Understanding Flexible Working Arrangements for Australian Businesses
Certain employee categories have a legal right to request flexible working arrangements from their employer, and if you're the employer, you have a responsibility to consider requests. Flexible working arrangements can be mutually beneficial for both employers and employees. As an employer, you'll want to understand how flexible working arrangements work, and be clear about your obligations and duties.
Flexibility in the workplace and employer obligationsThe right to make a request for flexible work arrangements is established in the National Employment Standards (NES). The NES applies to any employee covered by the national workplace relations system. Employers are obligated to consider these requests and refuse them only on reasonable business grounds. Note that if your state or territory has laws widening the entitlements for employees and flexible work, those broader laws will also apply. For example, Victoria has rules within the Equal Opportunity Act of 1995 preventing employers from unreasonably refusing to accommodate a staff member's parental or carer responsibilities.
Employees who can request flexible working arrangementsNot every employee can make a request for flexible working practices. You have to satisfy certain conditions. Under the NES, any employee who has worked for the same employer for 12 continuous months or more is eligible to ask for flexible working arrangements if they also satisfy one of the following conditions.
- Parents - Parents or adults who are responsible for a school-aged or younger child can ask for a flexible work arrangement.
- Carers - Employees who are a carer under the Carer Recognition Act 2010 are also eligible to make a request.
- Disability - Employees with a disability are also eligible to make a request.
- Age - Employees aged 55 or more can make a request.
- Family situation - Employees who are experiencing family or domestic violence can make a request for flexible work. If an employee provides care to an immediate family member or household member subject to family/domestic violence, they're also eligible to make a request.
Examples of flexible working arrangementsSo, what do flexible working arrangements involve? Flexible work can include anything from coming in an hour later to working several days a week from home. Flexible work can involve changes to the hours of work, patterns of work, and locations of work. Changes to patterns of work might involve flexible work weeks such as working longer hours on some days to reduce the days worked per week. These compressed work schedules are a common type of flexible working arrangement. Examples include changes to start and finish times, or job sharing and split shifts. Some employees might ask for a graduated return to work after, for example, parental leave. Your employee might make a request to start one hour later so she can take her child to school or to care for her child. Another employee who's 55 or older might make a request to finish work several hours earlier on Thursdays to do volunteer work or for personal reasons.
What do employees have to do?Employees typically request their flexible working arrangements on an individual basis. This is known technically as an individual flexibility arrangement. The request must be made in writing and it should outline the changes the employee wants. Reasons for the request should be included, whether it's to provide care for a child or something else. When you agree to a request, you'll still need to provide all relevant entitlements under modern awards or enterprise agreements. An example is if your employee asks to start their shift earlier so they can work four days instead of five. You'll still need to pay any penalty rates applicable for the earlier hours of work.
What do employers have to do?Employers must reply to the request in writing, within 21 days. If you're going to refuse a request, it needs to be on reasonable business grounds. Your reasons for refusal should be included in the letter. Note you as the employer can refuse (on reasonable business grounds), agree to, or negotiate a request. This means once you've received a request and you can't fully accommodate it due to business reasons, you could have a discussion with the employee about coming up with a compromise for meeting both business and employee requirements.
Reasonable business groundsA strict definition of reasonable business grounds doesn't exist. However, reasonable business grounds can include arrangements being too expensive to accommodate. It can include other employees' working arrangements impeding you from accommodating the request. Impracticality of changing other staff's work arrangements can also be a reasonable reason to refuse. If you need to hire new employees to accept the request, this can also be reasonable grounds for refusal. It's also reasonable to refuse if satisfying the request is likely to lead to a major loss of productivity or have a major negative impact on customer service. Operational and occupational health and safety reasons can also be reasonable business grounds for refusal. If you have to refuse a request, it's good practice to meet with the employee in person and explain your reasons. Rather than only receiving a written notification, your employee will understand you've carefully considered their request.
Can employees challenge a refusal?As an employer, you're not required to agree to a request. If a dispute arises, employees could take the matter to the Fair Work Commission. State or territory laws could have relevant provisions. If the employee thinks they've been discriminated against, they could lodge a complaint with the relevant human rights commission under anti-discrimination laws. In these anti-discrimination cases, employers could be ordered to act to avoid further contravention and asked to pay compensation. If you have doubts about a refusal, get legal advice.
Benefits of flexible working arrangementsSo, why should you as an employer accommodate flexible working arrangements or flexible working practices? Flexible working arrangements can turn out to be win-win situations for both your business and your employees.
- Morale - Making it easier for staff to balance work and life can result in improved morale, motivation, and productivity. Employees can feel more engaged with their work as a result. Think of a flexible working arrangement as a low-cost employee benefit with substantial value for employees and little outlay from you.
- Turnover and absenteeism - Job-stress depression costs the Australian economy $730 million a year, with turnover an additional related cost. Supporting your employees in flexible work arrangements could help reduce stress, absenteeism, and costly turnover. It could allow you to retain talented teams and stay competitive.
- Reputation - Happier staff members can boost your business reputation and turn your business into an employer of choice. Reputational improvements make it easier for your business to hire the most qualified people.
- Overhead costs - Keeping your staff on site comes with associated costs. Accommodating work-from-home arrangements, for example, can help you reduce your office space, equipment, and electricity costs. Both lower overheads and reduced turnover and absenteeism can contribute to a better bottom line.
- Scheduling - Flexible work can be positive for scheduling peak periods. By overlapping staff schedules, you can have more people at work during the hours your business needs it most.
Potential challenges of flexible working arrangementsKeep in mind challenges to flexible work arrangements do exist. One major challenge is not being able to call spontaneous meetings with employees. As an employer, you'll likely need to schedule meetings in advance and set up the right software for remote meetings. Managing performance fairly is another possible challenge. Benchmarking, regular check-ins via the internet, and frequent feedback are possible ways to overcome this. Other challenges include access to development and promotions, and building a coherent workplace culture for all employees. Being aware of these potential challenges can enable you to become more effective at managing your flexible work arrangements.
Best practice for flexible working arrangementsFlexible working arrangements can be a win for your business and your employees. However, they'll require a shift in your management approach and a strong focus on communication. These best practice tips will help your business fully leverage flexible working arrangements.
- Policies - Encourage transparency and understanding by outlining flexible work policies. Keep your policy up to date and make sure it's accessible to all employees.
- Stayinformed - As an employer, staying informed about your rights and obligations is vital. It can help you develop better flexible work policies and make sure you're fulfilling your duties towards staff members.
- Businessgoals - Keep your business goals in mind and consider how you can accommodate your staff's flexible work requests while reaching business targets. The two don't have to be mutually exclusive.
- Ask for more information - Ask staff for more information when considering requests. This gives you the basis for making a sound decision. It will also help you comply with your obligations.
- Timesheets - Have employees, especially work-at-home employees, keep timesheets to log their hours worked.
- Shareschedules - Plan schedules in advance and share them in the workplace and on a virtual board so team members can keep track of each other. This will help with meeting scheduling and collaboration.
- Trialperiods - If you have doubts about the impact of flexible working arrangements, try negotiating with your employee about starting with a trial period. After the trial period, you can assess how well it's gone for both the business and the employee, before committing to a permanent change.