Federal Government proposal makes ensuring workplace flexibility serious business

By Joe Catanzariti.

Key Points:
The proposed National Employment Standards would establish minimum entitlements to parental leave and flexible working arrangements.

It would appear the debate on workplace flexibility is well and truly back in the spotlight.

Federal Government is seeking to introduce ten minimum employment standards which are intended to apply to all employees covered by the Federal system, the ( NES).

An exposure draft of the NES has been released by the Government. It is intended that the NES will take effect on 1 January 2010.

Interestingly, the exposure draft, among other things, proposes minimum entitlements relating to requests for flexible working arrangements; and parental leave.

Flexible working arrangements

On requests for flexible working arrangements, the exposure draft says:

• it is intended to apply, if the employee is a parent of a child under school age or has responsibility for the care of a child under school age;
• the employee must make the request in writing, setting out details of the change sought and the reasons for the change;
• if the employer refuses the request, the employer must provide reasons for the refusal;
• an employer can only refuse a request on "reasonable business grounds" (for example, the cost of accommodating the request, the employer’s ability to reorganise work arrangements and the business needs of the employer);
• if an employer refuses a request on reasonable business grounds, it will be open to the employer or employee to suggest a modification to the employee’s request that might be more easily accommodated by the employer.

It is important to note that the exposure draft does not limit what might constitute "flexible working arrangements". This means that, while part-time work might readily be understood as a form of flexible working arrangement, there could conceivably be other types of arrangements (for example, changes to start and finish times, job sharing etc).

Further, the exposure draft does not presently define what are "reasonable business grounds". Some argue that the NES should articulate an exhaustive list of what constitute "reasonable business grounds" while others argue that it should be defined by a non-exhaustive list. There appears to be at least a shared view that, however defined, it should be with a view to reducing compliance costs and attaining transparency in decision-making.

The exposure draft also provides that the Government does not propose to impose working arrangements on employers. Various submissions received by the Government however are advocating that Fair Work Australia or some other conciliatory body be empowered to conduct a review of any requests for flexible working arrangements where there has been a failure to comply with the necessary procedures.

Parental leave

The NES also proposes to provide for minimum entitlements for parental leave. Some of the more interesting aspects of this proposed entitlement are:

• that each parent will be entitled to separate periods of up to 12 months’ unpaid parental leave in connection with the birth or adoption of their child;
• where a parent takes 12 months’ parental leave, that parent may request additional leave of up to 12 months. The employer may refuse the request on "reasonable business grounds". The observations made about the term "reasonable business grounds" in respect of the proposed right to request flexible working arrangements are also made here.

Observers have also remarked that the current terms of the parental leave entitlement do not go far enough and, in particular, that it should deal with the provision of paid maternity, paternity and parental leave. Certainly, the Human Rights and Equal Opportunity Commission (HREOC) has made this observation. HREOC has submitted that the minimum entitlement to parental leave under the NES should be brought into line with any proposals for paid maternity, paternity and parental leave arising out from the Productivity Commission’s inquiry into models for paid parental leave. The Commission is due to report back on its inquiry in February 2009.

Conclusion

The NES currently remains in draft form, and it is difficult to predict with precision as to what the final version will encapsulate.

This article however highlights some of the issues that the Government may need to consider before it finalises its proposals to introduce minimum entitlements to request flexible working arrangements and parental leave.

For employers, some of the big ticket items will include:

• How will "reasonable business grounds" be defined?
• Will there be any external review mechanism (such as to Fair Work Australia) for employees, where a request for flexible working arrangements or additional unpaid parental leave is refused? What is the nature of that review mechanism? That is, will it be confined to a procedural review or will it extend to a substantive review of the merits?
• What ongoing role will the antidiscrimination laws (Federal, state and territory) have and how will they interact with the NES?
• Will a paid maternity leave scheme be introduced and will it be incorporated as a minimum entitlement under the NES?

Thanks to Millen Lo and Christopher Kane for their help in writing this article.

For further information, please contact Joe Catanzariti.