Right to Request Regulation in Australia: A Step in the Direction ofEmployee-Oriented Flexibility?
Sara Charlesworth and Iain Campbell
Abstract
The election of a federal Labor government in November 2007 has opened up a valuable opportunity to modernise the system of labour regulation in Australia. The new Labor government has promised reforms that will (slowly) remove the worst features of the previous regime, introduced during the period from 1996 to 2007. More positively, it has promised to use the increased reach of the federal industrial relations system to introduce stronger legislated minimum standards (‘National Employment Standards’), which will be supplemented by additional standards through ‘modern awards’ as well as whatever improved wages and conditions are secured by trade unions through single-employer collective bargaining. The proposals point in the right direction, but they are cautious and may not be sufficient to establish a truly modernized system. This paper focuses on one innovative idea that has been picked up by the federal Labor government and by the state Labor government in Victoria - what can be called ‘right to request regulation’, which would enhance the rights of individual employees to vary their working arrangements to suit their circumstances (in particular their need to balance paid work and caring responsibilities). The paper reviews the two models recently introduced in Australia and compares them with the similar legislation found in the United Kingdom, the Netherlands and Germany. The two models can be seen as welcome steps forward in securing greater employee-oriented flexibility, but they are compromised by significant problems in their design.
Introduction
The issue of work/family balance, or work/life balance, is an increasingly prominent one in Australia and other member countries of the Organisation for Economic Co-operation and Development (OECD). Deep-seated structural changes in families and workplaces, such as the erosion of the traditional model of the male breadwinner and female homemaker, have led to growing tensions for many workers between their participation in paid work and their participation in life outside the workplace, including in particular the world of unpaid caring for children and sick or disabled relatives.[1]
Workers are increasingly demanding more ‘flexibility’ from their workplaces, especially in regard to working time, in order to assist them in meeting their caring responsibilities and resolving the tensions around work and caring responsibilities. This can of course be left to the individual, who can always approach their employer or supervisor with a request for some flexibility change to suit their circumstances. But it is now widely accepted that good policy in this increasingly important area requires a broader societal approach, including in particular the introduction of minimum standards that can guide the employer in his or her response and guarantee a result that meets social and economic goals.[2]
Enhanced leave entitlements are one avenue of advance for employee-oriented flexibility to achieve better work/family balance, and most OECD countries have witnessed major advances in the development of new forms of leave such as parental leave and carers’ leave. But also important is the ability of employees to vary their working hours over a longer period, including, in particular, the ability to reduce their working hours and move to a schedule of part-time work. This can facilitate longer-term adaptation without the need for the worker to leave their job and find another one. It thus avoids the problem of poor job quality in part-time work and paves the way for a return to full-time hours when circumstances change. Many OECD countries, especially the Scandinavian countries, have introduced rights for workers to move to a part-time schedule, often in association with a return from parental leave.
More recently, this approach has been extended in some countries through what is called ‘right to request’ (RTR) regulation. The case most frequently cited in Australia is that of the United Kingdom (UK). Since 2003 the Employment Act 2002(UK) has provided a formal right to request changes in the quantum, scheduling and location of working-time arrangements for employees with children under school age, with disabled children up to 18 years[3] and, since 2007, for employees with dependent adults.[4]Similar regulation is also in place in the Netherlands in the Working Time Adjustment Act 2000, and in Germany in the Part-time and Fixed Term Employment Act 2000.[5] In addition to these European examples we can cite New Zealand, where recent amendments to the Employment Relations Act 2000(NZ)will provide employees with children less than five years, with disabled children and/or with dependent relatives with the right to request a variation to their hours, days or place of work from July 2008.[6]
Typically,RTR regulation has a number of elements, whereby certain employees have a right to request certain variations to working-time arrangements; their employer has a duty to seriously or reasonably consider the request; the employer can only refuse on certain business grounds; and there is a grievance mechanism and a right of appeal to a court or tribunal where agreement cannot be reached. As this indicates, such regulation does not provide an absolute right for employees to vary their working-time arrangements according to their needs. It offers a ‘lighter touch’ approach. On the other hand, however, it is much more than just a right to ask. Indeed, the terminology of ‘right to request’ is somewhat misleading since the key aspects of the regulation are not to do with the request as such but rather to do with the duties placed on the employers in responding to any request and the provision of a mechanism to resolve any disputes.
