Published 21 February 2022
For many of the world’s traditional nine-to-five ‘office workers’, COVID-19 has fundamentally changed the concept of the workplace. For many employers, this has been an opportunity to explore and embrace technologies and remote work practices to unprecedented levels. For many employees, remote working has become the new ‘norm’, and an expectation therefore that jobs will include at least a partial ‘working from home’ component, has become standard.
As the NSW government has announced an end to the current COVID-19 working from home directions from this week, many employers are identifying the new ‘normal’ as the way forward. However, many others are seeking a return to full office participation, in line with pre-COVID-19 expectations. In this context, while it is useful to debate the new conceptions of ‘best practice’, it is also essential to consider what are the underlying legal requirements, procedures, and employment best practices relating to ‘flexibility’ at work.
While there has been a steady increase in flexible work and evolving work practices over the last decade, partly due to technological developments, it is undeniable that the way that many businesses operate and the way we work has changed even more significantly over the past two years due to the COVID-19 pandemic. A recent survey by the Australia Bureau of Statistics (ABS) of Working Arrangements found that 41% of employees regularly worked from home in August 2021, up from 32% in 2019.
COVID-19 and public health orders directing work from home meant that businesses and employees had to adapt quickly, and flexible work arrangements were unavoidable. Now that these public health orders have been lifted, there are no longer any requirements that employee’s work from home. However, employee demand for flexible work, in particular work from home, remains. Another ABS Survey, the ‘Household Impacts of COVID-19 Survey’ released in February 2021 showed that 42% of employed Australians wanted the amount of work from home to stay the same and 14% wanted the amount of work from home to increase. This increased demand is a contributing factor to what is being referred to in the United States as ‘the Great Resignation’, where millions of Americans voluntarily resigned from their jobs, and many sources are claiming that this trend will continue to Australia. In response, it is important that employers are aware of the legal baseline that remains in relation to flexible work.
National Employment Standards
When an employer deals with (a) a request to work under flexible arrangements and (b) with the implementation of such request, two important issues must be considered:
- the requirement to consider and properly respond to a request; and
- an employer’s obligation to ensure remote working is performed safely.
Who can make a request for flexible work arrangements?
For many, the term ‘flexible work’ has become synonymous with family and parental responsibilities. However, it is important that employers understand that an employee’s entitlement to flexible work arrangements under the Fair Work Act 2009 (Cth) (the FW Act) is based on a wider set of circumstances.
To be entitled to make a request for flexible work arrangements under section 65 of the FW Act, an employee must fall into one of the categories defined in the section. These include a person who:
- has a child of school age or younger (this includes all school aged children, including 17 and 18-year-olds attending high school);
- is a carer;
- has a disability;
- is over 55 years of age; or
- is experiencing violence from a family member or is providing care or support to an immediate family or household member who is experiencing such violence.
If any of the above circumstances apply, the employee may request a change in their working arrangements relating to those circumstances.
To be entitled to make a request under section 65, a permanent employee must have completed at least 12 months of continuous service with the employer. For casual employees, they must be employed on a regular basis, for a sequence of periods of employment of at least 12 months, and they must have a reasonable expectation of continuing employment on a regular and systematic basis.
How should the request be made?
The request for flexible work arrangements must be in writing. The request must set out the details of the changes sought and the reason for the requested change.
An Employer’s Response
An employer must respond to an employee’s request, in writing, within 21 days of receiving the request. The written response must indicate whether the request has been accepted or denied. If the request is denied, then reasonable business grounds must be given for the denial, such as the proposed arrangement being too expensive, damaging customer service or teamwork, or causing difficulties for other employees. The expenses involved with complying with work health and safety obligations are also relevant.
It is important that employers are aware that, for modern award covered employees, many modern awards, including the Clerks – Private Sector Award 2020, contain additional provisions relating to requests for flexible working arrangements. If an award covered employee requests flexible working arrangements, employers should review the applicable modern award and ensure compliance with any additional requirements.
