Insights & News

March 28, 2024

Back in March 2023, Australian Greens leader Adam Bandt put forward a Private Members Bill to enshrine a new Right to Disconnect as part of the National Employment Standards.

At just one and a half pages long, the Bill envisaged a blanket provision preventing employers communicating with employees outside of work hours absent an ‘availability allowance’, and subject to two narrow exceptions for emergencies or ‘genuine welfare’ matters. The Bill sank without a trace, as it should have.

Fast forward to February 2024, when the Government introduced “Right to Disconnect” provisions at the death of the major tranche of the Closing the Loopholes reforms. There had been no debate, it simply landed and was promptly passed into law, potential criminal sanctions and all (the removal of which is the subject of further amending legislation that is expected to pass shortly).

Of course, there are those who have lauded the introduction of a statutory Right to Disconnect and opined that in general terms, it won’t be a significant issue and not much will change when the new workplace right comes into effect on 26 August 2024 (or 26 August 2025 for small business employers and their employees).

But how true is that?

Certainly, the Fair Work Commission has an idea about the potential regulatory impacts as it contemplates the specific work before it – the development of a new ‘right to disconnect’ clause to be included in all modern awards by 26 August 2024.

On 12 March 2024, the President of the Commission issued a Statement noting that in the absence of information about the new Right to Disconnect provisions in the Explanatory Memorandum, the only guidance provided by the mover of the new provisions was that they are intended to “rebuild the boundary around workers’ personal time and create a safeguard for that time” and “of course, to reduce unpaid working time and wage theft”.

Rebuilding this invisible ‘boundary’ is not a minor aim but involves a re-imagining – or ‘un-bundling’ – of an array of working practices operating amidst a complex system of legislation, industrial instruments and contractual terms, bargained for and informed by a range of influences and developments, including relevantly, flexibility gains and of course, the technological advancements that have, at least in part, facilitated those gains.

Not much involved in that, surely?

The President’s Statement referred to analysis undertaken by Commission staff of existing modern award provisions that may potentially impact on the development of the new “right to disconnect” award term and accompanying written guidelines (which the Commission will also be required to produce as to its operation).

The list of modern award provisions that may impact – or be impacted by – the proposed ‘right to disconnect’ award term is interesting and expansive, reflecting the complexity of the task at hand, including:

• Overtime provisions and rest periods after overtime
• Reasonable additional hours
• Minimum payment periods
• Recall to duty provisions, including minimum payment periods
• On call
• Telephone Allowance
• Broken shifts or the requirement to work shifts continuously
• Span of hours
• Maximum daily hours
• Averaging of hours
• Changes to rosters

The analysis of these provisions reflects that things aren’t always as simple as they seem, for example:

Minimum payment periods

The RTD could impact the interpretation and application of minimum payment periods, particularly for work outside of regular hours.

Recall to duty

The right to disconnect may influence recall to duty provisions, for example by requiring guidelines and examples of when an employee can be asked to return to work, particularly outside of regular hours.

Broken shifts

The right to disconnect may impact broken shift provisions or provisions requiring work hours to be continuously, this may require consideration on when an employee is considered ‘off work’.

Span of hours

The right to disconnect could interact with existing span of hours provisions, potentially by limiting work communications to within these specified hours.

What is evident from the analysis of the potential interactions between the new right to disconnect term and existing modern award provisions is the potential for greater regulation of things that quite possibly were operating as intended and were not in need of further regulation.

As is apparent from the initial analysis set out in the President’s Statement, the devil will be in the detail in terms of what the right ultimately entails – a task that has been delegated to the Fair Work Commission to fill in the details within the space of six months, along with all the other activities that the Commission is also required to undertake during that same period (Modern Award Review 2023/24 and a similar variation of modern awards to include a new delegates rights clause too!).

It seems, there is no right to disconnect, insofar as the Fair Work Commission is concerned.

Moreover, the Commission is provided with jurisdiction to make orders (either for employees to stop refusing contact or for employers to be prevented from either requiring contact by the employee or from taking action against an employee who has refused contact).

Despite the existing protections in the Fair Work Act 2009 (Cth) relating to reasonable additional hours (and the circumstances in which an employee may refuse to work unreasonable additional hours), the inclusion of a statutory Right to Disconnect suggests that employers and workers cannot be trusted to work out an appropriate way to structure their working relationships and arrangements. So, they will now become heavily regulated instead.

