Fair Work Commission rejects request to work entirely from home

This update examines the recent decision of the Fair Work Commission in Peter Ridings v Fedex Express Australia Pty Ltd T/A Fedex.

Facts

The employer (Fedex) operated part of its business through an office in Brisbane.

The employee commenced employment with the employer in 2015 and worked from the employer’s Brisbane office.

The employee initially worked full-time, but from 2019, he commenced part-time employment, working 4 days per week.

Between July 2019 and January 2024, the employee made four separate flexible working arrangement requests. Each of those requests were made for the purposes of him needing to provide care to family members from home.

The first two requests were agreed to by the employer. The third request (in August 2023) was to work 3 days per week in the office and 1 day per week from home. That request was initially refused, but ultimately, a compromise was reached for the employee to continue working 2 days per week in the office and 2 days per week from home. Relevantly, at this time the employer’s policy position was for employees to work from the office at least 3 days per week.

In January 2024, the employee made a fourth request, this time to work 100% from home for an indefinite period. His reasons for the request were almost identical to the third request. The request was ultimately rejected by the employer, but the employer did make an offer for the employee to work 1 day per week in the office and 3 days per week from home.

The employer’s stated reasons for rejecting the employee’s request included:

• ‘The Company is committed to in-person collaboration and interaction, knowledge sharing, training, support and culture-building….In your role as a Classifier, you benefit from having in person discussions with colleagues…You also have the ability to approach Brokers for advice…These in person interactions in relation to your role and responsibilities support more productive and efficient working.’;
• ‘…Permanently working from home full time does not support the Company’s hybrid working expectations for all employees.’;
• ‘Face-to-face presence allows teams to have an appropriate balance of digital and physical interaction in the workplace.’; and
• ‘Travelling to and from work is a requirement to fulfil your employment obligations, and your travel time to the workplace is not unreasonable.’

The compromise offer was rejected by the employee, who had decided to work entirely from home without the employer’s approval.

The employee concurrently commenced a dispute based on the employer’s refusal of the request, and on the basis that no ‘reasonable business grounds’ had been provided.

Relevant legislative background

Sections 65, 65A, 65B, 65C and 66 of the Fair Work Act (‘the Act’) deal with requests for flexible working arrangements.

Section 65 provides an employee with a mechanism to request flexible working arrangements.

If the employee’s request is validly made, the employer must respond in writing within 21 days.  An employer may refuse the request where there are ‘reasonable business grounds’ to justify the refusal.

Section 65A(5) defines ‘reasonable business grounds’ (non-exhaustively) as follows:

“(a)  that the new working arrangements requested would be too costly for the employer;

 (b)  that there is no capacity to change the working arrangements of other employees to accommodate the new working arrangements requested;

 (c)  that it would be impractical to change the working arrangements of other employees, or recruit new employees, to accommodate the new working arrangements requested;

 (d)  that the new working arrangements requested would be likely to result in a significant loss in efficiency or productivity;

 (e)  that the new working arrangements requested would be likely to have a significant negative impact on customer service.”

Section 65A(6) provides that if the request is to be refused, the employer must issue a written response that, amongst other things, details the reasons for the refusal, sets out the particular business grounds for refusal and explains how those grounds apply to the request.

The Application

The employee applied to have the matter arbitrated by the Commission and submitted that the  Commission should order that he be permitted to work 100% work from home, including on the basis that the employer did not communicate its ‘reasonable business grounds’ when refusing the employee’s request.

Initial observations by the Commission

The Commission observed that an employee does not possess a right to implement their own requested flexible work arrangements. In this case, the employee was not entitled to simply begin working 100% of his hours from home without the employer’s approval.

The Commission also observed that an employer is required to ‘demonstrate a likely detriment to the business’ when refusing an employee’s flexible work arrangements request. In this case, the Commission accepted that there was likely to be detriment to the employer, but that the employer had failed to set that out in the written refusal.  The employer, for example, did not explicitly state that the request would likely decrease efficiency and productivity in the business, and provide reasons why.

Instead, the employer’s written response focussed on the benefits of working in the office. The Commission characterised that response as a ‘generic and blanked HR answer’ and emphasised that it was not sufficient to comply with the Act.

The Commission also emphasised that the written reasons for refusal should consider the employee’s personal circumstances and provide a substantiated explanation of how, in light of those circumstances, the approval of the request would be detrimental to the business.

The order itself

Despite not being satisfied with the employer’s reasons for refusing the request, the Commission still did not accept that it was appropriate to order that the employee work from home for 100% of his ordinary hours.  Instead, the Commission made orders to institute an arrangement consisting of 1 day per week from the office and 3 days per week from home (subject to particular conditions which were placed on the employee).

The Commission set-out a number of factors that could be taken into account in making such an order. In this case, the Commission expressly considered the following matters:

Factors	Who it favoured / went against
The employer’s demonstrated willingness to negotiate and find a compromise arrangement.	This factor went in favour of the employer.
The employee’s unwillingness to compromise and consider alternative arrangements in cooperation with the employer, including the employee’s unwillingness to trial a compromise arrangement.	This factor went against the employee.
The workplace tension which resulted from the employee insisting on the recording of calls, the need to correspond via email, and the refusal to work in the office.	This factor went against the employee.
The employee’s genuinely challenging family circumstances and care obligations.	This factor went in favour of the employee.
The number of days that could be worked by the employee in the office without imposing excessive difficulty on the employee (noting the family had NDIS funding assistance for care purposes).	This factor had aspects that went in favour of the employee and against the employee.
The employee’s deficiencies in elaborating on the extent of his care requirements and demonstrating that those care requirements meant he should be permitted to exclusively work from home.	This factor went against the employee.
That the employee only had a reasonably short journey to travel to the workplace.	This factor went against the employee.
The employee’s detachment from work colleagues and likely reluctance to return to the office.	This factor went against the employee.
The employer genuinely losing value in the employee by virtue of the employee missing physical interaction with others in the office.	This factor went in favour of the employer.
The acceptance that the employee was one of the least efficient and productive employees and that attendance in the office could potentially address this (to the benefit of all parties).	This factor went in favour of the employer.

The Commission found that requiring the employee to come into the office 1 day a week was appropriate to strike a balance between these competing factors and would not impose excessive difficulty on the employee. The Commission’s order was for a temporary and short period of 3 months to facilitate a ‘test period’ where the employer and employee could gauge the feasibility of the arrangement and encourage the parties to negotiate, on their own terms, a sufficient compromise arrangement for the longer-term.

Key lessons from this case

The key take-aways from this decision include:

• If an employer refuses a flexible working arrangements request, there is an obligation on the employer to provide written reasons which both set out and substantiate the likely detriment to the business if the request was granted.
• Employees do not possess an inherent right to self-implement requested flexible working arrangements. The arrangements can only implemented where an employer provides consent or where the Commission makes an order to implement arrangements.
• The Commission will weigh up a number of varied factors when determining the appropriate orders to make in response to such an application.