Being a “caring” employer can come back to bite you when a temporary change becomes an unintended new employment contract.

Getting into a pickle when allowing too much flexibility is quite a common phenomenon for small businesses.  

While legally it is necessary to genuinely consider flexible work requests upon return from parental leave, be mindful of allowing flexible working arrangements “during” the parental leave period.  

Many employers fall into the trap of allowing staff to work casually or part-time during parental leave periods or to undertake work from home while on parental leave.  

Except for keeping in touch days, any form of work done during parental leave has the effect of ending the parental leave period.  

In this case, if new working arrangements are undertaken that are different to those the employee was doing before they started parental leave, a permanent change in working conditions may have occurred without the employer realising it.  

The key message is ‘think carefully and seek professional advice before allowing changes in working arrangements’.  

Some you may be obligated to genuinely consider, some you may not. Allowing what is intended to be a temporary change in working arrangements without setting appropriate parameters around the agreement may result in the unintended consequence of a new employment contract being forged.  

This can lead to significant problems for an organisation where the change was not planned. For example, allowing an employee to work from home for a couple of days of their choosing each week shortly after commencing parental leave.  

This would break the parental leave period as soon as they commence working and create a new contract that would allow them to continue to work two days a week on any day they like from home, on an on-going basis.  

Addressing requests for leave 

The ability to request flexible work arrangements is provided for in Section 65 of the Fair Work Act 2009 (Cth) (the Act).  

Flexible working arrangements may be requested by an employee upon return from parental leave, or at any time thereafter where they have the care of a child of school age or under and meet certain eligibility criteria.  

Flexible working arrangements may include a request to move to part-time to assist the employee care for the child. It may also include changes in starting and finish times, working from home, job share, condensed working week or fortnight, for example.  

The Act states that the employee’s request must: 

• be in writing and; 
• set out the details of the change sought and of the reasons for the change.  

Such details might include: 

• the length of time for which the employee is requesting the change 
• the hours they would like to work each week 
• the days they wish to work 
• the start and finish times for those days 
• the location of work. 

The employer in turn is obligated to respond to the request, also in writing, within 21 days of receipt of the request, to give genuine consideration and only refuse on reasonable business grounds. 

It is possible within this timeframe for the parties to engage in discussion and come to a mutually beneficial arrangement that may be different to the original request.  

Whether agreeing to or refusing a request, this must also be detailed in the written response by the employer.  

While there is no obligation to accept the request outright, employers may only refuse such requests on reasonable business grounds as outlined in the Act. These include, but are not limited to: 

• The new working arrangements requested by the employee would be too costly for the employer. 
• There is no capacity to change the working arrangements of other employees to accommodate the new working arrangements requested by the employee. 
• It would be impractical to change the working arrangements of other employees, or recruit new employees, to accommodate the new working arrangements requested by the employee. 
• The new working arrangements requested by the employee would be likely to result in a significant loss in efficiency or productivity. 
• That the new working arrangements requested by the employee would be likely to have a significant negative impact on customer service. 

Flexible work arrangements may be agreed to on a temporary or permanent basis.  

This is up to the parties to negotiate and agree upon. It is recommended that a new contract of employment or addendum to the existing contract be issued in writing including the new agreed terms so both parties are on the same page.  

CCI also recommends that as part of the discussion, employees are made aware of how their employment entitlements will be affected by the proposed changes.  

A flexible working arrangement request, if approved, is essentially an agreed variation of the employment contract. For large organisations this may not be particularly onerous.  

However, small businesses tend to be more heavily impacted and less able to accommodate such requests. This is often due to:  

• lack of additional resources that can absorb tasks where an employee moves from full time to part time   
• additional costs incurred from introducing flexibility, being proportionately higher compared to overall profit for a smaller organisation compared to large  
• limited staff numbers meaning roles and skill sets are unique and/or highly specialised, making it difficult to source cover for job share arrangements etc. 

This is not to say that flexible working arrangements hold no benefits for employers. When it comes to staff retention, engagement and productivity, the pros can far out way the cons. 

► If you would like more information, contact CCI’s Employee Relations Advice Centre on (08) 9365 7660 or advice@cciwa.com