The President of the Fair Work Commission’s Statement of 12 March 2024 can be accessed here.

Note: The final timetable for the variation of modern awards to include a “right to disconnect” term was published by the Fair Work Commission in a further Statement dated 26 March 2024. The draft award terms will be published by the Fair Work Commission for comment by 15 July 2024.

March 20, 2024

Direct care workers in the aged care industry have scored wage increases of up to 28.5% after the Fair Work Commission (Commission) handed down its final decision in the three stage Aged Care Industry Work Value Case.

The Aged Care Work Value Case arose from applications to vary the Social, Community, Home Care and Disability Services Industry Award, the Nurses Award, and the Aged Care Award (together, the Awards) with the intention of securing wage increases to rectify the historical undervaluation of aged care work.

The Stage 1 and 2 decisions of the proceedings implemented an interim wage increase of 15% for direct care workers (such as personal care workers, assistants in nursing and home care workers), having regard to findings concerning changes in the work of direct care employees in aged care represent a fundamental change in the work value.

The Stage 3 decision focused on whether any further wage adjustments are justified on work value grounds for direct care employees.

Ultimately, the Commission decided that there were “work value reasons’ for the minimum award rates of pay for such employees to be increased substantially beyond the 15 per cent interim increase determined in the Stage 1 decision.” These reasons included the fact that award rates of pay for personal care workers, home care workers and assistants in nursing had never been the subject of a work value assessment and thus, “invisible skills”  (such as interpersonal and contextual awareness, verbal and non-verbal communication, and emotion management) of associated with that work had not been taken into account in setting rates of pay, the historic gender based undervaluation of nursing work and the impact of the COVID-19 pandemic (and associated increased implementation of infection control and prevention measures in aged care workplaces), staff shortages and work intensification.

In short, the decision establishes a new classification structure under the Awards for personal care workers, nurses and home care workers and associated wage increases ranging from 13.3% (for employees currently classified as Level 5 Home Care Workers under the Social, Community, Home Care and Disability Services Industry Award) to 28.5% (for employees currently classified as Level 5 personal care workers under the Aged Care Award). The increases are inclusive of the 15% interim increase.

Without diminishing the value of “indirect care” employees, such as general, administrative and food service workers, the Commission noted that such workers do not perform work of equivalent value to direct care workers justifying equal rates of pay, and accordingly, concluded that rates of pay for indirect care workers under the Aged Care Award should be increased by 3%.

The operative date for these changes has not yet been decided, with the Commission setting out a timetable for determining these matters.

A summary of the decision can be found here.

February 22, 2024

The Fair Work Legislation Amendment (Closing Loopholes No.2) Bill 2023 was passed by Parliament on 12 February 2024, ushering in a raft of changes that will impact employers across the board.

While Kingston Reid will shortly publish a broader insight regarding the changes, one particularly topical inclusion is a new ‘right to disconnect’, instigated by the Greens. This follows in some European countries’ footsteps, giving employees the right to ignore phone calls and emails from their employer (and third parties such as suppliers and customers) after work hours without being penalised, provided this refusal is reasonable.

However, one change under the new laws that will be unwound before ever taking effect is the prospect of criminal penalties for employers breaching Fair Work Commission (FWC) “stop” orders relating to the right to disconnect – a mistake in the bill that the Government has since (on 15 February 2024) introduced a further amending bill to address, even before the substantive reforms come into effect.

In this insight, we take you through what you need to know about the new right to disconnect.

For Kingston Reid’s comprehensive coverage of the Closing Loopholes reforms, visit the Workplace Law Reform: “Closing Loopholes” section of our website, here.

A new right to disconnect

The new “right to disconnect” laws – which have, understandably, attracted enormous commentary and criticism, were a last minute inclusion resulting from lobbying by the Greens.

These changes come into effect 6 months after Royal Assent (or for small businesses, 12 months after that). At the date of publication, the Act has not yet received Royal Assent.

