As part of the Commission’s four-yearly review of modern awards,[1] the Full Bench of the Fair Work Commission (Commission) recently handed down a decision (Decision),[2] to insert a new model term (Model Term) into all modern awards, which will:

  • complement the flexible working provisions contained in s 65 of the Fair Work Act 2009 (Cth) (Act); and
  • impose further obligations on employers when responding to an employee’s request for family friendly working arrangements.

We set out below some background, the new obligations imposed on employers and the impact of the Model Term for employers.

Background

Under s 65 of the Act, certain employees[3] can request a change in their working arrangements because of their circumstances, such as being a parent of a child who is of school age or under, a carer, having a disability, being 55 or older or experiencing violence from a member of the employee’s family. The employee must make the request in writing, and the employer may refuse the request only on “reasonable business grounds”.

At the end of 2017, the Australian Council of Trade Unions (ACTU) submitted that the existing family working arrangements are inadequate,[4] since the ‘right to request’ in s 65 of the Act does not provide employees with an enforceable right. An employer’s decision to refuse a s 65 request is not subject to review or appeal. The ACTU made an application for a new set of employee entitlements for employees with parenting or caring responsibilities to have the right to:

  • access part-time work or reduced hours upon giving reasonable notice;
  • revert to their former working hours up until their child is school aged; and
  • revert to their former working hours for a period of two years from the date they commence the family-friendly hours.

In March 2018, the ACTU’s claim was rejected by the Commission,[5] finding that it would remove the ability of businesses to determine how to roster labour and had the “potential to have a substantial adverse impact on businesses”.[6] The Full Bench then published a provisional clause permitting certain employees to request a modification in working arrangements based on their parental responsibilities.

New obligations for employers responding to employee’s requests for flexible working arrangements

The Decision proposes to insert a Model Term in all modern awards which complements the current framework when dealing with requests for flexible working arrangements, as follows:

  • Responding to the request – before responding to a request made under s 65 of the Act, the employer must discuss it with the employee and genuinely try to reach agreement on a change in working arrangements that will reasonably accommodate the employee’s circumstances, including:
    • the needs of the employee;
    • the consequences for the employee if changes in working arrangements are not made; and
    • any reasonable business grounds for refusing the request.
  • Content of the written response – if the employer refuses the request, the written response must include:
    • details of the reasons for the refusal, including the business ground(s) for the refusal and their applicability; and
    • details of the working arrangements that the employer can offer the employee so as to better accommodate the employee’s circumstances.
  • Dispute resolution – disputes about whether the employer has discussed the request with the employee and responded to the request in the way required by the Model Term can be dealt with by the Commission. The Commission cannot deal with a dispute to the extent that it is about whether the employer had reasonable business grounds to refuse a request under section 65 of the Act, unless expressly agreed in a contract of employment or enterprise agreements.[7]

All modern awards will be varied to insert the Model Term, unless it is demonstrated that there are circumstances particular to that award which compel the conclusion that the achievement of the objectives for that award does not necessitate the inclusion of the Model Term.[8]

Impact of the Model Term for employers

To comply with the proposed Model Term, employers should:

  • create or modify existing policies about workplace flexibility to include the Model Term, so decisions are clear and consistent for all employees;
  • in responding to an employee’s request, ensure that they comply with the formal requirements contained in the Act, the Model Term and the terms of any policy they have in relation to workplace flexibility;
  • only consider refusing a request for flexible working arrangements where they have real and specific operational reasons for doing so; and
  • where a request is refused, then consider which working arrangements can be offered to the employee to accommodate the employee’s circumstances.

If in doubt, employers should seek legal advice about how to manage employee’s requests for flexible working arrangements.

[1] See section 156 of the Fair Work Act 2009 (Cth) (Act).

[2] Family Friendly Working Arrangements [2018] FWCFB 5753.

[3] Non-casual employees which have completed 12 months of continuous services with the employer; long-term casual employees which have a reasonable expectation of continuing employment with the employer on a regular and systematic basis – section 65(2) of the Act.

[4] Family Friendly Working Arrangements [2018] FWCFB 5753 at [1].

[5] Family Friendly Working Arrangements [2018] FWCFB 1692.

[6] Idem at [409].

[7] See ss 44(2) and 739(2) of the Act.

[8] Family Friendly Working Arrangements [2018] FWCFB 5753 at [87].