Blanket HR responses do not amount to “reasonable business grounds” for rejecting a flexible work arrangement

In the recent decision of Peter Ridings v FedEx Express Australia Pty Ltd t/a Fedex [2024] FWC 1845, Deputy President Lake found that reasonable business grounds for refusal of a flexible working arrangement under section 65A(3)(d) of the Fair Work Act 2009 (Cth) (FW Act) must be particularised and not a generic blanket response.

Facts

Peter Ridings commenced employment for FedEx Express Australia Pty Ltd (FedEx) as a Clearance Classifier on 13 April 2015. Mr Ridings initially worked full-time, but requested and subsequently received approval to work part-time four days a week (First Request).

During COVID-19, Mr Ridings worked entirely remotely for four days a week from April 2020 until September 2022, however this flexible working arrangement expired on 1 December 2019. Whilst Mr Ridings did not lodge a new flexible working arrangement after that date, there was an informal agreement with his manager permitting him to continue this arrangement.

In October 2021, Mr Ridings lodged a new flexible working request to work his four days per week entirely at home (Second Request), which was approved and became a permanent arrangement from March 2022. The Second Request was supported by medical documentation that required Mr Ridings to provide caring responsibilities for his children.

In the middle of 2023, FedEx updated its hybrid working model and foreshadowed that staff, including part-time staff, would be required to work from the office at least three days a week. Accordingly, in July 2023, Mr Ridings made a further request to work three days from home and one day in the office (Third Request) due to increased caring responsibilities including for his wife. The Third Request was rejected by FedEx, citing potential productivity losses and the need for in-person collaboration due to their updated hybrid working model. Instead, Mr Ridings was permitted to work from home two days per week and from the office two days per week. This led to considerable tension of the working relationship.

On 10 January 2024, Mr Ridings lodged another flexible working request seeking to work four days a week from home indefinitely (Fourth Request), based on identical reasons. Following multiple back and forth discussions, on 23 February 2024, FedEx rejected the Fourth Request, citing, amongst other things:

• FedEx’s commitment to in-person collaboration and interaction, knowledge sharing, training, support and culture building;
• The benefits from in person work in Mr Ridings’ role; and
• The Fit for Purpose hybrid working policy maintained by FedEx.

Mr Ridings claimed that this letter did not contain any reasonable business grounds for the refusal of the Fourth Request and applied to the Fair Work Commission to resolve the dispute about his request for flexible work arrangements. At that time, FedEx offered that Mr Ridings could instead work from the office only one day a week, but that offer was rejected. Given that the matter was not able to be resolved by the parties, Deputy President Lake proceeded to resolve the dispute by arbitration.

Decision

The relevant question in determining whether the Fourth Request was validly denied was whether there were reasonable business grounds for FedEx to refuse the request, as required by section 65A(3)(d) of the FW Act.

Importantly, Deputy President Lake noted that ‘generic and blanket HR answers’ like the importance of in-person collaboration and team engagement are not sufficient alone to establish a reasonable business ground for refusing a request. Instead, the reasons for refusal need to be substantiated and should take into consideration the Applicant’s personal circumstances.

Deputy President Lake was, however, critical of Mr Riding for refusing to work from the office on the one day a week offered by FedEx while the dispute was being resolved. That, Deputy President Lake found, was a lawful and reasonable direction with which Mr Ridings should have complied until the dispute was resolved.

However, given the breakdown in working relationship, Deputy President Lake observed that even though FedEx had not established reasonable business grounds to refuse the request, it had nevertheless identified some legitimate concerns, such as the inability to have efficient informal discussions when needed and concerns about Mr Ridings’ willingness to follow the order in good faith. On this basis, it was ordered that Mr Ridings should trial an arrangement to work three days from home and one day in the office for three months, after which the situation would be reassessed.

Take Home Messages

In dealing with flexible working arrangement requests, employers must endeavour to ensure that a genuine effort has been made to accommodate the employee’s request, particularly when they have provided valid reasons and evidence to support.

Employers must also ensure that each request for flexible working arrangements are examined on its merits, rather than making an assessment on a generic basis without providing clear and specific reasons as to why business operations may be adversely affected.

Should you have any questions in relation to this article, please contact Sathish Dasan on +61 8 8210 1253 or sdasan@normans.com.au or Annabelle Narayan on +61 8 8210 1292 or anarayan@normans.com.au.