How Fair is Flexible? FWC Rules on its First Flexible Working Arrangements Order

Employment Law: 04 October 2024

Author: Stephen Curtain, Imogen Timms - Our People

An employment law buzzword that assumed a greater prominence in the aftermath of the COVID-19 lockdowns and working from home arrangements was “flexible” working.

But, in a world where the alignment of individual employees’ desire for flexibility and business needs is critical, the issue for employers is how best to create an environment that keeps employees happy and optimises organisations’ functionality?

Coming into force in June 2023, the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (the Amendment) amended employee’s rights to request flexible working arrangements.

Previously, s 65 of the Fair Work Act 2009 (Cth) contained a relatively simple framework for parents and carers who had been working on a long-term basis to request flexible work arrangements. The Amendment now provides greater reasons for an employee, beyond those with caring responsibilities, to request flexible work arrangements.

S 65 of the Fair Work Act permits a full-time or part-time employee who has worked on a continuous basis for 12 months with the same employer to request a change in their working arrangements, such as hours of work, patterns of work and location of work, provided they meet the criteria below.

The same applies to casual employees who have completed 12 months of continuous service with the employer or who have been employed for a regular sequence of periods of employment across a period of 12 months and have a reasonable expectation of that their employment will continue on a “regular and systemic basis” may apply for flexible work arrangements.

The criteria to be met are employees who are one of the following:

• pregnant;
• a parent with the responsibility for the care of a child of school age or younger;
• a carer with the meaning of that term in the Carer Recognition Act 2010;
• has a disability;
• 55 years or older;
• experiencing family and domestic violence; provides care or support to a member of the employee’s immediate family or a member of the employee’s household who requires care and support as the member is experiencing family domestic violence; or
• a parent or has the responsibility for the care of a child and is returning to work after taking leave in relation to the birth or adoption of a child.

The request must be in writing and set out details of the changes sought and the reasons for the change. Variations could include a change of hours of work, location of work or patterns of work.

The employer must respond to the request in writing within 21 days of receipt of the request. The response may either agree to the request or, after discussion with the employee, agree to specified changed working conditions that differ from the request.

Alternatively, the response may reject the request provided the employer has discussed the request with the employee and genuinely attempted to accommodate the employee’s request and the refusal is on reasonable business grounds as specified below. Such a refusal must be accompanied by detail of the reasons for the refusal, which must be within the reasons set out below, and either set out the changes that would be acceptable or state that no changes would be acceptable.

An employer can rely on any of the following bases to reject an employee’s request:

• the proposed arrangements would be too costly for the employer;
• there is no capacity to, or it would be impractical to, change the working arrangements of other employees or recruit new employees to accommodate the changes sought; or
• the proposed changes would be likely to result in a significant loss of efficiency or productivity or have a significant negative impact on customer service.

Where a request is refused, the employer must explain the grounds of refusal including any business grounds relied on and how they apply to the request, and set out any changes the employer would be prepared to make to accommodate the employee’s proposed changes.

The response must include the options of referring the matter to the Fair Work Commission for conciliation or arbitration.

Case

On 12 July 2024, Deputy President Lake of the Fair Work Commission handed down the Commission’s first order for flexible working arrangements.

The Applicant, an employee of FedEx, challenged his employer’s rejection of his request for flexible work conditions. The full-time employment commenced in 2015.

In June 2019, FedEx accepted the first request to decrease the Applicant’s hours to four days a week, with all hours to be completed in the office. As COVID-19 swept across the nation, FedEx directed all employees to complete all their hours from home. From March 2022, the Applicant’s hours increased slightly on a permanent basis, all still to be worked from home.

In August of the same year, FedEx directed the Applicant to return to the office two days a week as lockdown restrictions eased. Simultaneously, FedEx issued a memo stating that it would be utilising a hybrid work model, which included a mandatory two days in the office for employees.

The motivation for this directive was said to be to facilitate “valuable in-person dialogues, collaboration meetings and team engagement to resume.” The Applicant attended the office for two days each week in accordance with the direction between September 2022 and July 2023.

