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How the Fair Work Act encourages flexibility in the workplace

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Flexed to the limit

A recent survey conducted by global workplace solutions group, ManpowerGroup, has revealed that almost 90% of workers are opting for, or at least open to, arrangements that allow for flexibility in lieu of traditional “9 to 5” work arrangements.

A recent survey conducted by global workplace solutions group, ManpowerGroup, has revealed that almost 90% of workers are opting for, or at least open to, arrangements that allow for flexibility in lieu of traditional “9 to 5” work arrangements.

The research report, #GigResponsibly – The Rise of NextGen Work, uses the term “NextGen Work” to define a new way of work that encourages flexibility. The report also provides examples of NextGen Work that are now particularly attractive to workers, including part time, contract, temporary, freelance or on-demand forms of engagement.

In Australia – where the report found that an even higher percentage of workers were receptive to this model – the Fair Work Act 2009 (Cth) (FW Act) provides additional avenues for introducing flexibility into the workplace, in the form of flexible working arrangements and individual flexibility arrangements.

 

Flexible working arrangements

Section 65 of the FW Act entitles employees in particular circumstances to request a flexible working arrangement with their employer, such as a change to their hours of work, patterns of work or locations of work.

This entitlement is available to permanent employees who have completed at least 12 months of continuous service with their employer (or long term casual employees) and importantly, who fit into the categories of employee described in subsection 65(1A).

How flexible are flexible working arrangements?

Subsection 65(1A) of the FW Act does limit the circumstances under which an employee can request a flexible working arrangement by restricting the ability to request flexible working arrangements to employees who:

  • Are parents, or have responsibility for the care of a child who is school age or younger;
  • Are a carer;
  • Have a disability;
  • Are 55 years old or older;
  • Are experiencing violence from a member of the employee’s family; and/or
  • Provide 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.

For example, a flexible working arrangement may be proposed by a parent so that they can start and finish work at earlier times so that they can pick up their child from school.

This entitlement also allows employers some flexibility when considering an employee’s request for flexible working arrangements having regard to the commercial requirements of a business. The right of an employee to request a flexible working arrangement is just that – a right to request. As long as there are “reasonable business grounds” to support a refusal, an employer is under no obligation to approve a request for flexible working arrangements.

Section 65(5A) of the FW Act provides a non-exhaustive list of what may constitute reasonable business grounds including where it would be too costly or impractical for employers to accommodate an employee’s proposed changes, or would otherwise have a negative impact on the business.

 

Individual flexibility arrangements (IFAs)

Employees and employers covered by a modern award or registered agreement can also enter into agreements known as IFAs. These agreements vary how certain clauses in that award or registered agreement will apply to an employee, even if the employee is not included in one of the categories contemplated by section 65(1A) of the FW Act.

Flexibility terms are incorporated into modern awards or registered agreements and permit IFAs to vary a slightly broader range of entitlements including:

  • Arrangements for when work is performed;
  • Overtime rates;
  • Penalty rates;
  • Allowances; and
  • Leave loading.

For example, an employee may wish to start performing some of their ordinary hours on Saturdays so they can have Friday to attend further studies. In doing so, they agree not to be paid weekend penalty rates for work performed on the Saturday.

Whilst an IFA provides a broader scope for flexibility than section 65 of the FW Act, employers must ensure that an employee is “better off overall” under an IFA as against the applicable award or registered agreement – this can be gauged by both financial and non-financial benefits.

If an employer and employee decide to enter into an IFA, it must be drafted in accordance with the award or registered agreement and the FW Act. Any inadequacy in this regard exposes an employer to claims for underpayment and the terms they intended to displace may not actually be displaced.

IFAs are not, and cannot be posited as, a term or condition of an employment contract and cannot seek to reduce or remove an employee’s entitlements without some alternative benefit that renders the whole arrangement “better off” for the employee.

 

Lesson

These types of arrangements should always be approached as a means for employers and existing employees to consider the individual circumstances that apply to that employee and to create a flexible working relationship that suits both parties. A well-drafted policy that sets out an employer’s position on flexible work generally can also help to ensure a suitable arrangement is reached.

Employers should always seek legal advice when it comes to IFAs and policy drafting and to clarify any uncertainty around requests for flexible working arrangements.

 

Information provided in this blog is not legal advice and should not be relied upon as such. Workplace Law does not accept liability for any loss or damage arising from reliance on the content of this blog, or from links on this website to any external website. Where applicable, liability is limited by a scheme approved under Professional Standards Legislation.

 

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