Key learnings for employers

• Employers must provide a more detailed response where they cannot accept an individual employee’s request to work from home on the basis it would result in a loss of productivity and efficiency.
• It is insufficient for an employee to simply state they are entitled to work from home because they are over 55 (etc) and not provide specific reasons related to their circumstances.
• The Commission ‘appears’ to endorse employers taking a hybrid approach to employees working from home 50% of the time – subject to special circumstances.
• The Flexibility provisions of the Fair Work Act are readily being used by employees to seek to work from home and challenge employers encouraging employees to return on a hybrid basis.

In this Employee Relations Update we examine two Fair Work Commission that provide employers with guidance on the Flexibility provisions of the Fair Work Act.

Following is a summary the Flexibility provision:

An employee may request a change in working arrangements in the following circumstances

• the employee is pregnant;
• the employee is a parent, or has the responsibility for the care, of a child who is of school age or younger;
• the employee is a carer
• the employee has a disability
• the employee is 55 or older
• the employee is experiencing family or domestic violence
• the employee 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 family or domestic violence.

Employees must have a minimum of 12 months service – this includes casuals.

The employee must make their request in writing setting out the details of the change sought and the reasons for the change.

Employers must respond in writing to the employee within 21 days.

There are detailed requirements on employers in the response process but ultimately the employer may refuse the employee’s request on reasonable business grounds.

Unreasonable business grounds include the new arrangements being too costly, the inability to change working arrangements for other affected employees, the effect on customer service and a in significant loss in efficiency and productivity.

While the above is a short summary of the Fair Work flexibility provisions the decisions show us how important it is to pay attention to and satisfy those details of what has become a contentious area of industrial relations law. Yes – as the old saying goes: “the devil is in the detail”.

In first decision (Lloyd v Australia and New Zealand Banking Group Limited) Ms Llyod makes a request to work from home 5 days per week on the basis that she is over 55 years of age. She also supports this request with a number of statements including stating that she is at risk of catching COVID on the commute to work at while at work. This matter took place well after the introduction of vaccines and the shuts downs finished. Ms Lloyd stated she did not need to be in the office as she regularly interacts with her colleagues in other offices via Teams and only has a small number of co-workers in her office in Victoria.

Following COVID ANZ activated a ‘hybrid’ policy allowing employees to work from home 50% of the time – following consultation with their manager.

ANZ responded by discussing the matter, proposing a number of measures to Ms Lloyd hoping to accommodate her needs, while also upholding its 50% work from home limitation. Ms Lloyd did not agree with any of the alternatives and held her position to work from home full time.

ANZ acknowledged that while Ms Lloyd could perform all her duties from home, there were significant benefits to employees interacting in an office environment and that a 50/50 home/office split was fair to employees.

During the Commission proceedings ANZ stated that an employee simply stating they were over 55 years of age and not presenting a specific reason for seeking to work from home full time was insufficient.

Ms Lloyd had made an open assertion about catching COVID as the reason to work from home full time. She had not provided any evidence stating she had a particular underlying medical condition or disability that made her vulnerable to the impact of COVID. She relied on ‘widely accepted medical evidence and opinion that persons over 60 years of age confront a greater risk of COVID infection and serious illness.”

The Deputy President accepted ANZ’s argument stating Ms Lloyd had not made a valid request under the Act. He added that in his opinion there are benefits to employee workplace attendance and that the current hybrid model affords considerable flexibility adding it was not unreasonable for ANZ to encourage employees to return to the office under this policy.

Even though he did not have to address this issue the Deputy President then went on to explore whether ANZ had based its decision on ‘reasonable business grounds’ under the Act.

The key reason on which ANZ had refused Ms Lloyd’s request was the belief that there was a ‘positive impact that workplace attendance has on individual and team performance arising from collaboration, workplace learning, performance management and feedback’. The Deputy President acknowledged this while stating that the benefits of such face-to-face interactions were hard to quantify.

