In our previous e-brief , we provided an overview of the proposed changes under the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill 2022.
The Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (Secure Jobs, Better Pay Act) was passed by both Houses of Parliament on 2 December 2022.
In the first of a series of updates, we will examine the changes under the Secure Jobs, Better Pay Act will make to requests for flexible working arrangements the Fair Work Act 2009 (FW Act).
Broadly speaking, the changes are intended to “strengthen” employer obligations when considering requests for flexible work arrangements made under section 65 of the FW Act.
They also provide for a new dispute resolution process where a request for flexible working arrangements is denied or not responded to with the relevant timeframes.
The changes will come into effect on a day fixed by Proclamation, but no later than 7 June 2023.
What we have now
The right for employees to make requests for flexible working arrangements is provided under the National Employment Standards in the FW Act.
Employees (including casual employees in specified circumstances) are eligible to make requests for flexible working arrangements under the FW Act if they have completed at least 12 months’ continuous service with their employer immediately prior to making the request.
An eligible employee may currently make a request for a flexible working arrangement if the employee:
- is the parent, or has responsibility for the care, of a child who is of school age or younger;
- is a carer (within the meaning of the Carer Recognition Act 2010);
- has a disability;
- is 55 or older;
- is experiencing violence from a member of the employee’s family;
- 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.
A request for flexible working arrangements must be made in writing and set out details of the change sought and the reasons for the change.
The employer must respond to a request for flexible working arrangements in writing within 21 days, advising whether they grant or refuse the request. If the request is refused, the written response must outline the reasons for refusal.
An employer may only refuse a request for flexible work arrangements on reasonable business grounds, which include but are not limited to:
- 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 significant loss of efficiency or productivity; and/or
- the new working arrangements requested by the employee would be likely to have a significant negative impact on customer service.
There is no formal mechanism for an employee to seek review of a decision by their employer to deny a request for flexible work arrangements on reasonable business grounds. Instead, employers and employees are encouraged to resolve any impasse about a request for flexible working arrangements through negotiation if that can be achieved.
How it will change
The Secure Jobs, Better Pay Act provides for the following changes to requests for flexible working arrangements under the FW Act.
Expanded coverage
The circumstances in which an employee may request a flexible work arrangement will be expanded to include where they, or a member of their immediate family or household, experiences family or domestic violence;
More detailed procedure in responding to requests
The changes under the Secure Jobs, Better Pay Act introduce a more detailed procedure that will apply to employers in responding to requests for flexible work arrangement.
Employers are now required to:
- Discuss requests with the relevant employees and genuinely try to reach agreement before refusing an employee’s request;
- have regard to the consequences of any refusal of the request on the employee; and
- provide detailed reasons for any refusal (which must still be based on reasonable business grounds); and
- informing the employee of any alternative working arrangements the employer would be willing to make instead to accommodate the employee’s circumstances; and
- provide information on the dispute resolution processes that are available (see further below).
New dispute resolution process
The Secure Jobs, Better Pay Act introduces a new dispute resolution process in relation to requests for flexible work arrangements.
Where an employer has refused a request by an employee for a flexible work arrangement, or the employer has failed to respond to the request within 21 days, and discussions at the workplace level have failed to resolve the dispute, the employee may refer the dispute to the Fair Work Commission.
The Fair Work Commission is empowered to deal with the dispute as it considers appropriate. This may include by conciliation or arbitration.
Key issues for employers
The changes to requests for flexible work arrangements under the FW Act represent a significant shift in how such requests are to be considered and responded to by employers.
The changes are likely to call for employers to reconsider their strategies in relation to flexible work arrangements in order to manage:
- the increased risk of disputes;
- the matters being subject to external dispute resolution processes; and
- the prospect of an external body imposing working arrangements in respect of their employees in their business.
Employers will also need to review their policies and procedures to ensure that they are consistent with the changes to the FW Act in respect of flexible work arrangements.
Our experienced Employment Lawyers in Canberra can help you and your business to navigate the changes and to manage the risk of disputes in relation to requests for flexible work arrangements.