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Flexible Working Arrangements: Enhanced Opportunities for Employees, and new Fair Work Commission jurisdiction. Part 2 of 2.

Published on May 1, 2023 by Peter PunchPeter Punch

Introduction

This is the second part of an article that discusses the very substantial changes to the law relating to flexible working arrangements that were enacted in December 2022[1] and which will commence operation on 6 June 2023.

The first part of the article, published on 21 April 2023, summarised the previous law on this subject and then explained the new law’s extension of the categories of employees who can request flexible working arrangements.

This second part explains the new procedural rights of employees, which will enhance the opportunity for employees to achieve more flexible working arrangements, and then goes on to discuss the much expanded jurisdiction of the Fair Work Commission (“FWC”) to conciliate and arbitrate disputes between employees and employers over these matters.

As explained in the first part of this article, the amendments made by the SJBP Act to Division 4 of Part 2-2 in Chapter 2 of the Principal Commonwealth workplace law statute[2] amend Section 65 of it and introduce new Sections 65A, 65B and 65C. The amendments to Section 65 were discussed in the first part of this article; this second part looks at the three new sections.

Enhanced opportunity for eligible employees to obtain flexible arrangements

Section 65A replaces the previous provisions of the FW Act relating to requests for flexible working arrangements (Section 65 (4) to (6)). It replicates much of the previous content of Section 65 but enhances the prospects of an employee obtaining flexible arrangements in any particular case by a combination of measures, summarised as follows:

• Absent the employer granting an eligible employee’s request as made, the employer must, before refusing the request, discuss the request with the employee and genuinely try to reach agreement with the employee about making changes to the employee’s working arrangements that accommodate the circumstances that apply to the employee.
• If such discussions result in the parties agreeing to a change to the employee’s working arrangements that differs from that set out in the employee’s request, the employer’s response must set out the agreed change;
• If the parties have not reached agreement and the employer has had regard to the consequences of the refusal for the employee, the employer may only refuse the request on reasonable business grounds and must do so within 21 days of receiving the original request;
• While the instances of what might be “reasonable business grounds” to justify an employer refusing an employee’s request (Section 65A (5)) are the same as before found in Section 65 (5A), the employer who does refuse a request must give a written explanation in accordance with the requirements of Section 65A (6).
• New Section 65A (6) will require an employer refusing a request for flexible arrangements to not just “detail the reasons for the refusal” (previous Section 65 (6)) but also set out the particular business grounds for refusing the request, explain how those grounds apply to the request and, if applicable, set out what other changes the employer could make to the employee’s working arrangements that would to any extent accommodate the circumstances leading to the employee’s request.

These are substantial procedural changes that are clearly designed to enhance the prospects of an employer granting the employee’s request, or at least granting some change that can partially accommodate their circumstances. Further comments on the impact of these changes are made below.

New FWC powers, including arbitration of disputes

New Sections 65B and 65C can be dealt with together and summarised as follows.

If an employer refuses an employee’s request for flexible working arrangements, or fails to respond in writing to such a request within 21 days of it being made, the procedures in Sections 65B and 65C are thereby activated. Initially the parties must try to resolve their dispute between then by discussions, but in the event of no resolution being achieved either party may refer the dispute to FWC. In that event, FWC is obliged to deal with the dispute, using all its regular powers of conciliation and mediation, but it also may if it thinks fit to resolve the matter by arbitration in accordance with Section 65C.

Parties may be supported and/or represented in such FWC proceedings by “a person” or an industrial association, but lawyers are only permitted to do so if FWC grants permission under Section 596 (which limits legal representation to certain defined circumstances that usually would not apply in a dispute of this type). The reference to “person” is presumably to an individual who is neither a lawyer or paid agent, such as a friend or relative acting without fee.

Sub section (1) of new Section 65C confers a number of options on FWC when it moves to the arbitration stage. These include ordering that the grounds upon which the employer has refused the employee’s request are either reasonable business grounds or not reasonable business grounds, or ordering that the employer give the employee a written response to the employee’s request, or ordering that the employer either grant the request or make specified changes in the employee’s working arrangements (other than the requested changes) to accommodate to any extent the employee’s circumstances. However FWC’s arbitration jurisdiction is subject to three important limitations:

i) It must not make an order that would be inconsistent with the provisions of the FW Act or a term of a fair work instrument that applies to the employer and employee (Section 65A (2A));

ii) It must not make an order granting the employee’s request or make other specified changes in the employee’s working arrangements unless it is “satisfied that there is no reasonable prospect of the dispute being resolved without the making of such an order” (Section 65A (3)); and

iii) In making an order FWC must “take into account fairness between the employer and the employee” (Section 65A (2)).

Concluding comments on reforms to flexible working arrangements provisions

Flexible working arrangements are an increasingly common feature of Australian work places, particularly since the COVID-19 pandemic forced many employers into directing employees to work remotely or at home. The phenomenon was recognised as a growing trend from the early years of this Century, with that recognition being confirmed by the introduction of a limited right of employees to request flexible working arrangements as part of the National Employment Standards in the FW Act from 2010 onwards.

However, and partly as a reflection of workplaces’ trends and employees’ escalating preference for flexible work, the amendments to the FW Act by the SJBP Act in this area take the right to request flexible working arrangements to a new level. They do so in two ways:

• first, the right of some qualified employees now found in a number of modern awards to require employers to in effect positively negotiate requests for flexible working arrangements with them is extended to all such qualified employees covered by the FW Act; and
• second, the conferral of an extensive jurisdiction on FWC to deal with disputes over requests for flexible arrangements, including a last resort power to arbitrate such disputes, will act as a powerful incentive to employers to carefully respond to such requests and not to blithely reject them – that is, they will be doing so in the knowledge that the FW Act now encourages them to try to reach agreement with the employee on the issue and exposes them to the risk of the imposition of a result on them by FWC if they do not reach agreement before arbitration.

 

P J PUNCH