The reasonableness of an employer’s response will depend on their subjective circumstances. It is not an objective assessment. The COVID-19 pandemic drastically changed the way that many workplaces conducted their business, with many flexible working arrangements being adopted. This may result in a change in what would be considered ‘reasonable business grounds’ for rejecting a request. Employees may be able to point to flexible work arrangements that were adopted during the pandemic and claim that it is reasonable for these to continue. For example, if an employee worked from home during the COVID-19 lockdowns, without any significant negative impacts on the business, it might not be reasonable for an employer to deny their request to work from home as part of a flexible work arrangement. On the other hand, just because an employer had to accommodate work from home during the COVID-19 lockdowns, it does not necessarily mean that those arrangements were positive for the business and should continue now that restrictions have been lifted.
For instance, in the recent decision of Hair v State of Queensland (Queensland Health)  QIRC 422, the Queensland Industrial Relations Commission held that a Human Resources Advisor’s request to work from home full time was lawfully denied because the decision was made on reasonable grounds. The employee argued that in her last performance review, she was said to have met and exceeded all leadership standards and that she had successfully worked from home full-time during the COVID-19 pandemic. Nevertheless, the employer said that the role, by its nature, would require face-to-face contact at times. In making her decision, the Industrial Commissioner referred to the position description for the role and flexible work policies that clearly outlined that remote work may not be practical for all roles. The Commissioner added that despite the performance of the employee during the COVID-19 pandemic being exemplary, it was ‘fair and reasonable’ to determine that the role required in-person attendance.
Further, the extent that an employer has existing flexible work arrangements in place for other employees will dictate its ability to accommodate later requests. Therefore, it is important to ensure that flexible work arrangements have a timeline for regular review to allow flexibility.
An employer’s failure to comply with the procedure set out above can incur a penalty of up to $33,000. In Stanley v Service to Youth Council Incorporated  FCA 643, despite an employer having been found to have unintentionally contravened the procedure and showing contrition, it was still fined $4,000.
The Full Bench of the Fair Work Commission provided guidance on the scope of ‘reasonable business grounds’ in Victoria Police v The Police Association of Victoria  FWCFB 305. A 57-year-old detective, who had served the Victoria Police for over 30 years, had had his request to work a four-day-week rejected, on the grounds that overtime and recall to duty were inherent requirements of his role and it would place a financial burden on Victoria Police. The Fair Work Commission accepted that the employee’s proposed flexible work arrangement would, to some degree, curtail his ability to work overtime but this ‘was not a strong enough ground on its own.’ In addition, the Victoria Police failed to produce objective evidence of its unreasonable financial burden. The Full Bench found that granting the flexible work arrangement would not have had a significant and adverse impact on Victoria Police and it therefore had no reasonable business grounds to reject it.
Work Health and Safety Considerations
Work Health and Safety legislation does not differentiate between the official workplace and other places where employees are approved to carry out work. If an employer has an employee who has been approved to work remotely from home, the employer needs to consider the health and safety implications of this work area.
In Hargreaves and Telstra Corp Ltd  AATA 417 an employee of Telstra who twice fell down the stairs in her home was awarded compensation for medical treatment as well as weekly compensation. On the first occasion, Ms Hargreaves, who worked from home two days a week, was coughing violently as she went downstairs in her socks to get cough medicine. On the second occasion, she fell while descending the stairs to lock her front door, as instructed by Telstra after an earlier burglary at her property. Both of these falls were held to have occurred while Ms Hargreaves was carrying out her work.
If an employer considers allowing an employee to work from home, a work health and safety audit should be conducted to ensure that reasonable steps are taken to avoid risks to health and safety when work is carried out. Some common health and safety risks in the home include trip hazards from wires, back injuries from unsuitable office equipment and safety hazards such as potential fires from excessive clutter on or around office equipment. In most instances, this audit can be performed by the employees themselves.
We advise our clients that in any circumstances where employees work from home, an employer should have both a Work From Home Policy in place, as well as a Work From Home WHS Checklist, to ensure that any hazards have been identified and resolved.
