28 August 2008

Employers to be faced with more stringent obligations to accommodate employee flexible working arrangements

From 1 September 2008, the Equal Opportunity Amendment (Family Responsibilities) Act 2008(Vic) (Amendment) will come into operation. 

The main purpose of this Amendment is to expand the range of what constitutes discrimination against parents and carers in employment-related areas under the Equal Opportunity Act 1995 (Vic) (EO Act). 

Victorian Attorney General, Rob Hulls said “key failings with the current Act were that it relied on individuals to make complaints, provided the Equal Opportunity and Human Rights Commission with limited powers to enforce the law, and focused on complex complaint-based processes rather than early intervention and flexible alternative dispute resolution processes”.

The Amendment forms part of emerging regulation in this area which aims to provide an avenue through which people with carer responsibilities are able to request a change at work to accommodate their responsibilities, such as an alteration of working hours, or an ability to work from home. 

The Amendment will place greater obligations on employers to accommodate flexible working arrangements for employees with children and provides that an employer must not, in relation to the work arrangements of a person offered employment, unreasonably refuse to accommodate the responsibilities that the person has as a parent or carer.  Therefore refusal can only be on reasonable business grounds.

The Amendment expands the definition of discrimination to encompass discrimination consisting of an unreasonable failure by an employer to accommodate a worker’s parenting or caring responsibilities.  The explanatory memorandum and second reading speech confirm that it is the clear intention that there be three separate and independent forms of discrimination:
direct, indirect and failure to reasonably accommodate.  However, a complainant arguing discrimination on this ground needs to prove direct or indirect discrimination to make out their complaint.

Discrimination on the ground of failure to reasonably accommodate can be found to occur in four situations: in relation to offering employment, existing employee’s terms and conditions, principals in relation to contract workers, and firms in relation to partners or people invited to become partners.  

The definition of employee under the EO Act, which includes contractors and people remunerated by commission but excludes unpaid workers and volunteers, means that employers must have systems in place to ensure that no person undertaking work on their behalf is discriminated against.

The Amendment outlines various factors which are to be considered in determining whether a refusal to accommodate responsibilities is unreasonable, including the person’s circumstances, the nature of the individual’s responsibilities as a parent or carer and the financial impact on the employer in accommodating the individual’s request, amongst other things.  However, the Amendment provides that while all relevant facts and circumstances will be considered, none of the factors listed are determinative on their own, and other factors not included in the list may also be relevant and important in assessing reasonableness in a particular case.

Guidelines have been prepared by the Victorian Equal Opportunity and Human Rights Commission (EOC Victoria) in conjunction with Industrial Relations Victoria to assist employers to understand their obligations under the Amendment.  These guidelines are available on the EOC Victoria website.

Whilst the new legislation is yet to be tested, it appears that greater responsibility is being placed upon employers to provide flexible working arrangements to employees who have the responsibility of primary caregiver to their children. 

It is unclear, however, how the Amendment will operate with existing exemptions under the EO Act. Existing exemptions relate to things done with statutory authority, things done to comply with orders of courts and tribunals, pensions, superannuation-existing and new fund conditions, charities, religious bodies, schools, beliefs or principles, private clubs, legal incapacity and age of majority, protection of health, safety and property, age benefits and concessions, welfare measures and special needs, exemptions by the Victorian Civil and Administrative Tribunal and exemptions to allow compulsory retirement in the public.

From a Federal perspective, the proposed National Employment Standards (NES) which are expected to take effect from 1 January 2010 also contain provisions in relation to the ‘Right to Request Flexible Working Arrangements’ (NES Provisions).

The NES will be introduced as part of the Federal Government’s substantive changes to the Workplace Relations Act 1996 (Cth) (WR Act).

Whilst the wording of the NES Provisions is somewhat different, the effect appears to be the same given that under the NES Provisions an employer may only refuse the request on ‘reasonable business grounds’ and must provide the employee with their reasons for such refusal in writing within 21 days of the request being made by the employee.

In contrast to the Amendment, the current definition of ‘employee’ under the WR Act does not include contractors.  We are still however awaiting the final draft of the amendments to the WR Act and will provide a further update when they are released.

Whilst there is some uncertainty around the application of both the Amendment and NES Provisions, it is clear that greater obligations will be placed upon employers to attempt to accommodate employees with carer responsibilities in the very near future.

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