Flexible work arrangements – what happens to the employment contract?
While the benefits of flexible work arrangements are now well known, the prescriptive requirements of employees and employers when it comes to requesting these arrangements can be daunting.
Employees who have worked continuously with the same employer for more than 12 months and are a parent or have care for a child, are a recognised carer for another person, have a disability, are 55 years or older, are experiencing domestic or family violence or provide care to a family member experiencing domestic or family violence have a right to request flexible working arrangements. Their employer must consider the request and respond, either approving or denying on reasonable business grounds (or proposing alternative arrangements). At all times, an employer cannot take any adverse action against an employee for making a request.
There has been discussion about changes in the Fair Work Commission’s recent review of modern awards, providing more structure for an employer’s handling of a request from employees under those modern awards, and to this end publishing a model term guide.
However – many employers fail to consider the end result of an agreement for flexible working arrangements. What is the status of the employment contract? What happens when the arrangements are no longer convenient? Whether a written contract has been entered into or not, an agreement to allow flexible working arrangements will constitute a variation of the employment contract.
Down the track if either the employee or employer wish to revert back to their original arrangements, this would constitute a further variation of the contract which would require consent of both parties. Add into the mix a preference from one of the parties to keep the flexible arrangements in place and you have the perfect recipe for a costly dispute.
So what can you do to minimise your potential for a dispute?
The process will differ depending on whether the employee is covered by a modern award or an employment contract, and the terms of those agreements. The agreement could simply take the form of a letter from the employer or a formal Individual Flexibility Agreement.
Once agreement has been reached, it is important that the parties formalise their agreement in writing so that all parties are aware of the terms and have an opportunity to set out the mechanisms including the term of the arrangement, conducting regular reviews of the arrangements and dispute resolution methods.
If you have received a request for flexible work arrangements, we can assist you with responding to the employee and structuring the agreement to adequately protect the parties.