Following the Jobs and Skills Summit, the Federal Government announced it will be taking “immediate action” to make changes to the Fair Work Act to provide “stronger access for flexible working”.
These changes are likely to see an expansion of the groups of employees who are entitled to request flexible working arrangements under the Fair Work Act, as well as stronger protections where their request is declined by their employer, including a potential review mechanism through the Fair Work Commission and possible arbitration.
Issues with flexible work arrangements
With COVID-19 forcing an unprecedented number of people into working from home, there has been a renewed push for more workers to be able to access flexible working arrangements that were temporarily put in place during the pandemic.
While there is nothing stopping an employee from making an informal flexible work request, only certain categories of ‘eligible employees’ have a legislated right to formally request flexible working arrangements under section 65 of the Fair Work Act 2009 (Cth). Those categories include people with a disability, people aged over 55 or those with responsibility for the care of a school age child or younger.
Unions argue that the limited categories of workers who have a right to request flexible work arrangements has forced many workers, particularly women, into ‘insecure work’ because of a lack of access to ongoing full-time or part-time employment that is sufficiently flexible to enable them to balance the work-family juggle.
There is also a long-held perception by unions that employees face difficulty accessing flexible work arrangements due to negative employer attitudes to family-friendly work practices. This is said to be exacerbated under the current provisions which are described by some as a “toothless tiger” due to the absence of an enforcement mechanism when an employer refuses to grant a request. Under current laws, neither the Fair Work Commission nor a Court is able to consider the ‘reasonableness’ of an employer’s decision to refuse a request for flexible work arrangements unless previously agreed in a contract of employment or enterprise agreement. This means employees have little recourse where their request for flexible work arrangements is declined by their employer.
Concerns for business
Attempts to expand the scope of flexible work arrangements and open employer refusals up to review are not new. The ACTU has sought to pursue such changes over the past decade through the four-yearly modern award review process in the Fair Work Commission.
The primary concern for employers around expanding access and allowing the Fair Work Commission to assess refusals, has long been that doing so would allow the Fair Work Commission to stand in the shoes of an employer and dictate when and how it can deploy its labour. Fundamentally, this would alter the paradigm under which businesses operate, by impeding the rights of employers to manage their own business in a productive and efficient manner.
What is the likely outcome of reform?
While many employers have embraced working from home and other flexibilities since COVID, the pandemic has brought with it significant challenges for many employers, and particularly for those who have sought to have employees return to the workplace.
Despite these challenges, it is highly likely that we will see changes to flexible work arrangements which tip the current balance in favour of employees.
Undoubtedly, we are likely to see more categories of employees added to those entitled to make flexible working arrangement requests, including those with responsibilities for the elderly and other family commitments.
It is also likely that we will see the introduction of a new mechanism that allows employees to appeal against an employer’s refusal of a flexibility request, including the potential ability for the Fair Work Commission to arbitrate disputes and impose a binding order on the parties.
These changes are likely to open the floodgates to far more requests for flexible working arrangements and subsequent challenges to any refusal to allow requested arrangements.
Whilst it currently remains to be seen, there is a chance reform in this area may also include changes which go even further, such as:
- a lifting of the bar for employer refusals above the current threshold of “reasonable business grounds”;
- the Fair Work Act being amended to align the flexible work arrangement entitlement with requirements under equal opportunity and disability discrimination laws by requiring employers to make reasonable adjustments for carers; and
- giving employees a unilateral right to revert to previous working arrangements after a flexible work request is accepted.
ABLA is working closely with the Australian Chamber of Commerce and Industry, Australian Business Industrial and Business NSW to contribute to discussions on reform in this area, in an effort to ensure that any reform in this space strike the right balance between giving employees access to important flexibilities that facilitate their participation in the workforce, while also ensuring that businesses can continue to meet their operational requirements and manage their workforces appropriately.