The “toothless tiger” gets some teeth? FWC review of decision to refuse flexible work

The recent decision of the Fair Work Commission in Rind v Australian Institute of Superannuation Trustees – [2013] FWC 3144 (31 May 2013) appears to raise an additional concern for employers when refusing requests for flexible work on “reasonable business grounds”. The right to directly challenge the reasonableness of an employer’s decision under the “right to request” provisions of the Fair Work Act 2009 (Cth) (Act) was intentionally limited when the provisions where introduced. However, the Rind decision opens the door for the Commission’s review of these reasons under the unfair dismissal provisions.

Who initiated the termination of employment?

The Rind decision considered the jurisdictional objection of Ms Hanina Rind’s employer, Australian Institute of Superannuation Trustees (AIST), that Ms Rind did not meet the jurisdictional threshold to bring an unfair dismissal claim because she initiated the termination of her employment. Ms Rind argued that this threshold question was satisfied because AIST’s conduct constituted constructive dismissal.

The circumstances leading to this cessation of Ms Rind’s employment will be familiar to many employers. Ms Rind, whilst on her second period of parental leave, requested that she return to work on a graduated basis. AIST claimed that Ms Rind had originally agreed that this gradual return process would see her return to full-time work in January 2013, however it was accepted that by the time Ms Rind was to return she requested that she return on a part-time basis only.

Ms Rind made her request in accordance with a specific provision of an enterprise agreement that applied to her employment. This provision allowed an eligible employee to return to work part-time until their child reaches school age, and only enabled the employer to refuse the request on “reasonable grounds” relating to the effect on the workplace or business. In many ways, this provision mirrored the “right to request” provisions set out in section 65 of the Act.

AIST refused Ms Rind’s request to work part-time in writing and set out 10 “reasons” for its decision. These reasons included an assertion that the role was and is a full-time role, a need for immediate action to troubleshoot issues when they arise, the difficulties in communicating over email, the need for the specific resource on site, certain key projects earmarked for 2013, the fact that a project was compromised during Ms Rind’s absence, dissatisfaction of other staff, an inability to schedule “impromptu” meetings and a delay in deployment of projects.

Ms Rind attempted to challenge this decision through her union, leading to a proposal by AIST that Ms Rind could return part-time provided a suitable “job share” partner was recruited to cover the remaining days. When no suitable candidate was found in time, the parties entered into heated correspondence. AIST reiterated its desire for Ms Rind to return to work and defended the reasonableness of its actions, whilst Ms Rind’s representative asserted that the employer’s conduct had made Ms Rind’s continuing employment unviable.

Decision to refuse “not reasonable”

Commissioner Lewin confirmed that the standard test for constructive dismissal was whether the conduct of an employer is sufficiently inimical to the continuation of the contract of employment and the employment relationship.

Commissioner Lewin then sought to apply this “test” by considering whether the reasons given for refusing Ms Rind’s request were reasonable. After considering the impact of the external service provider used by AIST during Ms Rind’s absence, Commissioner Lewin found that it would have been reasonable for Ms Rind to return to work 3 days a week with further resources, if required, supplied by subsequent recruitment or contracted services.

Commissioner Lewin then tied this finding to the common law concept of constructive dismissal. He found that the enterprise agreement governed the relationship between employee and employer and a failure to comply with the terms of this agreement by requiring Ms Rind to “put up with a persistent and unreasonable refusal of her request to work part time” may be taken into account when determining whether the employer’s conduct was inimical to the contract of employment.

On this point, Commissioner Lewin found that:

What will be sensibly and reasonably judged to be conduct inimical to the contract of employment and the employment relationship must have regard to the gravitas of the relevant conduct. While rights to parental leave may be of recent origin in the long history of employment in Australia the right in this case is no small thing. Ms Rind’s parental circumstances fundamentally affected her capacity to work for the Company. The practical necessity of her right not to have her request to work part time until her second child reached school age unreasonably refused was essential for her continued employment to be viable. The parenting of her children was a matter of fundamental importance to her capacity to give efficacy to the contract of employment, which was formally recognised in the Enterprise Agreement.

While an opportunity for part time work on return from parental leave might not long ago have been considered a fortunate privilege, in my judgement, contemporary circumstances require a different view. Indeed, the importance of parental leave and in particular leave in relation to maternity has become a matter of vital public interest in various ways reflected in the Act and in the Award system. The matter variously attracts general legislative proposals in the public interest. Entitlements of employees are likely to vary and will be of great importance to pregnant women who conceive children while in employment.

On this basis, Commissioner Lewin found that AIST had constructively dismissed Ms Rinds and dismissed its jurisdictional objection.

Implications for employers

This case demonstrates the importance of properly considering requests for part-time work and documenting the reasons for any refusal. Whilst directly relevant to those employers who have provisions in their enterprise agreement relating to requests for flexible work, the reasoning could be extended to employees seeking to exercise their statutory “right to request” flexible work. In this way, an employee could essentially seek a Commission review of the reasonableness of the employer’s grounds for refusal, notwithstanding the legislature’s prevention of any direct review under the Act.

This exposure, coupled with the more “traditional” avenues of challenge (such as indirect discrimination on the grounds of carer’s responsibility) make this area of the law a continuing challenge for employers.

 

 

This article was written by Jane Wright, Director and Principal of Workdynamic Australia. The information in this article is for information purposes only and does not constitute legal advice. You should obtain specific advice relevant to your circumstances.