Is WFH a right, or a privilege? Key takeaways from major wfh decision against Westpac

The decision of the Fair Work Commission (FWC) in the case of Karlene Chandler v Westpac Banking Corporation has demonstrated that, in the right circumstances, and where requests are handled poorly, employees can exercise significant power in making ‘working from home’ flexibility requests. Notwithstanding that the case has been hailed as a ‘fantastic win’ by unions, it is, as is typical, a case that is confined to its own unique facts.

Decision

The employee, who had moved a considerable commute away from Sydney and had ‘school drop-off’ responsibilities for her children, sought an order that she be allowed to work from home full time.

Westpac, claiming that some ‘in person’ office attendance was required for efficiency and collaboration purposes, sought to implement a policy requiring the employee to attend the corporate office two days per week.

Following a hearing, the FWC’s Roberts DP granted the employee’s request that her flexible working arrangement (FWA) be approved.

Roberts DP determined the following:

1. that Westpac did not meet the consultation requirements of section 65A(3) of the Fair Work Act 2009 (FW Act);
2. that the evidence provided by Westpac did not establish that there were reasonable business grounds for the refusal;
3. any fairness considerations in the case weighed in the favour of the making of an order.

Distinction between responding to a request for a FWA and explaining grounds for refusal

The case places an emphasis on considerations to be made by the employer prior to making a refusal – i.e. when responding to the request for a FWA.

Section 65A(3) provides that the employer may refuse the request only if:

• the employer has discussed the request with the employee;
• genuinely tried to reach an agreement with the employee about making changes to the employee’s working arrangements;
• the employer and employer have not reached an arrangement;
• the employer has had regard to the consequences of the refusal for the employee; and
• the refusal is on reasonable business grounds.

A written response to the request should also be given to the employee within 21 days of receiving the request.

Westpac did not take the above measures when responding to the employee’s request. It did not provide a response to the FWA request within 21 days of the request, and no reasons for refusal were given in the initial written refusal of the FWA. It was evident that they did not take any measures to conduct discussions with the employee as required by Section 65A(3).

Reasonable business grounds

Westpac submitted that it had reasonable business grounds for the refusal, being that the new working arrangements would be likely to result in a significant loss in efficiency or productivity (section 65A(5)(d)).

Westpac further provided evidence to the benefits of physical presence in the office, including helping the team members retain a customer focus, and fostering collaboration in the applicant’s immediate team, stakeholders and with the broader company.

However, Roberts DP determined that the evidence of these benefits was generalised and were insufficient to establish reasonable business grounds. He stated that “the respondent made no attempt to quantify any supposed losses or negative impact and to the extent such loss”, and that the evidence did not rise to a level of significance. The FWC was also satisfied that the Applicant’s duties could be performed remotely, as she had been doing it for years and doing so successfully.

Fairness between employer and employee

Westpac submitted that making orders to grant the FWA would create unfairness as it would relieve the employee of a requirement that applies to all other Westpac employees, especially where the “present circumstances had arisen because of her life choices and preferences of the Applicant”.

Roberts DP accepted that the present circumstances had arisen “within the usual economic constraints that apply to the choices that every person makes”, and that there was no evidence that the Applicant had sought Westpac’s support to accommodate the Applicant’s choices.

However, he noted that whilst Westpac might obtain some benefit from minimal levels of in-office attendance, the consequences of not making an order were seriously prejudicial to the applicant and her family.

What next? Measures to be taken by employer
The decision reinforces the importance of having the following arrangements in place when contemplating FWAs:

1. a process which ensures that a genuine consultation about the request occurs, and where an agreement is not reached, making sure to consider that consequences of the refusal on the employee;
2. establishing (i.e. having evidence of) genuine reasonable business grounds for a refusal (such as provided in section 65A(5) of the FW Act). This should go well beyond generalised submissions abouts impacts on generalised concepts like collaboration, culture, office energy etc etc etc;
3. ensuring that the determination of FWAs are not met with a ‘one size fits all’ approach – every employee’s circumstances will be different and will require a different consideration exercise.

Ultimately, for Westpac, failures in compliance steps alongside the fact that the employee had been successfully working from home for some years meant that, in the circumstances, reasonable business grounds couldn’t be made out. In other circumstances, for other employees, that result may well be different.

The status of working from home as a right or a privilege will depend on the request, an individual employee’s circumstances as well on the employer’s response.

To help employers set up a process and have clear communication, ABLA developed a Flexible Work Request Toolkit. Get in touch if you'd like to purchase this for your business or If you require any assistance in responding to an employee request.