In essence, RTR regulation offers a workplace process and a procedure for making and considering employee requests to change working-time arrangements. There are two main features that distinguish such regulation from most other working-time regulation. First, it provides the basis for an individual right rather than a collective right - it is only activated via an individual employee’s request in respect to changes to his or her individual working-time arrangements. Second, it is facilitative or procedural regulation - it is not a right to achieve changes to working-time arrangements but a right to request changes.
Modest advances in helping workers to balance their paid work and family responsibilities have been achieved in Australia, but for the last fifteen years governments have been noticeably reluctant to act. As a result the country appears as a laggard, particularly when contrasted with many countries in the European Union. The fact that Australia remains one of only two OECD countries without a national paid maternity leave scheme reflects the largely passive approach taken by the federal government to the provision of family-friendly benefits over the last decade. This approach has relied on promoting the voluntary initiatives of larger employers. Trade union initiatives aimed at generalising family-friendly benefits have been consistently opposed on the grounds this will impose unreasonable burdens on employers, particularly small business.[7] Not surprisingly, as the OECD has politely noted, there is only a “low penetration” of family-friendly work practices in Australia,[8]with most available only to a minority of employees, primarily composed of higher-skilled workers in large and/or public sector enterprises.
In recent years, however, RTR regulation has been increasingly discussed in Australia. It first came to public attention in what was known as the Family Provisions Test Case run by the peak union body, the Australian Council of Trade Unions (ACTU) before the Australian Industrial Relations Commission (AIRC) in 2004.[9] This Test Case was designed to introduce new standards into federal awards for flexible working-time arrangements to help workers balance their paid work and family responsibilities.[10] Drawing on the experience of RTR legislation in the United Kingdom, one of the main ACTU claims was for an employee to be able to request a change in hours to enable the employee to provide care, with an obligation on the employer to consider such requests seriously. The change requested related not only to the number of hours worked but also to the times at which work is performed.[11] Also included among the ACTU claims were new rights for an employee to work on a part-time basis after returning from parental leave until the child reaches school age[12] and to access up to an additional 12 months unpaid parental leave.[13]In its 2005 decision, the AIRC provided only for eligible employees to have a ‘right to request’ three new parental leave provisions: an increased period of simultaneous parental leave; an additional 12 months unpaid parental leave; and for employees with children below school age a return to work on a part-time basis after parental leave.[14] The obligation on the employer was to ‘consider’ the request and only to refuse the request ‘on reasonable grounds related to the effect on the workplace or the employer’s business’.[15] Examples given of such grounds were ‘cost, lack of adequate replacement staff, loss of efficiency and the impact on customer service’.[16] Any disputes would of course be handled by the normal dispute resolution procedures specified in awards. At the time the AIRC described its decision as a “cautious” one, which could be built on at a future hearing, subject to a review of its efficacy in meeting the needs of employees and its impact on the ability of employers to manage their businesses efficiently.[17]
The AIRC decision introduced a limited ‘right to request’ part-time work into Australia. In the normal course of events the decision could have been expected to be put into effect through new clauses in federal and state awards. However, the decision was overshadowed and disrupted by the radical WorkChoices changes introduced by the federal Coalition government in March 2006, which displaced many awards and indeed threatened the end of the award system. The results of the AIRC decision were not incorporated into the stripped-down minimum conditions identified as Australian Fair Pay and Conditions (AFPC) standards. Moreover, the AIRC Test Case provisions were only incorporated into a small minority of awards.[18]
Though stalled in its implementation, the AIRC decision was accompanied by some academic discussion of the relative merits of this approach to work/family balance[19] and some suggestions for new initiatives.[20] In particular, it aroused interest in the Australian Labor Party (ALP), leading to two new models of more generalised RTR flexible work regulation. In the first part of this article we consider these two different models. The first model is the federal government ‘requests for flexible working arrangements standard’ to be legislated later this year as one of the ten new National Employment Standards through amendments to the Workplace Relations Act 1996 (Cth). The second model, whichhas been recently enacted at the state level through amendments to the Victorian Equal Opportunity Act 1995 (Vic), makes an employer’s refusal to accommodate the family responsibilities of an employee a new form of discrimination.[21] We set out the main rationale and features of these models and argue that, while novel in the Australian context, they are relatively limited, albeit in different ways, particularly when compared to the European models from which they derive.In the second part of the paper we draw on the European experience of RTR regulation, particularly in the UK, to consider the sort of regulation that might be most effective in the Australian context in delivering on policy goals such as better work/ family balance, job quality and gender equality.
