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Limebite 02/24

The right to disconnect – flexibility takes a backward step

Mark Curran

The flexibility of hybrid working will be in contrast to the restrictions imposed by the new right to disconnect laws, at a time when businesses value flexibility from a human resources and economic stand point.

Outline of the new laws

 The new laws are contained in the Fair Work Legislation Amendment (Closing Loopholes No. 2) Bill 2024. They confer the following new rights:

  • an employee may refuse to monitor, read or respond to contact from an employer outside of the employee’s working hours, unless the refusal is unreasonable.
  • an employee may refuse to monitor, read or respond to contact from a third party (such as a client or customer) if the contact relates to their work and is outside of the employee’s working hours, unless the refusal is unreasonable.

These rights will be ‘workplace rights’, meaning employers cannot lawfully take adverse action against an employee for exercising (or proposing to exercise) the rights.

In determining whether a refusal is reasonable, the following must be taken into account:

  • the reason for the contact;
  • how the contact was made and the level of disruption the contact causes the employee;
  • the extent to which the employee is compensated to remain available to perform work during the period in which the contact is made or for additional working hours outside of the employee’s ordinary hours of work;
  • the nature of the employee’s role and the employee’s level of responsibility; and
  • the employee’s personal circumstances.

These factors are non-exclusive, meaning other matters can be taken into account. We suggest such factors could include the nature and size of an employer’s enterprise, whether its interests or its customers’ or clients’ interests would be likely to be prejudiced, security considerations and compliance with health and safety laws.

Disputes about these matters must be resolved in the first instance at workplace level by discussions between the parties. If those discussions do not resolve this dispute, a party may apply to the Fair Work Commission (FWC) to deal with the dispute, including by making orders to stop an employee from refusing contact or to stop an employer taking certain actions (such as disciplinary action).

The FWC will not have powers to award monetary compensation, but a party that does not comply with an order of the FWC may have a monetary penalty imposed. The FWC will also have power to dismiss an application if it considers the application is frivolous or vexatious.

The laws will commence 6 months from receiving Royal Assent (or 12 months for small businesses).

Issues raised

 As is often the case, the new laws raise more issues than answers, including:

  • What are an employee’s ‘working hours’?
  • How will the laws apply to employees that work habitually long hours?
  • How should an employee respond to a client who contacts them outside of work hours seeking urgent assistance, when the employee objects to the contact?
  • What other factors might an employer lawfully take into account in determining whether a refusal is unreasonable, for example, the operational requirements of or regulatory framework in which employer operates?

 Implications for employers and employment practices/statutory liability insurers

 The Bill does not define ‘working hours’, so these matters will be governed by employment contracts and industrial instruments. It will be particularly important that working hours are specified in employment contracts, for non-industrial instrument employees.

Employers should ensure their employment contracts and policies are suitable for the new laws. Employment contracts or policies should specify in what circumstances out of hours contact from the employer (or third parties) is reasonable.

We recommend employers establish specific policies for the right to disconnect. Amongst other things, policies should also specify:

  • how to respond appropriately to customers and clients who make work contact outside of work hours where the employee considers that contact to be unreasonable; and
  • how disputes are to be dealt with at workplace level.

Employment practices/statutory liability underwriters and claims managers should consider whether existing policy wordings will cover defence costs for disputes under the new FWC jurisdiction and/or cover statutory penalties imposed for contravention of FWC orders made. It is lawful to indemnify such penalties.

Gilchrist Connell has developed a template policy to assist employers in responding to the new laws. Please contact our Workplace Law team if you would like to know more about the template policy or have any other questions about how your business should get ready to respond to the new laws.

This publication constitutes a summary of the information of the subject matter covered. This information is not intended to be nor should it be relied upon as legal or any other type of professional advice. For further information in relation to this subject matter please contact the author.