In late June 2023, FedEx updated its hybrid work model and requested a minimum three-day attendance in the office each week, which included part-time employees.

In mid-July of the same year, the Applicant requested to work from home for three days each week and attend the office for one. The Applicant cited a number of reasons for this request, including his extensive care responsibilities for his two intellectually disabled teenage children who have autism spectrum disorder and are home-schooled. The Applicant’s wife, who also has autism spectrum disorder, depression and anxiety, had been diagnosed with Ehlers Danlos Syndrome, which compromises her motor function.  

In his reasons for requesting the change to his employment, the Applicant wrote, “while I am working from home I am able to cook breakfast as coming into the office add an extra ½ hours travel time to my day. I am able to support [my wife’s] wellbeing… I am also able to support my wife as we cannot leave our 13-year-old unattended, not even for 10 minutes to run up to the shops and my daughter often struggles to leave the house with us… some days it’s impossible to leave the house”. The Applicant provided several reports and letters from doctors, dating variously from 2013 until 2023, to explain his wife and children’s conditions.

The Respondent rejected the Applicant’s request of July 2023, on the basis of business and operational needs and cited the encouragement of in-person interactions that could only occur in the office environment.

Eventually, it was agreed that the Applicant would come into the office two days a week and work from home two days. However, the working from home model didn’t suit the Applicant and he began using his accrued annual leave on one of his requisite office days each week between 2 August 2023 until 18 September 2023.

After a period of unpaid leave from September 18 onwards, the Applicant lodged a request in early 2024 to work from home all four days of his work week. In his reasons, he noted that he and his wife were “struggling” and provided another doctor’s letter about his children’s conditions.

After back-and-forth correspondence and a meeting with the Applicant, FedEx rejected the request to work from home entirely, noting its desire to facilitate in-person collaboration, its updated work from home policy and that the Applicant’s travel time was not unreasonable.

The Fair Work Commission stepped in to resolve the dispute after attempts to resolve the disagreement were fruitless.

The Commission found that the application was validly made within the requirements of ss 65, 65A and 65B of the Act. Commissioner Lake observed the “mischief” of the wording of 65A, which compels an employer to reject a request “only if” the employer has discussed the matter with the employee, genuinely attempted to reach an agreement and the refusal is established on fair business grounds.

The Commission reiterated that employees must follow the lawful and reasonable requests of their employer in the absence of their request being determined.

Commissioner Lake also noted the increase of the Applicant’s carer responsibilities which emerged over the course of the hearing. However, the Commission stated that this new information hadn’t clearly been put to FedEx in the course of considering his request. Further, the information provided by the Applicant didn’t particularise what his carer responsibilities entailed and how it impacted his ability to work in the office.

The Commission found that FedEx did not substantiate the business grounds in enough detail, especially regarding productivity, in their rejection of the request. It held that “generic and blanket HR answers are not sufficient alone to establish a reasonable business ground for refusing a request.” Moreover, FedEx failed to adequately consider the employee’s personal situation.

The Commission is empowered by s 65C to make an order regarding flexible working arrangements where there is no “reasonable prospect” of the dispute being otherwise resolved.

The Commission ordered a three-month trial of the Applicant working from home three days a week and attending the office for one day a week. It empowered the Respondent to direct the Applicant to attend the office on a permitted working from home day if he otherwise had not attended the office for two weeks and there were concerns about his performance or operational requirements that required his attendance.

So, what does this mean for employees and employers?

In short, generic statements about workplace flexibility are one thing but employers must not only pay credence to an individual’s particular circumstances but must also provide detailed and valid reasons to reject a request.

Employees should also provide comprehensive reasons and justifications for any requests to vary their work conditions. They must also follow all reasonable and lawful directions of their employer whilst they wait for a response to their request for flexible arrangements.

Navigating the new and ever-changing flexible work territory can be fraught. If you’re an employee or employer in need of advice to chart this bumpy terrain, give Aitken Partners a call on (03) 8600 6000 or contact us online.