The Two Australian Models
The Federal Industrial Relations Model
During the 2007 federal election campaign, in which opposition to WorkChoices was one of the key issues, the ALP committed itself in government to replace the five AFPC standards with ten National Employment Standards, intended to ‘guarantee a safety net of decent, relevant and enforceable minimum wages and conditions for working Australians’.[22]Its victory in the election paved the way for this policy to be implemented. The text of the legislation for the ten National Employment Standards was released on 16 June 2008,[23] following an earlier Exposure Draft published for public comment.[24] The ten standards, to be legislated later in 2008 with the aim of coming into force from 1 January 2010, include entitlements in respect of maximum weekly hours, requests for flexible working arrangements, parental leave and related entitlements, annual leave, personal/carer’s leave and compassionate leave, community service leave, long service leave, public holidays, notice of termination and redundancy and a fair work information statement.[25]
The parental leave standard provides that an employee who takes unpaid parental leave for his or her available parental leave period may request his or her employer to agree to an extension of unpaid parental leave for a further period of up to 12 months,[26] and that the employer must agree to the proposed extension unless the employer has reasonable business grounds for refusing.[27] Under a separate standard, known as the ‘therequests for flexible working arrangements standard’, employees who are a parent of a child under school age or who have responsibility for the care of a child under school age are able to request flexible working arrangements.[28]The stated aims of this standard are to ‘help all working families balance their work and family responsibilities’ and to help ‘businesses to manage their workforce to encourage greater workforce participation’.[29]‘Flexible working arrangements’are not defined,although a note in the standard provides that examples of changes in working arrangements include ‘changes in hours of work, changes in patterns of work and changes in location of work’.[30] The obligation on employers is to ‘consider’ a request, with the addendum that ‘requests may only be refused on reasonable business grounds’. This is less strongly worded than the parental leave standard, where an employer must agree to the request unless there are reasonable business grounds.[31]
The federal RTR model clearly draws on the Family Provisions Test Case decision. The new standard, however, differs from the AIRC decision in several ways. In some respects it appears stronger. First, in respect of flexible work, the new policy extends the RTR from part-time work to other forms of flexible work. Second, the new policy extends the group who are eligible for the RTR from eligible employees returning from parental leave,as in the Family Provisions Test Case decision,to employees who are parents with children under school-age. In other respects, however, the new RTR flexible work standard is much weaker than that provided in the Family ProvisionsTest Case decision. First, the coverage of the standard is limited to permanent or ongoing employees with at least 12 months of continuous service with the employer, and to casual employees who have been engaged on a regular and systemic basis for at least 12 months and who have a reasonable expectation of continuing engagement with the employer on a regular and systemic basis.[32] This qualification requirement will exclude many of the working parents of preschool-age children who are most likely to make requests. In February 2006 for example, 21 percentof working women of child bearing age (25-44 years) had less than 12 months service with their current employer.[33] Second, although the RTR flexible work standard similarly suggests that ‘requests may only be refused on reasonable business grounds’, what might be considered reasonable business grounds are not elaborated in the new standard. Indeed, in May 2007 the then Shadow Minister (now Minister)for Small Business, Craig Emerson, responded to Australian Chamber of Commerce and Industry (ACCI) concern about the ALP’s RTR proposal by assuring ACCI that‘[a]ny adverse impacts on business practices are grounds to refuse flexible work arrangements or a 12-month extension of parental leave’.[34]
Finally, and perhaps most importantly, the new RTR standard provides no enforcement mechanism and there is no grievance procedure or process to provide redress where requests are unreasonably refused. In announcing its National Employment Standards the government stated that legislation to be introduced later in 2008 would include compliance in relation to the National Employment Standards.[35] To date, however, the extent to which the new ‘independent umpire’, Fair Work Australia, will deal with disputes around the National Employment Standards is still unspecified. In respect of two of these standards, the RTR flexible work and the RTR up to an additional 12 months of unpaid parental leave, the Exposure Draft explicitly ruled out a dispute resolution process or what it termed ‘third party involvement’.[36] In these two cases, where an employer refuses the request, the process will apparently end with an employer putting the reasons for the refusal of a request in writing. As Craig Emerson put it in May 2007: ‘There’s no adjudication, no legal process and no union official under thebed’.[37] This explicit rejection of any grievance mechanism where an employer refuses a request means that these standards will be poor ones.