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Flexible working arrangements – Employee’s right to request but is it a request that may prove too costly for an employer to deny?

Under s.65 of the Fair Work Act 2009 (“FW Act”), an employee has the right to request a change in working arrangements (eg. change in hours of work, change in patterns of work and change in location of work) where the employee:

(a) is a parent, or has the responsibility for the care of a child who is school age or younger;

(b) is a carer;

(c) has a disability;

(d) is 55 years of age or older;

(e) is experiencing violence from a member of the employee’s family; or

(f) provides 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 violence from the member’s family.

In a recent decision by the Federal Circuit Court of Australia, an employer, Roy Morgan Research Ltd (“Roy Morgan”) was ordered to pay a penalty of $52,000 for denying an employee (who held the position of Operations Director) her request to work flexible hours following her return from maternity leave, before making her position redundant.

Judge Jones determined that Roy Morgan took adverse action against its employee for a reason, which included the exercise of her statutory workplace right to take maternity leave and return to her pre-parental leave position.

Her Honour also ordered the employer to pay the employee $20,000 in compensation for its actions, by reason of the fact that the employee had suffered loss of enjoyment, reputation and distress experienced by the wake of her dismissal.

In addition, after fining the employer $52,000 for what Judge Jones described as “serious” contraventions, Her Honour ordered that the penalties be paid to the employee.

Judge Jones acknowledged in her decision:

… that community standards now recognise the distress and suffering an employee experiences when statutory rights are contravened by an employer.

Furthermore, Judge Jones held that:

… it is a fundamental entitlement of an employee to take (parental) leave to care for their child or children, safe in the knowledge that their employment and future will not be prejudiced because they have exercised their right to take (parental) leave, including to request flexible working arrangements.

Of significance in this case was that the employer had undertaken a company restructure and effected large scale redundancies, which included the position of Operations Director. Despite making this position redundant, the Company allowed another employee to continue to act in that same position of “Operations Director” for several months after it had effected her redundancy.  That same employee, acting in the role of Operations Director, was later transferred to a different role but continued to perform duties that formed part of the responsibility of the Operations Director position.

Judge Jones determined that the primary issue was that the employer had created an expectation that the employee would be redeployed upon her return from maternity leave. The employer’s failure to return the employee to her pre-parental position was a contravention of s.340(1) of the FW Act.

Her Honour espoused that this decision was aimed at acting as a deterrent to other employers, discouraging them from committing any future or similar contraventions.

Message for Employers

Employers must give valid and careful consideration to any request made by employees for flexible working arrangements.

Whilst an employee has the right to “request” flexible working arrangements, the employer may only refuse that request on “reasonable business grounds”. The phrase “reasonable business grounds” is not defined under the FW Act, but some examples (although not an exhaustive list) are set out in s.65(5A) of the FW Act. “Reasonable” will be a question of fact in each case.

As can be seen from this case, any failure to carefully consider an employee’s request for flexible working arrangements, without proper regard to the employee’s circumstances and the reasons for the request, may result in serious fines for the employer as well as serious reputational damage by virtue of any adverse decision made by the Court against the employer.

We recommend that all employers seek legal advice before refusing any request by an employee to work flexible working arrangements to help ensure the Company can demonstrate that proper consideration was given to both the circumstances surrounding the employee’s request and any refusal by the employer to such a request.