Following the commencement of new provisions of the Fair Work Act 2009 (FWA) on 6 June 2023, employers now need to ensure that do more than simply refuse a request for a flexible working arrangement by briefly citing ‘reasonable business grounds’.   The new provisions introduce a thorough process  that employers must follow, an obligation to genuinely attempt to reach agreement with the employee and a means for the employee to enforce their rights.

While the time frame for a response to a request for a flexible working arrangement (21 days) has not changed, employers now need to ensure that their written response to a request includes one of the following statements: that the request is granted; that following discussions there is agreement to a change in working arrangement which is different to what was requested; that the request is refused, with reasons given and reference made to specific ‘reasonable business grounds’ they relate to.  The response must also explain the effect of new provisions (sections 65B and 65C) which allow an employee to notify a dispute to the Fair Work Commission (FWC) and outline the orders which the FWC can make.

An employer is only able to refuse a request (s.65A) if: they have discussed the request with the employee; they have genuinely tried to reach an agreement with the employee; agreement has not been reached; the employer has had regard to the consequences for the employee of refusal; and, the refusal is on reasonable business grounds.

What is ‘reasonable’ is determined by reference to the specific circumstances of the employer (including its nature and size).  They may include: that the request is too costly; that the employer has no capacity to change the working arrangements of other employees to accommodate the request; that it is impractical to change the working arrangements of other employees or recruit new employees to accommodate request; that the requested arrangement is likely to result in significant loss in efficiency or productivity; and, that the requested arrangement is likely to have a significant negative impact on customer service.

Employers and employees are expected to try to resolve any dispute between them.  If the matter is not resolved, either party may notify the matter to the FWC (s.65B).  Other than in exceptional circumstances, the FWC must deal with the matter other than by means of arbitration in the first instance (e.g. conciliation, recommendation, opinion).

If and when the matter is the subject of arbitration, the FWC must take fairness between the parties into consideration before making an order (s.65C).  An order may only be made if there is no reasonable prospect of the dispute being resolved without the making of an order (s.65C).

If no response to a request is given by the employer, it will be treated as a refusal.  Where there is a refusal, the FWC may make an order that the grounds for refusal are reasonable business grounds or are not reasonable business grounds (s.65C).  If there has been no response or one that is not adequate, the FWC may order that the employer take such further steps as it considers appropriate (s.65C).  The FWC can order the employer to grant the request or make specified changes to accommodate, to any extent, the circumstances.

Contravention of an order by the FWC can potentially result in a Court imposing a penalty of up to 60 penalty units ($16,500).

An individual who is ‘knowingly concerned’ with a contravention of an order of the FWC (and any other civil remedy provision of the FWA) may be held to have accessorial liability (s.550).

Employers need to ensure that their policy and procedure in relation to flexible working arrangements is compliant with the new provisions.  Devine Law at Work can assist you with this.