“Impossible to run a business”: Fair Work Commission to force employers to justify flexible work decisions

Australian employers will soon have to provide reasoning for denying any worker requests for flexible work arrangements under changes to modern awards to be implemented following a decision by the Fair Work Commission.

The full bench of the Commission has decided to insert a clause into all modern awards to provide employees with the right to pursue legal action if employers fail to properly consider their requests for flexible work arrangements.

The decision, published yesterday, will also require employers to assess alternative arrangements if a flexible work request is denied.

The Commission published its model for flexible work arrangements alongside its decision, but did not provide an exact date for the implementation of the changes.

The move comes after industry consultation since May over family friendly working arrangements, overseen by the Commission and designed to tackle what unions have argued is a lack of flexible arrangements in Australian workplaces.

The Commission found there’s evidence of “significant unmet employee need for flexible working arrangements”.

Employer Groups, including the Australian Industry Group, have previously argued changing modern awards would partially undermine section 65 of the Fair Work Act, which sets out flexible work arrangements for those with parental or other caring responsibilities.

“Impossible to run a business”

Council of Small Business Organisations Australia (COSBOA) chief executive Peter Strong is critical of the Commission’s decision, arguing it will stifle the ability of employers to hire staff.

“How do you run a business if the hours of work are decided not by the customer but by the worker?” he tells SmartCompany.

“If we have to justify a business decision to a third party it is no longer our business.”

Strong says while the changes might be fine for larger companies that could devote resources to justifying rostering matters, small businesses would be left out in the cold.

“[Small businesses] don’t have HR departments that can do all this work,” he argues.

“If this goes to what they want to do, it becomes impossible to run a business.”

Employers must engage with employees on flexible work requests under the new rules and “genuinely try to reach an agreement on a change in working arrangements”, the Commission said in its decision.

This dialogue must reference the needs of an employee’s individual circumstances, the consequences for the employee if changes are not made and any “reasonable business grounds” for refusing a request.

If an employer does refuse a flexible work request, details must be provided in writing for the refusal, including the business grounds and and suggestions for alternative arrangements that could be made.

Australian Council of Trade Unions secretary Sally McManus has welcomed the ruling, saying it is a “step in the right direction”.

“People should be able to advance their careers and care for their families, and if employers are unwilling to consider reasonable requests for altered hours to accommodate a caring responsibility then workers should be able to challenge that decision,” she said in a statement.

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