Flexible Working Arrangements – Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill 2022

The Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill 2022 passed Parliament on 2 December 2022. One of the key areas of reform relate to Flexible Working Arrangements (FWAs) and the right to request a change in working arrangements that apply to employees.

Summary of Amendments

An employee has the right to ‘request’ a flexible working arrangement, and an employer may refuse that request on reasonable business grounds. The existing provisions have been criticised for little or no effective means to challenge the employer’s decision to refuse.

The amendments now empower the Fair Work Commission (FWC) to deal with disputes about FWAs. The FWC may resolve disputes by conciliation, mediation, by making a recommendation or expressing an opinion and now, by arbitration with the power to make orders that will deal with the request, where other forms of dispute resolution have not resolved the matter.

Employers should note there are now increased obligations on the employer to consult with their employees and discuss FWA requests. Other notable amendments include:

• Expansion of the circumstances in which an employee may request a FWA where they, or a member of their immediate family or household, experiences family or domestic violence, to align rights with the entitlement to family and domestic violence leave.
• Increased obligations for employers when presented with FWA requests, for example:
  • Providing the employee with a written response as to whether the request is approved or not, within twenty-one (21) days.
  • If refused, this refusal is limited to reasonable business grounds, discussed further below.
  • Refusals are subject to having had a discussion with the employee with regard to the consequences of the refusal for the employee and where the employer has genuinely tried to reach an agreement about making changes to the employee’s working arrangements to accommodate their circumstances.
  • If the employer refuses the request, the written response is required to be provided to the employee with details of the reasons for the refusal, setting out the employer’s particular business grounds for refusing the request and explaining how those grounds apply to the request.
  • Reasonable business grounds include that the new working arrangements would be ‘too costly’ for the employer, that there is ‘no capacity’ to change the working arrangements of other employees to accommodate the change, that is would be ‘impractical’ to change the working arrangement of other employees or recruit new employees, that the change would likely result in a ‘significant loss’ in efficiency or productivity or have a ‘significant negative impact’ on customer service (as well as factors such as the nature and size of the enterprise carried on by the employer).

How does this impact employers?

The examples of what may constitute reasonable business ground examples are indicative of a relative high bar to be met before a refusal to agree a request can be considered reasonable, and the interpretation of these provisions by the Commission will be instructive as to how employers should respond.

Employers must review their employment contracts, policies and template documents which deal with FWA provisions and entitlements. Importantly, training should be given to those who are tasked with considering and responding to the requests to ensure there is no breach of the provisions that attract penalties.