Around Australia, laws regarding workplace relations and employment are changing as a result of amendments to the Fair Work Act which became law last year under the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022.
The changes respond to last year’s Jobs Sumit and commitments made by the new Labor Government before its election last May.
Of the more significant amendments, two discussed here include an expansion of the right of employees to request flexible work arrangements and new limits around fixed-term employment contracts.
Flexible Work Arrangements (changes apply from 6 June 2023)
For many years, the Fair Work Act has enabled certain workers who have been with their employer for at least twelve months to request flexible work arrangements.
These arranagements may relate to hours of work, start/finishing times, patterns of work (such as split shifts and job-sharing arrangements) or the location of work.
Currently, workers can request such arrangements where they need to care for school-age children, are disabled, have caring responsibilities or are aged over 55.
From June 6, this will be expanded to include workers who are pregnant or who are experiencing family and domestic violence (this also includes workers whose family or household members are experiencing family violence). These changes are in line with provisions that now grant employees the right to take leave for family and domestic violence.
In addition, the amended legislation imposes new obligations on any employers who refuse such a request. (As with before the amendments, employers need to respond to the request within 21 days of it being made.)
Specifically, employers who refuse requests for flexible working arrangements will need to:
- discuss the request with the employee
- make a genuine effort to find alternative arrangements to accommodate the employee’s circumstances
- consider the consequences of refusal for the employee; and
- provide a written response that outlines several matters including the reasons for refusal, any other changes the employer is willing to make that would accommodate the employee’s circumstances and information about referring a dispute to the Fair Work Commission.
When providing the written response, employers will need to provide a clear explanation of specific business reasons why the request cannot be granted. Broad statements such as ‘the business refuses on reasonable business grounds’, will not suffice.
Importantly, workers may now appeal any refusal to the Fair Work Commission. The Commission will provide the parties with a conciliation service as a forum to resolve disputes in a similar manner to that provided in relation to unfair dismissal or general protections. It will also have a limited right to arbitrate and to deliver binding resolutions.
The Commission will have broad powers when dealing with such disputes. These relate not only to how it deals with the dispute from a procedural viewpoint but also the breadth and type of orders it can make. The Commission can even make orders in favour of workers where employers fail to respond to a request at all (this is more common than many think). Those who breach such orders may be subject to penalties.
The new right to involve the Fair Work Commission is significant as the Commission did not previously have power to deal with flexible work requests.
When it comes to flexible work arrangements, important matters about the new provisions include that:
- The question of whether or not a request is reasonable will depend upon several matters. These may include the nature of the specific request as well as the circumstances of the business including its size, the goods or services it provides and its financial position.
- The right to make a flexible work request is protected under the mandatory National Employment Standards and cannot be traded away through workplace or enterprise agreements.
- The changes do not address whether or not employees can work from home or must come to the office. Instead, the right to work from home or otherwise will continue to fall back onto existing processes which afford considerable discretion to employers.
The changes were introduced to afford expanded flexible work rights to employees. Time will tell whether or not they will deliver their intended effect in practice.
Fixed or Maximum Term Contracts (change applies from December 7 2023)
Another important change is that from December 7, fixed-term employment contracts will be restricted to a maximum of two years. Such contracts may now be renewed only once and can only be renewed for a further two years.
Fortunately, there are exceptions to the two-year time limit. Of these, the main one concerns cases where staff who have specialist skills are needed to perform tasks which are expected to take longer than two years to complete. Other exceptions are likely to apply to workers who are employed under training arrangements (such as apprenticeships) or where employers require additional workers to cover peak periods or emergency situations. Further announcements are expected leading up to the time when the laws come into effect. Exactly how these exceptions will play out in practice remains to be seen.
To avoid being caught off guard, employers should examine their existing arrangements and determine whether or not these will be compliant.
Where they are unsure, professional advice should be sought.