Individual Flexibility Agreements
There is often confusion between a request for ‘Flexible Work Arrangements’ under the FW Act, and an ‘Individual Flexibility Agreement’ made under a Modern Award, enterprise agreement or other registered agreement. These are separate legal concepts, although they are sometimes related.
Under an Individual Flexibility Agreement (IFA), an employer and employees covered by an industrial instrument (such as a modern award, enterprise agreement or other registered agreement) may agree to change the effects of certain clauses of these industrial instruments. For example, an employer and employee may agree, via an IFA, to vary a clause about the employee’s working hours, or their entitlement to overtime or penalty rates, if that accommodation is to provide flexibility to the employee. Importantly, an IFA must not be used to reduce an employee’s entitlements. The IFA must leave the employee ‘better off over all’, with consideration and comparison of both the financial and non-financial benefits to the employee than if it were not in place.
IFAs are different to flexible working arrangements, as both parties must freely agree to an IFA. Whereas an employer must agree to an employee’s request for flexible working arrangements if they satisfy the requirements under the FW Act and there are no reasonable business grounds to deny the request. Further, an IFA is only required where the arrangement would be inconsistent with a term of the industrial instrument. If a request for flexibility is not inconsistent, then an IFA will not be necessary. However, it is critical for employers to note that if an employees request for Flexible Work Arrangements under section 65, has the effect of the employee working outside the terms of the relevant agreement or award, then an IFA will need to be considered. For example, an employee wishing to finish early on a Friday for family reasons, and make up the relevant hours in lieu on a Sunday, may impact the requirement to pay penalty rates. An IFA will need to be used in this circumstance.
It is also a useful reminder to consider that not all award or agreement terms are ‘financial’ in nature. Terms dealing with issues such as minimum engagements, ordinary hours, meal breaks, and breaks between shifts, all may be affected by requests for flexible arrangements.
There are strict requirements regarding the implementation, form, and termination of an IFA, so employers should ensure that they consult with the applicable industrial instrument, and seek advice where necessary.
Pros and Cons
Flexible arrangements can offer real benefits for employers, but potential drawbacks should also be considered, and steps taken to avoid or mitigate them.
The positives for employers include savings in overheads such as rent, office equipment and electricity, resulting from smaller or more shared workspaces. Flexible arrangements can also make a business more attractive to valued employees.
On the other hand, employers can find it more difficult to engage with, and reap some positive benefits from, employees who work under flexible arrangements. The benefits of shared learning can diminish when more experienced employees are the ones more likely to take up flexible options, and thus, spend less time face to face with a team.
Flexible arrangements can also stymie good teamwork and result in increased employee grievances, if not managed appropriately. Requiring a fixed number of days working in the office along with effective communications with remote or part-time workers can be of real benefit.
By and large, employers are embracing employee flexible working options which technology allows them to do. While these arrangements can have real advantages, businesses need to keep the legal issues firmly in mind and work proactively to overcome some of the drawbacks of employees working apart.
When considering and implementing flexible work arrangements, it is important that employers carefully assess the risks and liabilities that may arise due to these new arrangements. Employers should consider whether the flexible work arrangements affect employee entitlements. For example, does the arrangement allow for an employee to work outside of ordinary hours and attract penalty rates?
If these arrangements impact entitlements, employers and employees may benefit from referring to the applicable industrial instruments and considering Individual Flexibility Agreement’s for employees to vary these entitlements.
Our team is available to assist drafting your Work From Home Policy, Work From Home WHS Checklist, Flexible Work Policy, or Individual Flexibility Agreements. We can also help you respond to requests for flexible working arrangements, including consideration of your reasonable business grounds, and provide advice on your obligations under the FW Act and modern awards.
We also discuss Flexibility At Work in our latest podcast. Click here to listen.
The content of this publication is general in nature and provides a summary of the issues covered. It is not intended to be, nor should it be relied upon, as legal or professional advice for specific employment situations. PCC Employment Lawyers recommend that specialist legal advice should be sought about specific legal issues.