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June 2008

Flexible Working Arrangements

It’s the process that will matter

With effect from 1 July 2008, certain employees have been given the right to request flexible working arrangements to enable them to discharge care and responsibilities. Flexible working arrangements can relate to hours of work, place of work or days of work (or a combination).

Eligibility

In order to be eligible to make a request for flexible working arrangements, the employee must:

  • Have been employed by their employer for six months or more.
  • Not have made another request for flexible working arrangements during the past 12 months (irrespective of whether that request has been accepted or declined).
  • Have the care of another person.

There is no particular statutory definition of what constitutes a “care” or as to what level of care is required. However, it is anticipated that it would include the following situations:

  • Caring either for the employee’s children or the children of others.
  • Caring for other adults (e.g. elderly parents or others).
  • Caring for Whanau.
  • Caring for friends.
  • Caring for neighbours.

There is no requirement for the employee to be related to the person for whom they have care responsibilities.

The Application Process

It is important to note that although an employee can only make one formal request for flexible working arrangements in any 12 month period, there is nothing to prevent an employee from making informal requests more frequently.

Indeed, it can be beneficial to both the employee and the employer if the issue is dealt with initially on an informal basis so that both parties can see how the proposed arrangements might work in practice. This may lead to a more workable permanent arrangement being entered into.

If, however, a formal request is made, then the request must:

  • Be in writing and be dated.
  • State the name of the employee.
  • State that the request is being made under Part 6AA of the Employment Relations Act.
  • Explain the desired working arrangement and whether the proposed working arrangement will be permanent or for a fixed period of time.
  • Specify the date upon which the new arrangement is to take effect and come to an end (unless permanent).
  • Explain how the variation will assist the employee to better care for the person concerned.
  • Explain in the employee’s view what changes, if any, the employer will need to make to accommodate the flexible working arrangements.

Duty to Consider

Employers have a legal duty to consider such requests. Employers must deal with a request as soon as possible, but no later than three months after the formal request has been made.

If the employer is willing to approve the request, then the employee should be given written confirmation of the position. Unless the amended working arrangements are intended only to be for a set period of time, the change will be a permanent change to the employee’s terms and conditions of employment. In such circumstances, the employee has no right to revert to their previous working arrangements, unless otherwise agreed.

An employer may only refuse a request for flexible working arrangements in three situations:

  • If the employee is not eligible to make the request.
  • The request cannot be accommodated on one or more of a number of business grounds.
  • If any requested working arrangements would be inconsistent with a collective employment by which the employee is bound, (in which case the request must be declined).

The business grounds referred to above include the following:

  • An inability to reorganise work amongst existing staff.
  • An inability to recruit additional staff.
  • Detrimental impact on quality or performance.
  • Insufficiency of work during periods the employee proposes to work.
  • Planned structural changes.
  • Burden of additional costs.
  • Detrimental effect on ability to meet customer demand.

If the employer is to refuse the request then the employer is required to notify the particular ground being relied upon and provide an explanation of the reasons for that ground

Resolution of Disputes

In the event that the employee considers that the employer has either wrongly determined that they are ineligible or has not followed the correct process for dealing with their request, the matter must first be referred to a Labour Inspector, followed by mediation.

In the event that the matter remains unresolved after mediation, an application may be made to the Employment Relations Authority. However, the Authority will only consider whether or not the employer had wrongly determined that the employee is ineligible or has followed an incorrect process. The employer’s reasons for the refusal may not of themselves be challenged.

Summary

It is expected that the introduction of flexible working arrangements will result in employers needing to deal with a number of requests. These requests need to be properly dealt with. Dealing with such requests appropriately is essential, because employers who wrongly determine that an employee is eligible or who failed to follow the appropriate procedures can expect to find their decisions challenged in the Employment Relations Authority and potentially face a penalty of up to $2000. In this situation, the process that is adopted by the employer is the most important factor because, as noted above, the employer’s determination that there is a legitimate business reason for declining the request is not of itself open to challenge. Employers would therefore be well advised to seek advice immediately that they receive a request from an employee (whether informal or otherwise). We can assist in that regard.