Australia: Proposed changes to employee flexible work arrangements

As workers have returned to the office and other workplaces in the year since the pandemic, many have wondered whether they have a legal right to work from home. More broadly, parents, carers and other workers often consider whether they have a similar right to flexible working arrangements. We deal with those issues in this article.

There is no doubt that the COVID-19 pandemic changed business and personal attitudes towards remote work, working from home, and flexible work arrangements more generally. During 2020 and 2021, millions of Australian workers worked remotely on a regular basis due to the pandemic.

In late October 2022, the Federal Government introduced draft legislation that would strengthen a worker's right to flexible work arrangements.

Current law: section 65 of the Fair Work Act

Section 65 of the Fair Work Act provides that an employee may request a change to their working arrangements if the employee is:

• a parent, or has responsibility for the care, of a child who is of school age or younger;
• the employee is a carer (as defined by the Carer Recognition Act 2010);
• the employee has a disability;
• the employee is 55 or over;
• 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.

The employee is only entitled to make the request if they have completed 12 months of continuous service before making the request or, for a casual employee:

• is a regular casual employee who has been employed on that basis for a sequence of periods of employment during a period of at least 12 months; and
• has a reasonable expectation of continuing employment.

A refusal of the employee's request for flexible work arrangements: no right to appeal

At face value, section 65 of the Fair Work Act sounds promising for employees seeking flexible work arrangements. However, as currently drafted, the provision goes on to provide that an employer may refuse the request if they have "reasonable business grounds" to do so.

The section sets out a list of what "reasonable business grounds" include (but are not limited to). This includes that:

• the changes are too costly for the employer;
• the changes are too impractical; or
• the changes cause a significant loss in efficiency, productivity or a decline in customer service.

Employers are required to give a written response within 21 days of the employee's request for flexible work arrangements stating whether or not it is granted. If it is not, the employer must include details of the reasons for the refusal.

Unfortunately, as things presently stand, section 65 of the Fair Work Act does not provide any avenue for an employee to appeal a refused request. This inability has proven to be a significant weakness in the right provided in the legislation.

Proposed laws: genuine efforts and the right to appeal a refusal

On 27 October 2022, the Federal Government introduced the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill 2022. Part 11 of the Bill proposes to introduce new sections 65A, 65B, and 65C of the Fair Work Act which would make several changes to the current law.

Genuine efforts

Under the new sections, an employer may only refuse a request for flexible work arrangements if it has:

• discussed the request with the employee;
• genuinely tried to reach an agreement with the employee about making changes;
• had regard to the consequences of the refusal for the employee; and
• the refusal is on reasonable business grounds.

The employer does not need to agree to the arrangements if it has reasonable business grounds for refusing a request for the change, so long as it has satisfied these additional steps.

The new sections provide that the employer must set out the particular business ground it relies on for refusing the request and explain how those grounds apply to the request. The employer must set out changes (other than the requested change) that it is agreeable to or state that there are no changes it is agreeable to.

Right to appeal to the Fair Work Commission

The new sections also provide the opportunity for an employee to refer (appeal) the matter to the Fair Work Commission if:

• the employer has not responded to the request within 21 days or has refused the request; and
• discussions at the workplace level to resolve the dispute have been unsuccessful.

Once the matter is before the Commission, a conciliation will be held to attempt to resolve the matter. If not resolved, the matter can proceed to arbitration from which the Fair Work Commission may order that:

• if the employer has not given the employee a written response, the employer is assumed to have refused the request;
• if the request was refused, that the grounds on which it was refused were reasonable business grounds;
• if the request was refused, that the ground on which it was refused were not reasonable business grounds;
• the employer gives the employee a written response to the request;
• the employer gives the employee details, or further details of the reasonable business grounds relied on;
• any other order that the Fair Commission considers appropriate to ensure compliance by the employer of its obligations in relation to genuine efforts; and/or
• an order that the employer grant the request or make specified changes to the employee's working arrangements.

Employees' right to flexible work arrangements will be strengthened

Under the current law, the right to flexible work for carers, disabled workers and employees subject to domestic violence is relatively weak. This is because section 65 of the Fair Work Act entitles an employer to refuse a request on "reasonable business grounds". Further, there is no right for an employee to appeal the employer's decision.

The Bill also changes the operation of the civil remedy provisions. It would make contraventions of sections 65 and 65A a civil remedy provision. This would make the provision consistent with the Court's powers regarding breaches of other provisions in the NES.

If passed, the new bill strengthens an employee's right to flexible work in three key ways.

1. Firstly, the changes impose a greater obligation on employers to make genuine efforts to reach an agreement with the employee. Employers must discuss the request with the employee, genuinely try to reach an agreement and have regard to the consequences of a refusal on the employee.
2. Secondly, employees will have the option of appealing an employer's refusal (or failure to respond) to a request, to the Fair Work Commission. The Fair Work Commission would be empowered to make a range of orders when dealing with such an application.
3. Finally, the Bill makes it a civil remedy provision for an employer to contravene the requirements, giving an employee the right to sue in a Court and seek the imposition of a penalty.

These changes fill gaps in the current employment laws and strengthen the right of certain employees to flexible work arrangements. Employees who are carers, disabled or subject to domestic violence would have their rights strengthened if the bill passes Parliament.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.