The Fair Work Legislation Amendment (Closing Loopholes No 2) Act 2024 introduces changes that will affect small businesses regarding an employee's "right to disconnect".
What is the impact of these changes on small business, and how can you comply with an employee's right to disconnect while still ensuring that the operational requirements of your business are met?
This article outlines what you need to know about:
- the right to disconnect for your small business; and
- how to prepare for the changes to ensure compliance.
THE RIGHT TO DISCONNECT
From 26 August 2025 (for small business employers, 2024 for non-small business employers), employees will have a new "right to disconnect" outside of normal working hours. This means that they are not required to monitor, read, or respond to work-related matters outside of their normal working hours, unless refusing to do so is unreasonable in the circumstances.
Whether an employee's refusal is unreasonable depends on several factors including (reasonableness factors):
- the reason for the contact;
- whether the employee is compensated for being available in the period when contact is made or attempted, or for working additional hours outside their ordinary hours of work;
- the nature of the employee's role and level of responsibility; and
- the employee's personal circumstances, including family or caring responsibilities.
HOW TO ENSURE COMPLIANCE
Below are some suggested steps to prepare your business for the upcoming changes:
1. CONSIDER THE IMPACT OF THE RIGHT TO DISCONNECT ON YOUR SMALL BUSINESS
Consider if and how employees having a right to disconnect may impact the operational needs of your business prior to the change coming into effect. If you assess that there will be an impact, consider options for limiting/addressing the impact.
For example, if your business has a manager working a flexible span of work including outside of normal hours, and you have other employees working normal business hours, you may consider directing the manager to hold off sending non-urgent emails to other employees until during their normal working hours. You may also consider giving employees clear instruction that they are not required or expected to respond to non-urgent work communication outside of normal hours.
If there are operational circumstances in which the business would require employees to respond outside of normal hours, consider what those circumstances would be, assess and consider them against the reasonableness factors outlined above and provide clear instruction and explanation to employees – ideally outlined in a Right to Disconnect workplace policy. MDC Legal is currently assisting clients to develop policies and procedures around the right to disconnect. Feel free to get in touch if we can assist your business with this.
The right to disconnect also extends to after-hours contact sent to employees from third parties, including clients and suppliers of your business. Consider whether it will be necessary to communicate expectations/requirements to clients and suppliers regarding any out-of-hours contact with the business' employees.
2. REVIEW YOUR EMPLOYMENT CONTRACTS AND POLICIES
Employment contracts and policies should be reviewed and audited regularly (we recommend at least annually) given the frequency of developments and changes to workplace laws.
The introduction of the right to disconnect presents an opportunity to review and audit your business' employment contracts and workplace policies and to identify gaps or shortfalls to be addressed to ensure your business remains compliant with its obligations under workplace law.
Has your business had advice on whether any of its employees are covered by a modern award? Is the business familiar and compliant with provisions regarding ordinary hours of work in any applicable modern award and when/how additional hours can be worked?
Do the remuneration terms in your business' employment contracts reflect what the arrangements are regarding compensation for additional hours worked (which may include out-of-hours contact) – for example, is your business paying its employees in strict accordance with the provisions in a modern award, or under an "all inclusive" rate (in which case the remuneration clauses in employment contracts must be carefully drafted to reflect this arrangement and to avoid exposure to underpayment claims)?
If it's been a while since your business' employment contract templates have been audited, they are likely at risk of being non-compliant given the many recent changes to employment laws. MDC Legal is currently offering fixed fee contract audits. Please get in touch if you would like to discuss.
3. CONSULT WITH YOUR EMPLOYEES
Regular communication and consultation with employees about changes to workplace laws assists with developing a mutual understanding of expectations, as well as building a relationship of trust.
Keep employees informed of the new changes being introduced, relevant to the unique operations of your small business. Provide opportunities for employees to raise questions or concerns and address those promptly, taking advice and reverting to the employee as required.
4. INTRODUCING CHANGES AND TRAINING MANAGEMENT
Once you have identified any practical measures, policy changes or other steps that your business will introduce to ensure compliance with the right to disconnect, ensure that managers and other leaders within the business are trained on these and understand how to implement them. Often a roundtable training session (rather than an emailed memo or similar) is the best approach to ensure content delivery and to provide the opportunity for discussion and questions. MDC Legal designs and runs in-house training sessions for management and can work within your budget and timeframe to develop a tailored session. Please get in touch if you would like to discuss further.
The right to disconnect needs to be considered in respect of employment-related decisions including disciplinary action, performance, management, warnings or dismissal. Importantly, adverse action must not be taken against an employee because they have exercised their right to disconnect.
FURTHER ADVICE
It is essential for businesses to be across these important changes to workplace laws and to understand how they may impact your workforce and your obligations as an employer.
MDC Legal is a specialist employment law firm providing advice on all aspects of employment law, including understanding and compliance with the Closing Loopholes amendments.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.