Flexibility or a Straight - Jacket?
From 1 January 2010 all employers covered by the Fair Work Act will be bound by 10 National Employment Standards. These are minimum requirements that may not be contracted away. We will be reporting on these over the coming months. One of the most controversial is the new employee right to request flexible working arrangements. This new right raises many questions which employers will have to grapple with, potentially at their peril, as the following article shows.
One of the main problems employers will have to face is a lack of understanding. There is a belief (maybe through press misreporting) that the new law confers a general right applying to all employees. This is a myth. The right is (at this stage at least) extremely limited. There are three main limitations.
First of all, the only reason why a parent or guardian may justifiably request a flexible arrangement are to look after a child either less than school age, or under 18 with a disability. Contrary to some media reports therefore school drop offs would not appear to be a proper reason for a request, unless the child has a disability.
A second limitation on the right is that an employer may refuse the request on "reasonable business grounds". We discuss this limitation further below.
And third, there is not at present any direct means, under the Fair Work Act, to challenge a refusal if the employer believes the employer has unreasonably refused the request.
Despite the limitation on directly challenging a refusal there is a sting in the tail for employers. This is that there may be indirect means of legal enforcement which may be available to a dissatisfied employee. There are circumstances in which an employer's refusal on "reasonable business grounds" may still give rise to under discrimination laws or the Fair Work Act "adverse action" provisions.
Particular care needs to be taken as the exposure if these provisions are breached could be substantial. In the case of an "adverse action" claim under the Fair Work Act a reverse onus of proof applies and there is (in theory at least) scope for unlimited compensation for a breach.
Employers who receive a request are therefore not advised to put their head in the sand and hope a request will go away or refuse the request without giving due consideration to the request.
There is also the possibility that an enterprise agreement may already contain a right to request flexible working arrangements. Even though the Fair Work Act right may not be directly enforced, if there is a right to make flexible work requests under an enterprise agreement, it may be enforced in the courts under contract.
Another major difficulty facing employers is to determine whether or not there are "reasonable business grounds" to refuse a request. There is no definition and therefore no objective basis for employers to determine, before the event, whether or not they are complying with the law in refusing a request. This will be worked out on a case-by-case basis.
The problems are compounded by the possibility of multiple or sequential requests. These situations need particular care and attention. If business circumstances allow some but not all requests to be granted, it is important for managers to engage with all affected employees and attempt to find a flexible solution that accommodates all (as far as possible).
Another potential trap is where a request is granted and the qualification requirements are no longer met, as when the child reaches school age, or where business circumstances change adversely. Provision should be made for the arrangement to be reviewed once such an event occurred.
As can be seen, the new right is one which may raise many difficult questions. Care should be taken to treat all requests seriously. There are formal requirements in the Fair Work Act regarding the timing and form of requests and responses which as a minimum need to be complied with.
All in all, employers should review their practices in light of this important change. As a minimum this should involve reviewing policies and procedures for requests for flexible working arrangements, creating an application form and a response form, training managers responsible for decision-making, and communicating the company's policy to staff.
No doubt over time what this law means in practice, which is presently very unclear, will be clarified through case law after the inevitable disputes arise.
If you have any queries about flexible work requests, please contact either Mark Hemery, Principal at mhemery@talbotolivier.com.au or David Paton, Solicitor, at dpaton@talbotolivier.com.au.
