Family friendly test case proceedings

The Fair Work Commission recently handed down its decision in the family friendly test case proceedings as part of the Four Yearly Review of Modern Awards.

Background

The family friendly work arrangements (AM2015/2) common issue proceedings centred around a claim by the Australian Council of Trade Unions (ACTU) which sought to impose a model term in all modern awards that would allow employees with parenting or caring responsibilities to unilaterally:

• select their hours of work to accommodate their parenting/caring responsibilities;
• for employees with parenting responsibilities, revert to their original hours of work at any time prior to their child attending school; and
• for employees with caring responsibilities, revert to their original hours of work within two years of commencing flexible hours.

Importantly, an employer would not be able to refuse an employee’s proposal on reasonable business grounds (or indeed any grounds at all).

The claim would mark a significant departure from the current operation of the law under section 65 of the Fair Work Act 2009 (Cth) where employees have a right to make a request for flexible working arrangements which employers can refuse on reasonable business grounds.

ABLA played a leading role in the proceedings, representing the Australian Chamber of Commerce and Industry.

The decision

While the desirability of increased labour force participation by parents and carers was acknowledged by the Full Bench of the Fair Work Commission, the Full Bench rejected the claim on the basis that it would fundamentally alter the employment relationship and has the potential to have a substantial adverse impact on business.

However, the Full Bench did determine (on a provisional basis subject to further submissions by the parties), that all modern awards should be varied to incorporate a model term related to facilitating flexible working arrangements.

FWC model clause facilitating flexible working arrangements

The model clause proposed by the Full Bench proposes to supplement s65 of the National Employment Standards by:

• expanding the group of employees eligible to request a change in work arrangements to include ongoing and casual employees with at least six months’ service with the employer (compared to the current threshold of twelve months for a more limited group of employees);
• requiring an employer to seek to confer with the employee before refusing an employee’s request to genuinely try to reach an agreement on a change in working arrangements that will reasonably accommodate the employee’s circumstances; and
• requiring an employer to provide a comprehensive explanation of the reasons for the refusal in writing including the details of any change in working arrangements that was agreed or if no change is agreed, the details of any changes in working arrangements that the employer can offer to the employee.
• The parties have now been invited to provide submissions on the Full Bench’s model term and ABLA will be providing its comments on the model term.

The effect on businesses

The refusal of the ACTU’s original claim represents a very important restatement of the principle that an employer should be able to determine the hours of work it requires from its employees.

Nigel Ward, CEO of Australian Business Lawyers & Advisors and lead advocate in the case said:

“The ACTU was trying to fundamentally change the employer/employee relationship in Australia and cross the ‘Rubicon’ to a system where an employer no longer had control of when people worked leaving it to employees to decide when they wished to work. The result is a common sense one for employers and will afford employees greater rights in asking for, but not demanding, flexibility in their roles.

The evidence heard in the case was that the vast majority of employees who request flexibility are being granted their requests. Employers and Employees are getting it right.”

The proposed new clause will mean some more “red tape” around consultation like obligations with parents or employees with caring responsibilities however is unlikely to fundamentally alter business practice.

If you are unsure how this decision impacts your business, call 1300 565 846 to discuss what you need to do to ensure future compliance.

ABLA CEO Nigel Ward led the employer case for the Australian Chamber of Commerce and Industry, the New South Wales Business Chamber and Australian Business Industrial.