There are several components for employers to understand about the new right:

• the right – employees will now have a positive right to refuse to monitor, read or respond to contact (or attempted contact) from their employer or third party, where the contact relates to work and which is outside their working hours, unless this is unreasonable;
  When determining whether a refusal is unreasonable, the reasons for the contact, how it is made and level of disruption caused to the employee, the extent to which the employee is compensated for being available or working additional hours, the nature of the employee’s role and level of responsibility and the employee’s personal circumstances must all be taken into account;

• FWC powers – the FWC is empowered to deal with disputes about the right to disconnect, including making determinations about whether an employee’s refusal is unreasonable. This dispute resolution power includes a capacity for the FWC to make “stop orders”;
  Depending on the issues in play, these may prevent an employee from unreasonably refusing contact, an employer from making contact or requiring an employee to respond, or an employer from imposing disciplinary action as a result of refusing contact;Before going to the FWC, the parties to the dispute must attempt to resolve the matter at the workplace level. Once a dispute is referred to the FWC, the FWC must start dealing with it in 14 days;

• Awards and guidelines – the FWC is required to ensure that modern awards include a term providing for the exercise of an employee’s right to disconnect, and also to make written guidelines in relation to the right to disconnect laws;
• Exceptions – there are various but narrow exceptions to these laws, predominantly relating to defence, national security and covert or international operations of the Australian Federal Police. It is notable that there are no more general exceptions (including for high paid employees) or capacity for exceptions to be made by regulation.

What is the impact of the new right to disconnect?

These are far-reaching reforms, with lots to unpack.

At the forefront is the fact that the refusal of an employee will, where not “unreasonable”, be the exercise of a workplace right for the purposes of the existing general protections framework.

Employers will need to tread very carefully when taking management or disciplinary action against employees for performance or conduct issues which may be connected with the exercise of such a right. For example, when making promotion decisions, it will be important that an employee is not treated unfavourably because they had refused to monitor or respond to emails outside their working hours.

Of course, this type of issue can arise in various ways, and we should expect to see this becoming a common component of general protections complaints.

Equally, employers will need to keep careful watch of how these provisions are interpreted and applied by the courts (and the FWC). For example:

• what is an employee’s “working hours” – an expression not frequently used in the Act?
• to what extent will out of hours contact be regarded as inherently reasonable for highly paid or senior employees, or employees in particular sectors?
• how will the “reason for the attempted contact” be factored into the reasonableness of refusal, if the employee’s refusal of the contact means they never knew of the reason?
• what other factors will be regarded as of key importance?

To be sure, this will be a space to watch.

To keep up with the latest developments across employment, workplace relations and workplace health and safety law, sign up to our e-newsletter, Kingston Reidable by emailing [email protected].

The views expressed in this article are general in nature only and do not constitute legal advice.

Please do not hesitate to contact us if you require specific advice tailored to the needs of your organisation in relation to the implications of these changes for your organisation.

February 7, 2024

Loss in productivity identified as reasonable business ground in employer’s decision to refuse a work from home request

The holiday break is a good time to reset and spend quality time with your nearest and dearest.  The perfect opportunity to make new memories with old friends and family.  It’s a time for awkward Santa photos, bowling slow balls for Nan in backyard cricket and carols led by Mariah Carey.  With this in mind, you would be forgiven for missing an interesting decision by the Fair Work Commission (FWC) in Gregory v Maxxia Pty Ltd [2023] FWC 2768 involving an employer’s decision to refuse a request for an employee to work from home.

Let us catch you up.

Background

The Employer provides salary packaging advice and assistance to employers.  The Employee was employed by the Employer as a Business Development Manager.  His employment contract required his attendance at the Employer’s premises, but he was permitted by the Employer to work from home during the COVID-19 pandemic.

In August 2023, the Employee applied for a flexible working arrangement (FWA) where he sought to work 100% of his working hours remotely.  The reasons for the application included the Employee’s parental responsibilities and his “inflammatory bowel disease” (which was supported by a letter from his doctor).  In response to the request, the Employer proposed that the Employee work 20% in the office until the end of September 2023.  The Employer suggested that the Employee then work 40% of his time in the office after September 2023 and offered him the ability to allocate his office days each week to accommodate the days he would have custody of his child, but the Employee rejected this proposed arrangement.

The Employee filed an application for the FWC to deal with a dispute pursuant to section 65B of the Fair Work Act 2009 (Cth) (Application) in respect of the request for a FWA in September 2023.

