Many workplaces throughout Australia employ individuals on flexible workplace arrangements. These arrangements are growing in popularity and give people the ability to better balance work and life as well as improve productivity through reduced fatigue and greater employee engagement and productivity. Recent changes to modern awards inserted by the Fair Work Commission now require employers to outline their reasons for refusing such a request in writing and may only do so on reasonable business grounds.
What are “reasonable business grounds”
A non-exhaustive list of reasonable business grounds are provided for in the Fair Work Act and include:
- that the arrangements would be too costly for the employer
- that there is no capacity, or it would be impractical, to change the working arrangements of other employees to accommodate the request
- 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 by the employee would be likely to have a significant negative impact on customer service
This list is an indication only and there may be many different reasons that employers will refuse a request. The Fair Work Commission will look to the reasons given as a whole to determine whether the refusal of the request has been reasonable. A recent decision of the Full Bench of the Fair Work Commission has shed some light on the way that “reasonable business grounds” are interpreted as well as what employers can argue if the dispute goes to the FWC.
Victoria Police v The Police Federation of Australia
In 2017, a 58 year-old senior Detective with the Victorian Police Force submitted a request for flexible working arrangements. The flexible arrangement requested by the officer was to perform 8 ten-hour shifts per fortnight as opposed to 10 eight-hour shifts. Victoria Police’ written refusal was based on the following reasons:
- That there would be less opportunity for the officer to work overtime and the longer shifts would pose fatigue risks for the officer
- That the approval of the request would encourage further requests an affect morale within the Detective’s unit
- That the request would impose financial burden on Victoria Police
The Fair Work Commission initially found in favour of the officer, and Victoria Police appealed on a number of grounds:
- That the Commission in the first instance did not give enough weight to the possibility of further requests,the loss of an officer for a day a week and loss of overtime
- That the Commission was able to consider grounds for refusal not communicated to the employee when his request was first denied
The Full Bench of the Commission held that while the loss of overtime and the resource of the Detective would involve some detriment to Victoria Police, these grounds were not sufficient to deny the request. In addition, any concerns relating to fatigue were anecdotal and did not have sufficient evidence to support them. They also found that Victoria Police were not entitled to bring up issues that were not originally communicated in writing to the officer when denying the request.
Lessons for employers and employees
The case sheds light on a number of elements of the reasonable business requirements:
- Employers must be emphatic when outlining the reasons for their refusal of a flexible working request;they will only be able to argue on the reasons they raised in writing with the employee at the time of the request.
- The reasonable business requirements is a threshold test and will involve the consideration of a number of factors, some of which may be more persuasive than others, to appreciate the effect on the business as a whole.
- The purpose of the provisions in the Fair Work Act and the Modern awards is to confer benefits on employees. Accordingly, Full Bench of the Commission held that the wording of the provisions “indicates a high degree of adverse impact required to be shown to justify an employer’s [refusal]” (at paragraph 22).
The message to everyone involved in flexibility requests is that communication is crucial and that both employers and employees should be clear about their expectations and situations. Employers need to think seriously about their reasons for refusing a flexibility request and may only rely on those given to the employee in writing should the matter proceed to arbitration.
Employees should formally exercise their right to request flexible working arrangements pursuant to s.65 of the National Employment Standards. More information on flexible working Requesting flexibility
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