In a recent landmark case, the FWC ruled in favour of an employer’s right to refuse a remote work request. What are the implications of this ruling for the future of hybrid and remote work?
The Fair Work Commission (FWC) recently dealt with a dispute over an employer’s denial of a remote work request. This case marks the first high-profile pushback against new legislation around flexible work that came into effect earlier this year.
In its ruling, the FWC found that the employer in this case had responded reasonably to the employee’s request and had legitimate business grounds to refuse it. It therefore rejected the worker’s appeal to work from home 100 per cent of the time.
This case reflects our shifting collective attitude towards flexible work, says Charles Power, Partner and National Practice Chair of the Workplace Relations and Safety Group at Holding Redlich.
“It’s another signpost in the post-COVID workplace,” he says. “Working from home is now giving way to a hybrid working environment, and this decision really endorses that trend.”
The changing legal landscape of remote work
This case marks the first significant challenge to new laws around flexible working introduced by the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act.
Passed last year, this transformative bill represented one of the most significant reforms to workplace relations since the Fair Work Act commenced in 2009.
From the prohibition of pay secrecy clauses to the expansion of the multi-enterprise bargaining system, employers have had to keep up with a plethora of industrial relations changes since the bill came into effect. Among these changes, as of June this year, the FWC was granted greater powers to resolve flexible work disputes between employers and employees.
“Previously, there wasn’t a capacity for the Fair Work Commission to unilaterally decide who was wrong and who was right when it came to disputes [over] flexible working arrangements,” says Power.
“But now, the Commission has that power. It has to use consensual ways to try and resolve the dispute through conciliation and mediation, but if that fails, it has the power to make a decision that will determine the matter finally – and that is a significant new development.”
In a nod to the benefits of flexible work, the bill also expanded the list of workers eligible to bring a dispute over a flexible work request to the FWC. This list now includes employees who are:
- Over 55
- Living with a disability
- Caring for infants or school-aged children
- Carers (within the meaning of the Carer Recognition Act 2010 (Ch))
- Experiencing family and domestic violence, or caring for someone who is
- Pregnant (this is a new addition).
If a business can clearly demonstrate that it has assessed a request for flexibility and found that it was not reasonably feasible due to cost or operational factors – as occurred in this case – they will likely have reasonably declined the request as required by the Act.
Read HRM’s full article on how the Secure Jobs, Better Pay Bill impacted flexible work.
“It’s clear in this case that if an employer provides a sophisticated argument as to why a request to work 100 per cent from home is not reasonable, and has taken some steps to accommodate the claimed grounds that are relied upon by the employee to justify the request, then the Commission will readily accept that,” says Power.
The case in question
The employer in this case, a national salary packaging provider, had a hybrid work policy in place stating that employees were expected to work on-site at least 40 per cent of the time. This requirement was also embedded into employment contracts.
The employee who brought the case to the FWC argued that his request to work from home 100 per cent of the time should have been approved due to his health issues and parenting responsibilities.
His application stated that his main reason for submitting the request was to take care of his school-aged son. Having recently split up with his partner, he was in the process of seeking a custody arrangement that would allow him to care for the child every second week. However, at the time of the request, he cared for his child for one day every two weeks.
He also shared that he suffered from inflammatory bowel disease, which meant he needed to be at home with easy access to toilet facilities. This was corroborated by a note from his doctor.
In response to his initial request, the employer pointed out that his role required him to manage cases and provide advice, which meant a certain amount of face time was required. They also noted that his daily productivity had dipped to 50 per cent – well below the company target of 85 per cent – while he had been working remotely.
“Working from home is now giving way to a hybrid working environment, and this decision really endorses that trend.” – Charles Power, Partner and National Practice Chair of the Workplace Relations and Safety Group at Holding Redlich.
“They weren’t saying that remote work causes poor performance,” clarifies Power. “But they were saying that, in order to turn the performance around, the employee really needed to be in the office being observed and managed by the people in the company.”
Before denying the request, the company offered the employee a chance to initiate a gradual return to work over a period where he would be allowed to work remotely 80 per cent of the time. They also told him he could allocate his office days to weeks where he would not have custody of his child, and could alter his hours to accommodate school pickups/drop offs.
They offered adjustments to the workplace to accommodate the employee’s health concerns, including situating his work station close to office toilet facilities. Despite this, the employee still insisted on needing to work remotely on a full-time basis. When his request was refused again, he escalated the matter to the FWC.
The FWC’s decision
Power says the employer’s willingness to reach a compromise with the worker would have weighed heavily in its favour in the eyes of the FWC.
“It’s [a question of] being receptive to why the employee wants to work from home, and thinking creatively about alternatives or ways to meet the employee halfway in respect of those interests or concerns that the employee raises as a basis for the request,” he says.
In its ruling, the FWC agreed that face-to-face time was “desirable” in the employee’s particular role and sector, and that spending time working on-site would have allowed management to coach him on the aspects of his work that were suffering.
Addressing the health concerns he had raised, the FWC was not convinced that his bowel condition constituted a disability for the purposes of the Fair Work Act. It said the medical evidence was “insufficient” to afford him the relevant protections for workers with disabilities.
According to Power, this is one aspect of the decision that could be considered problematic.
“To say that someone who suffers from a situational disorder or inflammatory bowel disease is not suffering a disability seems to be a bit out there,” he says.
“This [employee] was self-represented, but, if they had a union behind them or someone with resources, that disability question might be subject to challenge.”
While the organisation had permitted full-time remote work during the height of COVID-19, the FWC noted that “the worst of the pandemic appears to have passed,” and therefore the employer is “now within its rights to require its employees to return to the office in accordance with their contracts of employment”.
Ultimately, the Commission found that the employer had made adequate efforts to meet the employee halfway, and that they had “reasonable business grounds” to refuse the request.
Could this case change remote work outcomes for others?
The outcome of this case is a turning point on employers’ journeys away from peak-pandemic ways of working. The FWC’s acknowledgment that employers are within their rights to enforce office hours per pre-COVID contracts is a valuable lesson about how cases like this could be considered going forward.
Crucially, the employer in this case also had the right frameworks in place to defend itself from a claim like this, including a clear and compliant hybrid work policy.
Having an airtight flexible work policy in place is not only a legal imperative – it’s also an employee expectation. A study conducted earlier this year found that nearly four in five (78 per cent) of employees wouldn’t work for an employer without a formalised flexible work policy.
“There need to be some clear guidelines set out for employees about when requests can be made, and how they should be made,” says Power.
“The people who are responsible for making decisions about these matters [also] need to have training about how they’re supposed to respond – in particular, the need for consultation and flexibility, and for thinking about alternatives.”
There’s also a degree of nuance involved in demonstrating reasonable business grounds for denying a flexible work request, he says, as this will depend heavily on the nature of the role and the employee’s unique circumstances.
“It’s a question of being bold enough to assert a view about what is good for your business, but also being receptive to alternative ways to accommodate the employee’s interests.”
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