 The Decision

The Employer submitted that the decision to reject the request was on the basis of multiple factors, including for example:

• client expectations of service delivery and productivity;
• the Employee’s daily productivity at the time of the request was 50%, which was significantly below the requisite 80% target;
• it would be beneficial to observe and support the Employee in the office;
• the Employee’s tenure with the Employer was valuable and contributed to team culture, training and discussions for the benefit of his colleagues;
• fairness and consistency across the team in respect of remote work.

In considering the Employee’s reasons for requesting the FWA, the FWC determined that his medical condition was not covered as a “disability” for the purposes of s 65(1A)(c) of the FW Act. As a result, the FWC did not have jurisdiction to deal with the Employee’s Application on the basis of this ground.   However, the FWC confirmed that it did have jurisdiction to consider the Application on the basis of the Employee’s family responsibilities.

The FWC identified that, while the Employee had a reasonable basis for proposing the FWA for the week that he would have care of his child.  However, the FWC noted that the Employee was not the primary carer in the second week and that the Employer had made a genuine attempt to compromise with the Employee.  As a result, the FWC held that the Employer had reasonable grounds in refusing the Employee’s FWA request for 100% remote work.

 Takeaways

In making findings that the Employer had reasonable grounds for rejecting the FWA request Commissioner Platt held the following:

“I accept that it is desirable for there to be face to face contact within workforce team. I accept that a face to face presence would allow for observation, interaction and (if necessary) coaching to improve Mr Gregory’s productivity and provide him with greater support. I accept that Mr Gregory’s knowledge and experience could be more easily accessed by less experienced team members on a face to face basis.”

While each request for a FWA will turn on its distinct facts, it is apparent from the above that productivity and cultural factors may be sufficient to demonstrate reasonable grounds for refusing a request to work remotely.

The FW Act was amended in June 2023 to provide employees with further support in relation to requests for flexible working arrangements.  These amendments have resulted in further obligations on employers to undertake additional steps before making the decision to refuse a FWA (for example, before refusing the request, employers must meet with employees to discuss and consider alternative working arrangements with them).  As a result, it is important for employers to consider these obligations in relation to flexible work requests and carefully consider the reasons it provides for refusing a request.

If you require assistance in respect of any of the recent changes to the FW Act or flexible work arrangements, please let us know.

Around eight months have passed since the introduction of the intractable bargaining provisions into the Fair Work Act 2009 (Cth). These provisions create a process for the Fair Work Commission (FWC) to arbitrate enterprise bargaining disputes, and to facilitate the making of enterprise agreements, in circumstances where bargaining has become ‘intractable’ (the trusty Macquarie Dictionary says this means: “hard to deal with”).

So how did we get here? Where to from here? And what does this all mean?

How did we get here?

On 6 June 2023, the intractable bargaining provisions replaced the old schemes of issuing ‘serious breach declarations’ and ‘bargaining related workplace determinations’.

Under the old schemes, the FWC could make ‘serious breach declarations’ (i.e. where there were serious and sustained contraventions of a good faith bargaining order that significantly undermined the bargaining process), which then gave the FWC scope to make ‘bargaining related workplace determinations’ if negotiations remained unfruitful.

The language in the old schemes (think “serious and sustained”, “significantly undermined”, “exhausted all other reasonable alternatives to reach agreement” and “agreement… will not be reached”) created a high bar for applicants to meet in order to satisfy the FWC that a ‘serious breach declaration’ should be made.

The upshot is that the old schemes were not used and the FWC was never called on to make a ‘serious breach declaration’.

However, under the current intractable bargaining scheme, the new standard of ‘reasonableness’ significantly lowers the bar for employees, unions and employers to request the FWC’s intervention in making bargaining determinations.

The current law

The current intractable bargaining scheme is similar to its predecessor in that a ‘declaration’ comes first.

The FWC may grant an ‘intractable bargaining declaration’ in relation to a single or multi-enterprise agreement (excluding greenfield agreements), which then allows it to arbitrate a bargaining dispute, with the arbitrated outcome being an ‘intractable bargaining workplace determination’.

The FWC may grant an ‘intractable bargaining declaration’ if:

• an application has been made (noting that an application cannot be made until the later of 9 months after the nominal expiry date of a previous enterprise agreement or after 9 months of bargaining has elapsed);
• the FWC has dealt with the dispute under section 240 of the FW Act and the applicant participated in the process – section 240 allows the FWC to “deal with” a bargaining dispute upon application by a bargaining representative through mediation, conciliation, the making or recommendations or opinions, or arbitration (if consent to do so is provided);
• there are no reasonable prosects of the relevant enterprise agreement being reached if the FWC does not make a declaration; and
• it is reasonable to make the declaration, taking into account the views of all parties.

