Do I have to maintain an existing flexibility arrangement forever?

Many employers will one day have an employee enjoying a flexible working arrangement who no longer genuinely and reasonably requires the arrangement (for example, the formerly sick spouse of an employee no longer requires home care).

Although some employees will gladly return to the predictable routine of a normal work schedule, many will ‘cling on’ to the flexible arrangements they have been afforded, long after the underlying need for such arrangements has passed. Unfortunately, trade unions and employees will often attack employer decisions to terminate flexible working arrangements by claiming the decision is discriminatory or flexibility requests, once granted, must continue ‘indefinitely’.

With myriad anti-discrimination agencies and avenues for employees to bring complaints against their employers (as well as ever-expanding flexibility ‘rights’ in legislation), a common question for employers to ask is: “Can I still manage my staffing decisions to suit my business needs?”

In a comforting decision for employers, the New South Wales Industrial Relations Commission (“Commission”) recently emphasised that tribunals should only interfere in a company’s managerial decisions if the company is attempting to act unlawfully or unreasonably.

Which employees might have a right to request flexible working arrangements?

Under the Fair Work Act 2009 (Cth) (“FW Act”), at s 65(1A), employees can request flexible working arrangements if they:

1. are a parent, or has responsibility for the care, of a child who is of school age or younger,
2. are a carer (within the meaning of the Carer Recognition Act 2010),
3. have a disability,
4. are 55 or older,
5. are experiencing domestic violence, or
6. provide care or support to an immediate family or household member, who requires care or support because the member is experiencing violence from the member’s family.

This is an extensive list and it is likely one of your employees or staff are entitled to request flexible working arrangements under the above provisions. If you have an employee which falls into a category listed above, then it is likely they will request, or may already have, a flexible working arrangement.

When can employers terminate flexible working arrangements?

In CFMEU (NSW branch) v South Western Sydney Local Health District [2016] NSWIRComm 1047 (“CFMEU v SWS”), the employees had been employed for around eight years and had a flexibility arrangement, established under the employer’s flexible work practices policy, whereby they worked their standard hours from 6am until 2.30pm. Such an arrangement allowed them to pick up their children from primary school to care for them in the afternoons. Other trade staff in their department worked standard hours from 7am to 3.30pm. The policy stated that approvals of flexible working hours were “for a maximum of 12 months“.

In June 2015, the employees’ request for another extension of their flexible working arrangement was rejected. They were given five weeks’ notice of their return to standard 7am to 3.30pm working hours. The CFMEU then applied to Commission, asking it to interfere and prevent the employer from carrying out its decision to end the generous arrangements.

Legislative Framework

In legislation similar to the FW Act, the Anti-Discrimination Act 1977 (NSW), states that it is unlawful for an employer to discriminate against an employee on the grounds of that employee’s “responsibilities as a carer“. Similarly, in Victoria, the Equal Opportunity Act 2010 (Vic) (“EO Act”), at s 19(1), states employers must not unreasonably refuse to accommodate carer or parent responsibilities.

The Commission’s Decision

The Commission found that the hospital:

• was suffering serious financial problems and a tightening budget (for example, it operated with a deficit of around $8.2 million for the 2014-15 financial year),
• had experienced significantly increasing patient numbers, placing pressure on the hospital to service more patients with a tighter budget,
• was making the revocation pursuant to a plan to improving efficiency across the entire hospital (as opposed to if it had been motivated by a desire to discriminate against certain employees),
• did put the two employees on notice about possible changes to their flexible working arrangements, and
• periodically reminded the employees that their applications for altered hours would be reassessed and could be rejected based on future business needs.

Based on the above, the Commission found the employer lawfully revoked the employees’ flexible working arrangements, based on reasonable business needs, and was appropriate in the circumstances.  Thankfully for employers, the Commission described non-interference with management prerogative as an “overwhelming principle” to be followed in such cases. The Commission emphasised that tribunals should not interfere with an employer’s right to make management decisions “unless the employer is seeking something unreasonable or unlawful from employees“.

Do you have long-standing flexibility arrangements which aren’t working and you need to ‘rein in’?

Based on the decision in CFMEU v SWS, employers should take the following precautions if they want to be able to successfully defend a discrimination claim when revoking flexible working arrangements:

• Regularly emphasise that employees must reapply for their arrangements to be extended periodically;
• Each time an arrangement or extension is granted, highlight that arrangements might not be extended at the next application;
• When revoking flexible working arrangements, articulate a clear reasonable business ground for terminating the arrangements (for example, consider the financial difficulties facing the hospital in CFMEU v South Western Sydney);
• Give appropriate notice to employees prior to enforcing a revocation; and
• Have an effective “Flexibility Requests” policy in place at your workplace. This will minimise the risk of any manager acting unlawfully, as well as ensure that employees cannot say they did not understand how the arrangement could be terminated.