One Minute Summary

• The Fair Work Act is very prescriptive in respect to how flexible work arrangement requests are made and even more so in how employers must respond to them.
• Where an employer refuses a request, the response must be quite comprehensive. Don’t miss any steps.
• In this Appeal decision the Commission appears to be adding extra requirements to those listed in the Act, on how employers must formally respond to an employee’s request.
• Employers need to give close consideration how the refusal of a request will impact an employee. They must discuss this with the employee and include it in the formal written response to them.

While still on parental leave Ms Naden approached her employer, Catholic Schools Broken Bay, in September 2024 to request to return to work in 2025 on a part time basis to assist in balancing her work commitments and parental responsibilities. She requested a flexible working arrangement working 3 days per week for terms 1 and 2 and then returning to full time hours from term 3.

Ms Naden had been employed as a teacher since 2016 and, in a dual role of being a teacher (50%) as well as being employed in an Executive capacity as Religious Education Coordinator (REC) from 2023 prior to proceeding on parental leave.

Section 65 of the Fair Work Act(2009) enables an employee to request a flexible working arrangement where the employee is a parent, or has responsibility for the care, of a child who is school age or younger.

Section 65A(3) then sets out when an employer may refuse a request for flexible working arrangements where all the following have been satisfied:

• the employer has held discussions with the employee and genuinely tried to reach agreement about the request for flexible working arrangements;
• those discussions have not resulted in agreement;
• the employer has had regard to the consequences of the refusal for the employee; and
• the refusal is on reasonable business grounds.

Each of the above points must be appropriately addressed by an employer when considering a flexible work request.

After extensive consultation with Ms Naden, the employer refused her flexible work arrangement of three days per week. The response stated that while it was possible to work part-time in her role as a teacher, she could not do so in her REC role. This was based partly on policy which stated that teachers in an Executive role could not work part-time.  The employer also argued that the part-time arrangement requested by Ms Naden would adversely affect student wellbeing as well as the workload of other staff. There would also be an increase in costs and reduce the leadership capacity of the school.

Ms Naden referred the dispute to the Fair Work Commission arguing the employer had failed to agree to her request for flexible working arrangements as provided for in the Fair Work Act. When discussions did not reach an acceptable conclusion, the matter was determined by arbitration.

In the initial decision the Commission agreed with the employer that there were reasonable business grounds to refuse the flexible work request.

Ms Naden did not accept the Commission’s initial decision and lodged an Appeal.

In examining the grounds of the appeal, the Full Bench rejected all but one ground of appeal. This ground was over the employer’s failure to consult under S.65A(3) including that it failed to consider the consequences of its refusal of a flexible working arrangement on Ms Naden.

Section 65A(3) imposes a positive action on the employer to consider the consequences/ impact on the employee of a refusal. This obligation under S.65A(3) is a standalone requirement on employers and not in response to information provided by the employee.

The Full Bench stated the Commissioner in the initial decision did not place enough emphasis on the fact the employer gave insufficient attention to the consequences of the refusal to grant the flexible arrangement to Ms Naden and discuss this with her.

These consequences included:

• Ms Naden would receive a lower rate of pay by being unable to perform the REC role.
• The removal of the REC role placed Ms Naden at a disadvantage in future career progression.
• The REC role meant a lot to Ms Naden aligning closely with her religious beliefs.

The Full Bench stated there was an obligation on the employer to not only consult on the consequences but to also detail their understanding in the written refusal response to the employee. This was an integral part of the employer’s written response.

“It is to be expected that any such consideration [regarding the consequences of a refusal on the employee] will be discussed in the consultations over a request and be included in the written reasons for refusal…”

Given the employer’s inadequate response to Ms Naden about the consequences of the refusal to grant flexible hours including to make any reference to those consequences in the written refusal, the employer had not met the consultation and response requirements under the Act.

As a result, the Full Bench overturned the original decision and directed the employer allow Ms Naden to work term 2 in accordance with her flexible working arrangement request.

Commentary

The flexible working arrangements provisions of the Fair Work Act are quite comprehensive and are also becoming more contentious. There have been a number of cases before the Fair Work Commission to test out the limits of these expanded flexibility provisions.

In addition to the formal requirements under the Act the Commission appears to be taking a more positive position on encouraging consideration of family responsibilities and work life balance.

The concern with this decision is that it appears as though the Commission is adding another layer of complicity to the Act.

Section 65A(4) states the employer must have reasonable business grounds to refuse a request.

Section 65A(5) outlines what could be considered reasonable business grounds.

Section 65A(6) states that if the employer refuses the employee’s request the employer must provide a written response setting out the particular business grounds for refusal and how those grounds apply to the request.

There is no stated requirement in section 65A(6) to address anything other than the reasonable business grounds in the written response.

Further to this the decision appears to indicate that any consideration of the consequences of a refusal must be discussed with the employee.  This is not stated in the Act.

It is recommended that employer receiving requests for flexible working arrangements treat those requests very seriously. There are many small steps the Act prescribes – and now a few more the Full Bench has added to them.  Any response should be quite comprehensive.

Employers are encouraged to seek professional advice if they are considering refusing an employee’s flexible work arrangement request.

Kind Regards
Michael Schmidt
M 0438 129 728
[email protected]
www.hunteremployeerelations.com.au

Guiding senior managers through complex employee relations issues

 Sign up here to receive Hunter Employee Relations Update directly to your email inbox

Want to know more about our client services?