Flexible working arrangements are an increasingly important factor for organisations looking to access key talent, boost productivity and improve work/life balance for their people. The COVID-19 pandemic accelerated a broader acceptance and adoption of flexible work practices (particularly working from home) for office-based workers. This has had a significant impact on employee expectations relating to flexible work, and many organisations now position flexible work as a key part of their employee value proposition.
The Federal Government has also recognised that flexible work is another key lever to pull in advancing gender equality, helping to increase workforce participation and leadership representation of women.
On 6 June 2023, the Fair Work Legislation Amendment (Secure Jobs Better Pay) Act 2022 will amend existing provisions in the Fair Work Act 2009 (Cth) (Fair Work Act) to provide greater scope for employees to request flexible work. The right to request flexible work arrangements in certain circumstances under section 65 of the Fair Work Act will be an enforceable workplace right and the Fair Work Commission will now have the power to arbitrate any disputes arising.
Existing provisions for flexible work requests
The Fair Work Act currently has provisions that allow an employee to request a change to their working arrangements in certain circumstances, such as requesting a change in hours or location of work due to parenting/caring responsibilities, being over 55 years of age, or being a person with disability.
Under the current Act, an employer can only refuse a request on ‘reasonable business grounds’ and must provide written reason(s) to any refusal within 21 days. Non-exclusive definitions of those grounds can be found in s 65(5A) of the Fair Work Act, including refusal on the grounds that accommodating the request would be too costly or impractical for the employer. While these grounds will not change, the changes will clarify that the specific circumstances of the employer, including the nature and size of its enterprise will be relevant in considering a flexible work request.
What’s changing?
While the above elements remain unchanged, the Secure Jobs Better Pay Act will amend the Fair Work Act by introducing the following key changes:
- Additional grounds to make requests - employees will be able to make a request on additional grounds including pregnancy or if they, or an immediate family member, experiences family or domestic violence.
- Updated procedure for responding to requests - there will be a more detailed procedure for how employers must respond to requests for flexible work arrangements. This builds on the model award term and stipulates that unless the request is accepted, employers will be required to discuss the request with the employee and ‘genuinely’ try to reach an agreement about making changes to accommodate the employee’s circumstances. Employers must also show that they have regard to the consequences of refusing a flexible work request and the impacts that it will have on the employee.
- Scope to challenge request refusals - it will be possible to challenge a refusal (and the reason(s) for that refusal) in the Fair Work Commission. When refusing a request for flexible work, an employer must also inform the employee how to refer a dispute to the Fair Work Commission. The Fair Work Commission will seek to resolve the dispute initially through conciliation or mediation, but can arbitrate if necessary. The Fair Work Commission can make such orders that it considers fit, including an order that the employer grant the original request or make other specified changes to the working arrangements to accommodate the employee’s circumstances. An employee can access this new jurisdiction if the employer does not grant the request or does not respond in 21 days with a written explanation for the refusal.
How might your organisation be impacted?
- Employers might receive an increase in requests for flexible work, especially in sectors and organisations where flexible work is less common, and in situations where flexible work might not have been seen as feasible.
- Some employers may have to consider and implement flexible work in areas they have never done so previously, and may have to consider changing hours of work or the way in which work is performed (e.g. working from home) for certain employees.
- As increased powers have been given to the Fair Work Commission, employers will no longer have the final say about what constitutes “reasonable business grounds” for refusing a request for flexible work. Employers will need to seriously consider employee requests to ensure they avoid reputational damage from having their decisions overturned by the Fair Work Commission.
- The increase in requests might result in additional administration time for leaders to consider and respond to requests for flexible work. Where a request is refused, employers need to be able to show (objectively and reasonably) why this is not feasible. Given the potential for these matters to be dealt with by the Fair Work Commission, it will be increasingly important for appropriate record keeping processes to be established and adhered to.
What actions can you take?
- Ensure policies, procedures and training are reviewed to align with the new requirements - provide detailed guidance and training for decision makers to help facilitate a cultural shift towards making flexible work possible in roles where it may have been less common, as well as ensuring they understand their responsibilities (i.e. timeframes for responding and the basis on which requests may be refused).
- Ensure a process is in place to enable every request to be carefully considered, taking into account the impact on both the individual and the organisation.
- Consider how you will manage any potential disputes - this might include new record keeping requirements for flexible working requests, and updating processes to allow genuine dispute resolution discussions to occur where needed.
- Go beyond compliance - organisations that benefit most will be those that support and empower their people to work in ways that help them perform at their best. This requires supportive managers, environments and technology that supports hybrid work and conscious teaming that accommodates different patterns of work.
Supporting and enabling flexible work helps ensure organisations can attract and retain top talent in a competitive labour market. While it benefits all employees, it is a particularly important lever for increasing women’s workforce participation and representation in leadership roles.
For further information, please don’t hesitate to reach out to one of our Workforce specialists below.
