Flexible working arrangements – navigating the new normal

May 31, 2022
FCB Workplace Law

The availability, adaptability and scope of flexible working arrangements have become a common feature of employment arrangements since the COVID-19 pandemic took hold in 2020 and are now viewed as a key aspect of any company’s attraction and retention strategy. There is a significantly increased focus and emphasis on what flexibility can be offered, with an employee’s circumstances often being a critical defining factor in whether that employee takes up employment – or remains in it. 

Not only is it important for flexible working arrangements to be carefully implemented and structured so that they are appropriate for a business from an organisational perspective, but employers also need to pay consistent attention to a range of work health and safety considerations in non-centralised work that must be identified, controlled, and managed on an ongoing basis. 

If not an entitlement, at least an expectation 

Before the pandemic, the technology allowing many employees to work from home existed — but very few workers did work remotely. However, the pandemic sparked an experiment in which workers were forced to work in decentralised teams, and many discovered the benefits of doing so, as outlined in my colleague’s article, here.  

For some time, the Fair Work Act 2009 (Cth) has provided certain employees with a right to request home-based work centred on their individual circumstances. This includes parents of young children, carers, people with a disability, older workers, and people experiencing family violence. In addition, modern awards, enterprise agreements, workplace policies, and some State legislation, have also granted broader groups of workers the right to request, and receive improved access to, home-based work.  

However, since changes to working arrangements have become an enforced reality of the pandemic, a significant majority of companies have become accustomed to the fact that hybrid working arrangements are an inherent part of employee attraction and retention strategies. 

Stanford University Economics Professor Nicholas Bloom has carried out extensive research on working from home and argues that the hybrid model is now “totally dominant and has completely wiped everything else out” because the model is ultimately beneficial for both staff and employers.1 

Bloom’s research indicates that companies that allow workers two days a week at home are on average two per cent to five per cent more productive than those insisting on five days’ attendance in the office. He also predicts that post-pandemic, about 25 per cent of all working days will be conducted remotely compared with about five per cent before the pandemic. Despite the fact that about 50 per cent of all workers can never work from home as a result of their industries or duties, in respect of the remainder Bloom notes that: “remote work was a minority, now it’s mainstream.”  

Further, Bloom has also made the clear link between the establishment of functional hybrid working arrangements and mitigating against the loss of staff – part of what has been referred to in much recent commentary as ‘The Great Resignation’ – where the effect of such workplace flexibility is simple: “People are happier and people quit less. They vote with their feet.” 

In one survey Bloom conducted, 60 per cent of people advised that whilst they would go back to the office full time if asked to, 30 per cent said they would go back but actively look for another job, and 10 per cent said they would quit on the spot. Bloom also noted that many major employers in the US, Europe and Britain have already reversed directions that employees had to return to the office because it simply was not realistic – in the knowledge that if they had gone through with the direction, they could well have experienced a mass exodus of staff. 

The benefits of flexible working arrangements for employees can translate to tangible benefits for employers in turn. One such example is when working from home, employees save an average of an hour a day on commutes and generally spend half that time working. As Bloom observed: “If you say you gain two to five per cent in productivity and your employees’ value working from home as much as a seven to eight per cent pay increase, it’s a no-brainer, why wouldn’t you do something employees like and that makes them more productive?” 

With more and more companies adopting flexible working arrangements, and most including those benefits in their job advertisements and promotions, employees are beginning to expect flexibility in their working lives. As a result, employers who are unable or unwilling to provide such flexibility are finding it harder to recruit and retain staff, even if working from home is not (yet) an entitlement at law for all employees.  

A new set of WHS risks and concerns 

It has long been a feature of Australia’s work health and safety (WHS) laws that WHS is the joint responsibility of employers and workers, and this responsibility applies wherever work is carried out, including in the home.  

Of course, most responsibility rests with the employer, but where more work is done in the employee’s own residence, the natural question arises as to whether the current distribution of responsibilities remains appropriate.  

