Assessing reasonable business grounds to deny a request for a flexible work arrangement
The National Employment Standards (NES) of the Fair Work Act 2009 (Cth) (FW Act) provide for an employee’s right to request flexible work arrangements from their employer on certain grounds. An employer may only refuse a request on reasonable business grounds.
What are reasonable business grounds?
The Fair Work Commission (FWC) has ruled that there needs to be an objective basis for the grounds to refuse a request for a flexible work arrangement.
Managers must weigh the personal circumstances relied upon by the employee against the extent of cost and impact on the business of allowing the request. Since almost all requests will result in some cost from the proposed arrangement, it will generally be insufficient for an employer to simply point at cost as being a reason for refusal. Instead, the employer must point to some cost over and above what may be regarded as inevitable small adverse impacts.
The reasonableness of the grounds is to be assessed in the circumstances that apply when the request is made. Reasonable business grounds may include:
- the effect that approving the request would have on the workplace and the employer’s business, including the financial impact and the impact on efficiency, productivity and customer service;
- the inability to organise work among existing staff; and
- the inability to recruit a replacement employee, or the practicality or otherwise of the arrangements that may need to be put in place to accommodate the employee’s request.
Case study: Police Federation of Australia (Victoria Police Branch) v Chief Commissioner of Police (2022)
The FWC dealt with a dispute concerning a request for a flexible work arrangement on behalf of a police constable. The constable requested his hours be changed from 8 hours per day, 40 hours per week to 10 hours per day, 40 hours per week, with Monday, Tuesday and Sunday being permanent days off. The request was made to meet caring responsibilities concerning the constable’s wife and primary school-aged children.
The employer claimed it had reasonable business grounds to refuse the request, namely:
- staffing shortages;
- that 10-hour shifts might lead to potential fatigue and health and safety risks; and
- that the constable’s wife was planning to go back to work starting as light duties this year.
The FWC accepted that the employer’s operations were currently experiencing a significant staffing shortfall, and this was a relevant matter to assess a flexible work request that would result in the loss of further shifts (even if that loss is just two shifts in a much larger number). The FWC was satisfied that these circumstances were sufficient as a reasonable business ground for refusing the request.
If a flexible work arrangement would result in an employee being unable to perform useful or productive work for a meaningful portion of their proposed work pattern, the FWC considered this would usually be a reasonable business ground to refuse a flexible work arrangement request. In this case, the FWC ruled the proposed roster pattern would have this result.
Secure Jobs, Better Pay Bill
If the Secure Jobs, Better Pay Bill’s amendments to the FW Act take effect, there will be a new procedure for employers to deal with requests for flexible work arrangements, namely:
- as is currently the case, the employer must respond to a request for a flexible work arrangement within 21 days of receipt, stating whether the employer grants or refuses the request;
- the employer may grant an alternative flexible work arrangement to what was initially requested by the employee, provided the employer and employee discuss the request and agree to the change to the employee’s working arrangements;
- an employer would only be able to refuse a request for a flexible work arrangement if the employer has discussed the request with the employee and genuinely tried to reach an agreement with them about making changes to their working arrangements that would accommodate their circumstances. Refusal of the request is only possible where the employer and employee have been unable to reach agreement, the employer has had regard to the consequences of the refusal for the employee and the refusal is based on reasonable business grounds; and
- where an employer refuses a request, the employer must give the employee a written response:
- detailing the reason for the refusal, including how the particular business grounds being relied on apply to the request;
- setting out other changes to the employee’s working arrangements that the employer is willing to make and which would accommodate the employee’s circumstances, or stating that there are no such changes the employer is willing to make; and
- providing information on the capacity of the FWC to resolve disputes about the request.
The Bill will also empower the FWC to deal with disputes where an employer refuses an employee’s request or does not respond to the request within 21 days. The FWC can arbitrate a dispute and order the employer to grant the request or consider alternative arrangements. Contravention of that order will attract civil liability, including potential imposition of a penalty.
The Bill will expand the circumstances in which an employee may request a flexible work arrangement to where a member of the employee’s immediate family or household, experiences family or domestic violence. Currently the NES confines the right to request to where the employee is experiencing violence from a member of the employee’s family, or provides care or support to a member of their immediate family or a member of their household who requires care or support because the member is experiencing violence from the member’s family.
Learn more about flexible work arrangements
Find out more about flexible work arrangements in the Employment Law Practical Handbook’s recently updated chapter Flexible work arrangements.
This chapter will walk you through who is legally entitled to request flexible work arrangements, types of flexible work arrangements you may implement and how to introduce them in your workplace. It includes several templates that you can adapt to use in your workplace, including a Flexible Work Arrangement Policy.
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