THE KEY CHANGES FOR EMPLOYERS AND RECOMMENDED 2023 ACTION ITEMS

Happy New Year to you, our valued clients!

This is our second update on the most important changes regarding the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (“the Act”) in a three-part series to follow weekly throughout January 2023. These changes will have a significant effect on national system employers.

WHAT DO EMPLOYERS NEED TO KNOW?

1. Requests for flexible working arrangements

Prior to the changes taking effect, if an eligible employee makes a formal written request under section 65 of the Fair Work Act 2009 (Cth) (“FW Act”) for a flexible working arrangement, an employer has 21 days to grant or refuse the request. Any refusal by an employer can only be made on reasonable business grounds.

With effect from 6 June 2023, an employer can only refuse a flexible working request under section 65 of the FW Act if:

• The employer has discussed the employee’s request with the employee;
• The employer has genuinely tried to reach agreement with the employee about making changes to the employee’s working arrangements to accommodate the employee’s circumstances;
• The parties have been unable to reach an agreement;
• An employer has considered the consequences to the employee of the refusal; and
• The refusal is on reasonable business grounds.

The reasonable business grounds for refusing a flexible working arrangements request include: if it is too costly for the employer; if there is no capacity to change the working arrangements of other employees to accommodate the requested new working arrangements; if it is impractical to change working arrangements; if the arrangements would cause a loss in efficiency or productivity; or if the change would have a negative impact on customer service.

The idea of the new provisions is to encourage employers and employees to work together to find a suitable arrangement when an employer may otherwise be unable to grant the request in full.

The Fair Work Commission (“FWC”) will have new powers, through conciliation, mediation, or arbitration (if necessary), to assist employees that are unable to resolve disputes about flexible working arrangements with their employer or where an employer has not responded within the 21 days and the employer has not given the employee a written response.  The FWC may make orders in respect of the request including requiring an employer to grant an employee’s flexible work request.

Further, the circumstances to make a flexible working arrangement will be extended to be available to a pregnant employee and to an employee that has a member of their immediate family or household experiencing family and domestic violence.

2. Request to extend unpaid parental leave

Employers will be quite familiar with an eligible employee’s right to request unpaid parental leave for 12 months. However, from 6 June 2023, an eligible employee can request, following the end of the available parental leave period, an extension of a further 12 months’ leave which if agreed, would be up to 24 months in total.

Similar to the above provisions with respect to flexible working arrangement requests, an employer who refuses an employee’s request for an extension of unpaid parental leave on reasonable business grounds must set out the refusal on business grounds, explain how the grounds apply, and either provide a period of extended unpaid parental leave which the employer can accommodate or give notice that there is no extension that the employer would be willing to agree to. The FWC will also have the power to deal with unpaid parental leave extension requests.

WHAT DO EMPLOYERS NEED TO DO?

New Year’s checklist

In light of the above changes regarding flexible working arrangements and unpaid parental leave extension requests, our recommended New Year’s action items for employers are:

1. Update your policies and procedures to cover the steps for lawfully dealing with written flexible working arrangements requests made under s 65 of the FW Act and extensions for unpaid parental leave; and
2. Train and educate your relevant decision-makers on how to lawfully deal with requests, to minimise the risk of legal disputes.

Please note that not all requests for flexibility will necessarily qualify as requests under s 65 of the FW Act. Therefore, it is important for employers to understand the distinction so that formal and informal requests for flexibility are each dealt with properly.

HOW WE CAN HELP YOU

WilliamsonBarwick can advise employers to manage any formal requests for flexibility to ensure compliance with the FW Act. We recommend seeking legal advice when in doubt to limit the possibility of the dispute being dealt with in the FWC.

If you would like to discuss the implications of any of these changes with one of our lawyers, please let us know. We’re here to help.