Notably, since the introduction of the intractable bargaining provisions in June 2023, it has been largely employers (not employees and unions) that have applied for ‘intractable bargaining declaration’.

Presumably, these employers found negotiations with union to be ‘intractable’ and then sought the FWC’s assistance in arbitrating a deal with more restrained wage and condition improvements (given the FWC must take into account the interests of all parties and the terms of an applicable enterprise agreement when making a determination).

It appears that the Greens and the Labour government have caught wind of this.

Further proposed changes – ‘no lose deals’ for Unions and employees 

Part 2 of the Closing Loopholes bill could be passed any day now.

The federal Government has signalled that it intends to accept an amendment proposed by the Greens to the intractable bargaining provisions, which provide that if an ‘intractable bargaining declaration’ is made, then any ‘intractable bargaining workplace determination’ made by the FWC cannot result in any term in the determination being ‘less favourable’ for an employee or any union than the terms of an applicable enterprise agreement.

Effectively, the proposed changes mean that once the FWC is arbitrating an intractable bargaining dispute, employees and unions cannot lose – they get to keep everything they currently have, and the FWC can only make a determination that improves upon those conditions.

The Coalition highlighted their concerns in a dissenting report included within the Senate Education and Employment Legislation Committee’s report following its inquiry in respect of the Fair Work Legislation Amendment (Closing Loopholes No. 2) Bill 2023 (published on 1 February 2024, reiterating the Victorian Labor Treasurer’s comments that the:

“… no less favourable test… removes the incentive for unions to reach an agreement as they know that they will be no worse off on a clause by clause basis as against a current enterprise agreement. The amendment also seems at odds with how bargaining works – that is, that it’s a package and during the course of bargaining trades offs are considered and made”.  

If introduced, the ‘no less favourable’ test returns us to a version of centralised wage fixing – akin to that of the 1980s and prior, where the Australian Industrial Relations Commission (the predecessor to the current FWC) had the power to arbitrate disputes which were notified by a union and as history showed, largely only resulted in improved conditions for employees and unions.

In the meantime, the FWC continues to grapple with the new intractable bargaining scheme introduced in 2023. Just this week, a Full Bench of the FWC held in United Firefighters Union of Australia v Fire Rescue Victoria (trading as FRV) [2024] FWCFB 43 that ‘agreed’ terms are those where there is a meeting of the minds or consensus, and terms that were acceded to during bargaining, but subject to a conditional reservation (i.e. approvals etc), are not ‘agreed’ terms, and parties should be able to resile from terms that were not definitely ‘agreed’.

Perhaps the only deviation from returning to 1980s industrial relations is that the crippling industry wide stoppages that were a feature of that period are unlikely to occur with these changes – because why would a union seek to take industrial action at all given the way the deck has now been stacked in their favour? They don’t need to convince their members of the virtues of taking industrial action to further their bargaining interests, and the corresponding loss of pay that results from taking protected industrial action during bargaining. Instead, they can look to the FWC and realise all of the gain, with none of the pain.

Quick takeaways

• Easier access to arbitrated bargaining outcomes means that employers need to revise their approach to bargaining and the traditional strategies that they may have used (where the threat of an arbitrated outcome was never very likely). This requires a renewed consideration of things like an employer’s internal communication strategy with employees, the timing around which an organisation will commence bargaining, and when to use the FWC’s s.240 bargaining dispute provisions.
• That said, applying for an intractable bargaining declaration does not automatically result in arbitration before the FWC. Instead, it could put pressure on the parties to come to the table and negotiate a deal. This was the case when Virgin Australia Airlines Pty Ltd made an application. The Australian Licenced Aircraft Engineers Association filed a statement that said “one matter remains unresolved” in bargaining (maximum redundancy payments). This prompted Virgin to put a revised agreement to the vote (presumably with the redundancy issue resolved) and they withdrew their application.

For further Kingston Reid commentary in relation to the making of the first intractable bargaining declaration under the current intractable bargaining scheme, please click here.