Some of the WHS risks that are a feature of home-based or remote work are similar to those in a centralised workplace, and others are more specific to a home environment. In this regard, the Productivity Commission has identified that key risks of working from home include:  

  • musculoskeletal damage (often in someone’s neck or back) arising from inappropriate or non-ergonomic workstation furniture or, sometimes, being more sedentary (sitting down more and for extended periods of time) than when in a centralised workplace; 
  • mental health issues arising from social isolation (due to decreased face-to-face contact with co-workers) and blurred lines between work and leisure (which can be associated with a tendency to work longer hours, experience stress, and suffer burnout); and  
  • common household injuries arising from accidents, such as tripping and falling or burning oneself on a hot surface.2  

In many cases, striking a balance between work-and-home life will require coordination between employers, managers, and employees. Organisations should set clear expectations for managers and employees about when and how business communication should be conducted, and managers and employees will need to cooperate with each other to negotiate arrangements that are mutually beneficial. For their part, employees may need to be proactive in setting and maintaining boundaries between work-and-home life.  

While it is too early to assess the extent to which flexible working arrangements will increase the risk of some injuries, such as psychological injury through burnout, an inherent part of an employer’s risk management strategy should be to not only identify that there may be increased risks of such injuries arising but to ensure that there are active steps taken to monitor changes in circumstances over time which may increase the risk profile in this regard. More than ever, this aspect of WHS management cannot be treated as a simple “set and forget” exercise that is only considered at the time of implementing any flexible work arrangement. Employees’ home circumstances may change at any time, from moving house to rearranging furniture, and employers do not have the same visibility over such changes as they would in a centralised workplace. 

Over the last two years, the team at FCB has been inundated with requests for working from home policies, checklists and other procedures, as well as requests for more detailed advice around what an employer’s obligations are in managing employees who are working from home. Even though a number of organisations already had employees operating under working from home arrangements, in a significant number of instances the request for a policy implementation was not necessarily coordinated in the context of a broader WHS framework to carefully manage risks arising when people were working at home for significant proportions of time.   

Typical safety standards and codes of behaviour that are often set out in detail at a worksite or a large office can become afterthoughts in a work from home environment where there may be a tendency to think that employees are at home and “out of sight – out of mind”, at least to the extent of WHS management.   

What is required from a risk management system is for businesses to have a system in place for managing psychosocial hazards at work in the same way an employer manages more traditional safety hazards that arise in a physical sense. That is, employers must ensure to consider in the context of flexible work: 

  • Identify hazards – find out what could cause harm; 
  • Assess risks – understand the nature of the harm that could be caused by the hazard, how serious the harm could be and the likelihood of it happening;  
  • Control risks – implement the most effective control measure that is reasonably practicable in the circumstances and ensure it remains effective over time; and  
  • Review hazards and control measures to ensure they are effective and fit for purpose. 

The model WHS law’s definition of ‘health’ includes ‘psychological health’, and the need for employers to address stress and burnout risks is well established in case law. Despite this, as noted by the Productivity Commission, the increasing prevalence of working from home has led to calls from many commentators for a ‘right to disconnect’, where the lack of a protected right to disconnect from work-related communications poses a potentially significant risk to health and safety. 

A right to disconnect could ultimately be included in modern awards or even the National Employment Standards, but some large employers have already implemented measures via policy to stop out-of-hours work or holiday emails and calls. One such employer includes Victoria Police, which has established a ‘right to disconnect’ clause in an enterprise agreement approved in 2020, where employees are expressly relieved from a duty to respond to emails or telephone calls outside their effective working hours. 

Introducing the ‘right to disconnect’ in future employment conditions may be achievable through legislative reform, but there are no policy positions that have been advocated in terms of any structured proposal. However, many commentators have noted that the review of the model WHS laws in 2023 potentially provides an opportunity for Governments to ensure current WHS legislation is keeping pace with developments and trends in changing work practices.  

The future of flexibility 

The pre-pandemic tendency of uncertainty among companies and workers about whether large-scale working from home was feasible and economically beneficial generally meant that employers were reluctant to take risks and make upfront investments to enable remote working (such as in new technology and training). However, with the pandemic requiring a large portion of Australians to work from home regardless of the economic costs and many pre-conceived notions about concerns with productivity, attention to detail, and response rates, the new normal recognises the growing expectations of workers to be able to access flexibility arrangements. There are gains to be had for both employers and employees alike, but such flexibility does not absolve companies of their obligations towards WHS: it just shifts the goalposts on identifying, monitoring, and addressing hazards in our new world 

If you have a question about Workplace Health & Safety or hybrid or remote working models, get in touch with Rod Marshall.