While many employees are seeking more flexible work arrangements, some employees can formally request a flexible working arrangement in accordance with the Fair Work Act 2009 (Cth) (“FW Act”). The categories of employees who can make a request under the FW Act are employees who are pregnant, parents, guardians or carer’s, employees who have a disability, are over 55 years old or are experiencing family or domestic violence (or caring for someone who is). An employer can only refuse a request made by an employee in one of these categories on reasonable business grounds. 

In a recent new amendment to the FW Act, employees who have their flexible working arrangement refused by their employer can make a claim to the Fair Work Commission (“FWC”). The FWC has a broad range of powers and can decide what the flexible working arrangement should look like. That’s what happened in this case and the FWC highlighted the importance of not just having reasonable business grounds for refusing a flexible work arrangement request but providing sufficient reasoning for the refusal. 

Background 

The employee was originally engaged to work full-time for the employer as a Clearance Classifier, but later changed to working part-time four days a week. Following a period of working from home during the COVID-19 lockdown, the employer directed all employees to return to work in the office at least two days a week. The employee continued to work two days from home and took leave for all office days.  

In response to the employer increasing the office days to three days a week, the employee made a flexible working arrangement request on the basis that he was a carer for his wife and children (who had various medical diagnoses). Multiple flexible working arrangement requests were made by the employee, which were refused by the employer, but the employer did offer that the employee could work from home three days a week and one day in the office.  

However, the employee refused to return to work, firm in his position that working entirely from home was the only arrangement that could accommodate his needs.  

In refusing the request the employer cited the company’s commitment to in person collaboration, the benefit of in person discussions, productivity, efficiency, the company’s hybrid working policy, and the need to balance digital and physical interaction.  

The employee did not believe there were any reasonable business grounds put forward and made a claim to the FWC. 

What did the FWC say? 

The FWC found that a refusal on “reasonable business grounds” requires the employer to demonstrate a likely detriment to the business. The FW Act sets out a non-exhaustive list of reasons that may constitute reasonable business grounds for refusing a flexible working arrangement, including that the arrangement is too costly, would result in loss in efficiently or productivity, or, have a negative impact on customer service. 

The employer had rejected the request partly because of the likely result of significant loss in efficiency or productivity. However, the employer had not actually detailed any detriment and the FWC was not satisfied that the employer provided an adequate explanation for why the request was refused on reasonable business grounds. The FWC said that if the employer was relying on a likely detriment to productivity and efficiency, it is required to be substantiated and “blanket HR answers are not sufficient alone to establish a reasonable business ground for refusing a request”. 

Despite the criticisms of the employer, the FWC made an Order requiring that the employee attend the office one day a week, and work from home three days a week. Further, if the employee missed working in the office for two consecutive weeks, then the employer could lawfully and reasonably request the employee work at the office on the days he was permitted to work from home.  

Takeaways for employers  

Flexible working arrangements are about balancing the genuine needs of an employee with the operational requirements of an employer. While employers need to engage with employees where a flexible working arrangement has been made under the FW Act, and genuinely attempt to reach agreement, they are entitled to reject a request where there are reasonable business grounds for doing so.  

However, if employers are going to refuse such a request on reasonable business grounds, it is important that they substantiate it and specify the likely detriment to their business, rather than providing a generalised “blanket” response.