some guidance on reasonable business grounds including:

• Cost to the business of accommodating the request;

• Employer’s ability to reorganise work arrangements;

• Business needs of the employer.

The explanatory memorandum to the new FW Act also provides some guidance on reasonable business grounds:

• The effect on the business of approving the request including financial impact and impact on efficiency, productivity and customer service;

• Inability to organise work among existing staff; and

• Inability to recruit a replacement employee on the practicality of the arrangements that need to be put in place to accommodate the request.

Taking into account the above cases and the new legislative requirements, organisations must seek to accommodate employees seeking flexible working arrangements.  Prior to 1 January 2010 refusal to consider flexible work arrangements is likely to expose an employer to the risk of a claim.  After 1 January 2010, this will certainly be the case as well as a breach of the FW Act.  Employers need to ensure they have a flexibility request procedure in place to avoid non-compliance with the legislation and a process in place to achieve successful flexible working arrangements.