Requests for flexible working arrangements: how accommodating should you be?

Despite our bumpy path out of the pandemic, many Australians have adapted to working from home. In March 2021, the Australian Bureau of Statistics reported that 41% of Australians were working from home, and that 11% of men and 17% of women wanted working from home opportunities to increase.

Australian employees want a hybrid workplace

A mix of remote and in-person working would be ideal for 74% of Australians, according to PwC’s 2021 largest global workplace survey. Only 10% favoured traditional working arrangements.

With 75% of workers believing their employers will support future work from home plans post-COVID-19, how can Australian SMEs accommodate requests for flexible working arrangements without suffering financially? What opportunities exist for employers? And what rights do employees have in this increasingly urgent area of workplace relations?

Employers’ legal obligations under the Fair Work Act

Employers need to know that under the Fair Work Act 2009, every employee has the right to request flexible work. Employers must genuinely consider a request for flexible work and provide a written response to such a request within 21 days.

Can employers refuse an employee’s request?

Some business structures don’t support all flexible work arrangements. If you need to refuse a request, your decision must be based on reasonable business grounds. Reasonable grounds include:

  • the cost of accommodating the requested arrangements
  • the difficulty or impossibility of changing other employees’ working arrangements to accommodate the request
  • the impracticality for the business of accommodating the request
  • the significant loss of productivity or substantially negative impact on customer service that would result from accommodating the employee’s request.

Benefits to accommodating flexible working arrangements

From what we are seeing, flexible work arrangements are here to stay. Eighty per cent of Australian businesses currently allowing work-from-home arrangements believe the practice will carry on long-term.

Increased productivity

In 2018, Perpetual Guardian, a 240-person trust and estate planning firm in New Zealand, trialed a 32-hour, four-day week. Management recorded a 20% increase in productivity. Following the end of the trial, the four-day week was made permanent.

Inspired by Perpetual Guardian’s results, Unilever NZ, is currently undertaking a one-year trial of a four-day work week for full pay in order to boost productivity and wellbeing. In 2019, Microsoft Japan reported a 40% boost in productivity after experimenting with a four-day work week.

Australian software company SixPivot has had a “work from anywhere” policy for five years. Some employees who are caravanning fanatics can hit the road for weeks or even months, while continuing to work. One employee even worked remotely from a campsite in Mexico. The SME has recently been selected as number two in the Australian Financial Review’s BOSS Best Places to Work List.

Greater employee retention

Small businesses in Australia suffer from high employee turnover. With the cost of replacing a single staff member in small business estimated at $22,135, employers who adopt a flexible approach to working conditions will benefit by attracting and retaining talent.

Insurer Suncorp recently redesigned its contact operating model to incorporate “Work at Home Hubs”. More than 600 contact centre employees work predominantly through these home-based hubs. Suncorp reported improved engagement and lower staff turnover without affecting the customer experience.

Future-proofing your workplace

Taking a longer term view, Australia’s ageing population will affect labour force participation rates. Growth in the labour force is already slowing. The Australian government has recognised women’s workforce participation as an economic priority to reduce fiscal pressures associated with providing welfare to an ageing population.

The sudden shift to flexible work arrangements in 2020, supported by the digital technologies facilitating remote and flexible work, has contributed to an increase of 54,000 more women in full-time jobs in NSW than prior to the pandemic.

Time to adopt flexible work options in your SME?

We feel it’s fair enough for employers to do their research when responding to an employee’s request for flexible working conditions. Iceland’s recent experiment with a four-day work week on full-time pay is a good example of media headlines obscuring a more complex reality.

But a growing body of research indicates that hybrid arrangements are here to stay, and that’s a good thing. Not only do flexible working conditions offer small business an opportunity to attract and retain good people, they are boosting productivity – and the bottom line.



Any decision that affects your business has legal implications. Contact us today to help secure your business for whatever tomorrow brings.

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