Flexible work arrangements: the dangers of refusing a reasonable request

In August’s HR Breakfast Club Forum, Dogu Yesildag of the Employment Law & Investigations team discussed the dangers of refusing an employee’s reasonable request for a flexible work arrangement (FWA).

Dogu discussed:

• When employees can request flexible work arrangements;
• The obligations of employers when considering them; and
• How discrimination issues can arise when refusing requests.

When can employees request flexible work arrangements?

Section 65 of the Fair Work Act 2009 (‘FW Act’) provides that employees may request a flexible work arrangement in ‘certain circumstances’, being circumstances where they are:

• Pregnant or returning to work after taking leave in relation to the birth or adoption of a child;
• A parent, or have responsibility for the care of a child;
• A carer;
• A person with a disability;
• 55 or older;
• Experiencing family and domestic violence;
• Providing care or support to a member of the employee’s immediate family, or a member of the employee’s household, who requires care or support because the member is experiencing family domestic violence.

Full-time and part-time employees may request a change if they have worked 12+ months for the same employer. Casual employees must have worked regularly and systematically for the 12 months and have a reasonable belief of continuing employment on that basis.

How should employers respond?

Employers must respond in 21 days to any flexible work arrangement request, stating whether the request is granted or refused. In case of a refusal, the employer must also set out the ‘reasonable business grounds’ for the refusal and details of the reasons.

Dogu emphasised that a refusal must be based on ‘reasonable business grounds’, such as those set out in section 65A of the FW Act, which includes (but is not limited to):

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

Additionally, recent amendments to the FW Act, as of 1 July 2023, provide that employers may refuse a request only if they have also:

• Discussed the request with the employee;
• Genuinely tried to reach an agreement with the employee about making changes to accommodate the employee’s needs; and

• Thereafter, failed to reach an agreement and had regard to the consequences of a refusal for the employee.

Under the amendments, an employee may apply to the Fair Work Commission if the employer fails to respond or refuses the request, and internal dispute resolution has failed. The Commission may make binding orders in relation to the flexible work arrangement request.

What constitutes ‘reasonable business grounds’?

In AMWU v Mildura City Council [2012] FWA 4308, an employee who was a single parent sought a flexible work arrangement to change his start and finish times by an hour so he could take his son to school. The employer’s reasons for refusal were deemed to be ‘reasonable business grounds’ because:

• Special work arrangements would be necessarily to transport the applicant to and from the work site.

• The applicant would be alone for the last hour of each day, without supervision or support in case of an incident or machine break down.

• The applicant would miss important weekly administrative and health and safety meetings.

The employee in Fyfe v Ambulance Victoria [2023] FWC 4 was a paramedic and mother of three who sought flexibility to work custom night shifts to allow her to care for her children. Ambulance Victoria (AV) did not try to meet with the applicant to discuss her request or offer any other forms of flexibility. AV claimed it did not have the capacity to offer bespoke shifts and that her request would not align with its ‘operational needs’. These were not ‘reasonable business grounds’ because the flexibility would actually satisfy some unmet needs in the community, amongst other things. Additionally, the justification that other employees may also request flexible work arrangements is not always a valid ground for refusal.

Discrimination issues arising from refusing flexible work arrangements.

Dogu flagged that employers must be careful not to discriminate, indirectly or directly, against employees when refusing flexible work arrangements. He ran through examples of circumstances that may constitute ‘discrimination’.

Dogu added that employers should familiarise themselves with the definitions of ‘indirect’ and ‘direct’ discrimination and the various protected attributes under ACT and Commonwealth discrimination legislation.

Towards the end of the presentation, Dogu discussed the case of Panazzolo v Don’s Mechanical and Diesel Service Pty Ltd [2023] FedCFamC2G 665, where an employer was found to have engaged in direct discrimination for refusing to allow a (temporarily) disabled employee to return to work without considering any reasonable adjustments to help accommodate the employee. Through this case, Dogu discussed how employers should be aware of their obligations towards their employees, even in cases where section 65 was complied with.

Closing remarks

Employers should familiarise themselves with the recent changes to flexible work arrangement requests and to consider each request on a case-by-case basis to minimise exposure to future litigation.

If you are a HR professional in the ACT and would like to attend future HR Breakfast Club forums, visit our monthly forum page and register to attend. If you have any questions or queries about a debt an employee owes you, a debt your employer alleges you owe, please contact the BAL Lawyers Employment Law & Investigations team on 02 6274 0999. For more information, see the Fair Work Ombudsman’s website.