Balancing business needs and employee well-being: FWC provides further guidance on return to office requirements

The Fair Work Commission (FWC) has provided further guidance about employer directions to return to the office in the context of a flexible work dispute. The decision of Deputy President Lake in Ridings v Fedex Express Australia Pty Ltd T/A Fedex [2024] FWC 1845, makes it clear that employers cannot rely on generic statements about the productivity of working in the office in order to refuse a flexible work request. The Deputy President also commented that, in the absence of an approved flexible work request, an employee cannot unilaterally adopt their preferred flexible work arrangement but instead must comply with the lawful and reasonable directions of their employer (including if the employee has filed a dispute in the Fair Work Commission).

Facts

Mr Peter Ridings was employed by FedEx as a Clearance Classifier.

Mr Ridings initially worked full-time from the office. However, during COVID-19, he was directed to work from home, which continued until September 2022.

At this time, FedEx began to direct employees to return to the office. It adopted a hybrid working model, initially requiring employees to work two days per week from the office, which later increased to three days per week.

Mr Ridings made several flexible work requests during this time, many of which were agreed to, including a reduction in his working hours. In March 2022, Mr Ridings worked all his part-time hours from home.

In July 2023, Mr Ridings requested to work from the office only one day per week, due to his carer's responsibilities. That request was refused on the basis of business and operational requirements. FedEx said that the proposed working arrangements would likely reduce efficiency and productivity, and that as the company values in-person collaboration, it expects employees to work in the office at least three days a week. However, Mr Ridings was permitted to work remotely two days per week. This meant that he was required to attend the office two days per week, which was one day less than the company-wide policy.

Thereafter, Mr Ridings would regularly take annual leave on Wednesdays, to avoid attendance in the office. He was also permitted to work from home for a period due to a sprained ankle.

In January 2024, Mr Ridings made a further flexible work request, this time seeking to work from home on a permanent basis. FedEx engaged in multiple back and forth correspondence with Mr Ridings to understand his request. They sought further information in order to give consideration to a flexible working arrangement. On 9 February 2024 a Microsoft Teams meeting occurred in which FedEx provided Mr Ridings with the following options:

1. Mr Ridings could work 30.4 hours over 5 days.
2. Mr Ridings could work 28.4 hours a week instead of 30.4 hours a week.

Mr Ridings declined the alternatives.

The request was refused by FedEx, citing the need for in-person collaboration, knowledge sharing, and support. FedEx emphasised that their hybrid working policy requires at least three days in the office to maintain productivity and efficiency and noted that Mr Ridings' travel time to the workplace is not unreasonable.

FedEx was willing to continue Mr Ridings' previous flexible work arrangement of working 2 days in the office and 2 days at home. Mr Ridings lodged his application with the Commission on 23 February 2024. In April, Mr Ridings said that he would not comply with the return to office mandate until the Commission had made a decision about his dispute.

FedEx offered the Applicant to work 1 day a week in the office, and 3 days a week at home during the proceeding, but Mr Ridings did not agree. Arbitration was ultimately required to resolve the dispute.

Was Mr Ridings' flexible work arrangement validly made?

Deputy President Lake considered that Mr Ridings' request for a flexible work arrangement was validly made in accordance with the requirements of the Fair Work Act 2009 (Cth) (FW Act) on the basis that: Mr Ridings had carer responsibilities for his wife and children; he had been employed by FedEx for over 12 months; and the written request met the requirements of the FW Act.

See our previous alert on Jordan Quirke v BSR Australia Ltd [2023] FWCFB 209 for when a flexible work request will be validly made.

Did FedEx genuinely attempt to reach agreement to accommodate Mr Ridings' circumstances?

Deputy President Lake considered that FedEx had genuinely tried to reach agreement with Mr Ridings. In short, the Deputy President concluded that Mr Ridings had not provided additional information that would have assisted FedEx in its decision, despite being provided with opportunities to do so.

Mr Ridings took the position that FedEx had not genuinely tried to reach an agreement with him, as required by the FW Act.

Did FedEx have reasonable business grounds to refuse the request?