The Deputy President also stated that ANZ had not addressed cost, the capacity or impracticality of changing working arrangements, productivity or the impact on customer service in its response to the employee request. As such the response ANZ had failed to grapple with the business impact of the request and had failed to provide ‘reasonable business grounds’ for its refusal.

However, taking in all the circumstances of the case the Deputy President stated that the grounds relied on by ANZ, in refusing Ms Lloyd’s request, were reasonable business grounds.

The above case, by a single member of the Commission largely focussed on whether being older than 55 years of age provided an employee with the ability to work flexible hours – in this case working from home fulltime. It didn’t. However, if the employee had had an underlying medical condition making them more susceptible it is likely the Commission would have decided in favour of the employee.

Unfortunately, the following decision (Ridings v Fedex Express Australia) which has handed down on Appeal some months after the above ANZ case places much more onerous conditions on employers to justify their reasonable business case for refusing an employee request.  

This Appeal hearing examined the decision of Deputy President Lake who had found a middle of the road decision in response to Mr Ridings challenge to the refusal.

Mr Ridings has a wife and two children all of whom have a medical condition or disabilities that required him to look after them. He was their carer without additional assistance.

(An interesting point, briefly raised by the Commission but not explored, was how Mr Ridings could fulfil his employment contract duties while working from home and simultaneously being the carer of his wife and several children. It was acknowledged during the hearing that his work output was very low compared to other employees. This shows how an employer can easily get caught up in a delicate industrial relations bind with multiple legal responses at the employee’s fingertips if the employer puts one foot ‘wrong’. And there are quite a number of no-win-no fee lawyers waiting to help the employee!)

Since COVID Mr Ridings had been working from home 4 days per week on a part-time basis. As the employer sought to progressively get employees to return to working from the office Mr Ridings took various forms of leave and challenged these changes with further flexibility requests to work from home. His last flexibility request was to work from home on a full-time basis. This was rejected by the employer who requested Mr Ridings work from the office a minimum of two days each week.

Fedex discussed each of the requests with Mr Ridings in a systematic manner in accordance with the Act. While it required other employees to return to the office 3 days per week it stated it would accommodate Mr Ridings at 2 days per week in the office.

This rejection by Fedex resulted in Mr Ridings making an application to the Commission.

The Deputy President examined the employees request and found it had been validly made acknowledging his personal circumstances as a carer.

The DP summarised the requirements on employers following an employee request stating:

1. The employer must discuss the request with the employee.
2. The employer must genuinely try and reach an agreement with the employee about making changes to the employee’s working arrangements to accommodate their circumstances.
3. Where no agreement has been reached the employer may only refuse the request on reasonable business grounds.

For the purposes of this ER Update, we’ll only focus on ‘reasonable business grounds’.

Fedex had refused Mr Ridings request on the basis it would result in significant loss in efficiency or productivity. While acknowledging the benefits of working in the office several days per week the DP stated the employer had failed to account for any detriment that would arise, in relation to working from home, when they responded to Mr Ridings’ denying his request.  The Act requires the employer to accommodate circumstances of individual employees if the employer is in a position to do so.

The DP stated that any claim of detriment to productivity or efficiency would need to be substantiated. He gave examples of the employee not meeting targets, was difficult to contact, or tasks were not being performed to a specific standard. Such issues needed to be raised when denying the employee’s request.

In the original decision the Deputy President had put in place an interim measure whereby Mr Ridings would work from the office 1 day per week and from home 3 days per week. This was to be reviewed after 3 months. Mr Ridings appealed that decision stating. The Appeal affirmed that original decision – including the original finding the employer had not outlined its reasonable business grounds in sufficient detail.

Given the Appeal occurred after the 3 months review from the original decision it is unclear exactly where the parties have ended up in their work from home disagreement.

The flexibility provisions of the Fair Work Act have become quite legalised – more than I would have expected. However, what this decision has highlighted is that employers cannot simply make generalised assertions about losing efficiency and productivity where an employee seeks to work from home. To get past the hurdle of ‘reasonable business grounds’ employers need to itemise the negatives in relation to the particular employee whose request is being considered.

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

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