On 26 October 2022, the Commonwealth Government announced that it will introduce legislation to amend the provisions of the Fair Work Act 2009, as it relates to flexible work arrangements. 

Purportedly, the purpose of the amendments is to give the Fair Work Commission power to order that employers deal with requests for flexible workplace arrangements.  The legislation may also give the Fair Work Commission power to order that flexible workplace arrangements be put in place.

The wording of the Bill has not yet been published – however, if the final Bill matches industry expectations, it will for the first time give the Fair Work Commission direct independent power to order flexible work arrangements outside the scope of the disability legislative scheme.

Current entitlement to apply for arrangements

Presently, section 65 of the Fair Work Act 2009 allows an employee to request a flexible work arrangement if they satisfy the following criteria:

• the employee is the parent, or has responsibility for the care, of a child who is of school age or younger;
• the employee is a carer (within the meaning of the Carer Recognition Act 2010);
• the employee has a disability;
• the employee is 55 or older;
• the employee is experiencing violence from a member of the employee's family;
• the employee provides care or support to a member of the employee's immediate family, or a member of the employee's household, who requires care or support because the member is experiencing violence from the member's family; and
• they have been working with the employer for a period of 12 months continuously, or if they are casual, they must have worked for that same time period and have a reasonable expectation of receiving more work.

Once these criteria are satisfied, the employee is eligible to apply for flexible working arrangements, such as working from home, or alternative working times. This application is independent of any entitlement to seek reasonable adjustment due to a bona fide disability.

It also provides that parents with responsibility of a child or who have taken leave relating to the birth or adoption of a child can request to work part time.

What must the employer do with the application?

Upon receipt of an application, the employer has 21 days to deal with the request.  Within that time, the employer must consider and decide whether to accept or reject the application.  In determining the application, the employer is entitled to take into account its reasonable business grounds and needs.

The legislation specifies some of the matters which can be considered by employers when assessing the reasonable business grounds.  These are that:

• the new working arrangements requested by the employee would be too costly for the employer;
• there is no capacity to change the working arrangements of other employees to accommodate the new working arrangements requested by the employee;
• 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;
• the new working arrangements requested by the employee would be likely to result in a significant loss in efficiency or productivity;
• the new working arrangements requested by the employee would be likely to have a significant negative impact on customer service.

Remedies available to unhappy employees

At present, in the event that the employer makes a decision within that 21 day period, the employee has no right of recourse if the employer rejects the application citing the “reasonable business grounds”.

The only apparent remedy currently available to an employee is if the employer does not deal with the application within 21 days. In those instances, the employee can apply to the Fair Work Commission seeking a direction that the application be dealt with.

In practice, this means that an employer can reject any request so long as reasons are given for the rejection, and the employer does so within 21 days of the request. Other than this, the current legislation gives employees no recourse to appeal an employer’s rejection, unless it is explicitly stated in their contract.

Pandemic has changed everything

The current legislation was drafted long before the COVID‑19 pandemic occurred.  In the time since early 2020, the nature of working in Australia has changed dramatically.  Many workers are now seeking greater flexibility in the way they carry out their work, and the location from which they do so. 

Proposed changes

Whilst we do not know precisely what the terms of the legislation will be, it does seem that the proposed amendments will oblige employers to come to an agreement with employees requesting flexible conditions.

This will include the employer making “genuine efforts” to provide requested alternate arrangements if they cannot accommodate the employee’s request. Rejection will only be allowed if accepting requests would create “unjustified hardships.”

Further, if no agreement is reached, employees will be able to appeal to the Fair Work Commission for conciliation. If no agreement is reached in that process, the Commission would be able to make a binding decision.

The intention of these provisions, according to the Government, is to provide an incentive for employers to negotiate with employees requesting flexible work arrangements.

There has also been discussion among the senate committee responsible for drafting the change regarding civil penalties that could be brought against employers who do not properly consider requests.

With current support from ALP and Greens members of the committee, it is likely that this penalty will be introduced.

Given the contrasting desires of employers, many of whom are pining for a return to the office, and employees, many of whom want to continue working from home - it is likely that there will be much disputation and litigation of this issue.

Although not in force yet, it will be important for employers to carefully consider these changes to the law in their handling of flexible work requests and agreements.

In the meantime, employers must be diligent to deal with eligible applications within 21 days of receipt, to avoid any possible Fair Work litigation.

If you have a query relating to any of the information in this article, or would like to speak with Nick Maley, Partner within Holman Webb’s Workplace Relations Group with regard to how these changes are set to impact you and your organisation – please don’t hesitate to get in touch today