As noted above, FedEx refused Mr Ridings' request on the grounds of business and operational requirements asserting that the new working arrangements would likely reduce efficiency and productivity, and as the company values in-person collaboration, it expects employees to work in the office at least three days a week. Deputy President Lake considered that FedEx had not provided a sufficient explanation for the reasonable business grounds relied on to refuse the request for a flexible working arrangement.

In particular, the Deputy President noted:

• FedEx relied on a significant loss in efficiency and productivity.
• FedEx's refusal referred to the benefits of working in the office including interaction and collaboration with colleagues.
• FedEX did not account for how approving the request would be detrimental to the business.
• As part of the NES, the purpose of flexible working arrangements is to accommodate circumstances of individual employees if the employer is in a position to do so.
• Deputy President Lake stated that the argument that remote work could harm productivity and efficiency needs to be substantiated by evidence. Deputy President Lake suggested two examples that could be considered reasonable business grounds to refuse a request in these circumstances:
  1. if the employee was not meeting targets, is difficult to contact, and tasks were not being performed to a specific standard while he or she was working remotely; or,
  2. the lost opportunity to assist an employee to improve performance through collaboration and guidance if working from home 100% of the time.
• FedEx could have also considered Mr Ridings' wellbeing, given his long absence from the office. Full-time remote work can be isolating, specifically in a stressful home environment, and regular office attendance could ensure adequate support.
• While collaboration with colleagues is beneficial, FedEx did not adequately consider Mr Ridings' personal circumstances or explain how approving the request would harm the business. Generic HR responses were insufficient to justify the refusal on reasonable business grounds.

Lawful and reasonable directions to work from the office

In his decision, Deputy President Lake commented on the fact that despite being directed to attend the office one day per week, Mr Ridings had not complied with this direction, stating that he would instead await the Commission's decision.

Deputy President Lake commented that a flexible work arrangement cannot be worked by an employee until it is approved by an employer (or an order is made by the Commission). That is, any assumption by an employee that they are entitled to work a flexible working arrangement in the absence of such approval or order is incorrect. Regardless of an employee's preferences regarding their work arrangements, employees are required to comply with the lawful and reasonable directions of their employer in these circumstances. Deputy President Lake considered that it was inappropriate for Mr Ridings not to have done so.

Orders

Deputy President Lake ultimately ordered a temporary flexible working arrangement for Mr Ridings, providing for him to work from home three days per week and from the office one day per week (as had been proposed by FedEx but not agreed to by Mr Ridings). Given Mr Ridings' refusal to cooperate with FedEx, Deputy President Lake considered that it would be unfair to grant his request. Deputy President Lake made an order providing that, where Mr Ridings does not attend the office for two consecutive weeks, there are performance concerns, or there are genuine operational requirements which require Mr Ridings' attendance, FedEx may lawfully and reasonably request Mr Ridings to work at the office on the days that he is permitted to work from home. The arrangement is subject to review after three months to assess its impact on both Mr Ridings’ personal circumstances and FedEx’s operational requirements. After that time, Mr Ridings would need to make a new request for a flexible working arrangement if he wished to extend or vary the flexible working arrangement.

Key takeaways for employers

This decision provides further guidance for employers on how to respond to flexible work requests, including:

• the importance of considering whether additional information is required from the employee regarding their personal circumstances in order for the employer to make an informed decision about the request;
• where a request is being refused, ensuring that specific, substantiated reasons for the refusal are provided (this could include, for example, if the employee was not meeting targets, is difficult to contact, or tasks were not being performed to a specific standard while the employee is working remotely);
• avoiding generic or blanket HR responses to requests and considering the employee's personal circumstances; and,
• considering the well-being of an employee if they have made a request to work from home on a permanent basis as, depending on the circumstances, this may provide a basis to refuse the request;

If you would like more information about flexible working arrangements, please contact the Lander & Rogers' Workplace Relations & Safety team. You can read the full judgment here.

You can access our previous alerts on this topic here and here.

Article authors: partners Emma Purdue and Bridget Shelton and lawyer Jordan Kopp-Collins