The Fair Work Legislation Amendment (Closing Loopholes No. 2) Act 2024 amends the Fair Work Act 2009 (Cth) (FW Act) to include a new employee right to disconnect from work and comes into operation on 26 August 2024 (for small business employers – 14 or fewer employees – it is 26 August 2025).
The rights
The new right will permit an employee to refuse to monitor, read or respond to contact outside of the employee's working hours from:
- their employer; or
- a third party in relation to work (such as a supplier, client or customer),
unless the employee's refusal is unreasonable.
Whether an employee's refusal is reasonable will depend on the facts and circumstances of each case. Factors to be taken into account include, but are not limited to:
- 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.
We consider other factors would usually 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.
The term 'working hours' is undefined and is likely to give rise to early litigation. It must have a different meaning to 'ordinary hours of work' and may go beyond 'ordinary hours of work plus reasonable additional hours', which is terminology commonly used in employment agreements. An employment agreement should specify an employee's 'working hours' as well as their ordinary hours of work.
Modern awards will be varied to include a model clause to address the right to disconnect. Although not yet finalised, it is clear it will include a requirement that any employee required to monitor, read or respond to contact outside of working hours must be paid for their time.
Protections from adverse action
The new right to disconnect will constitute a 'workplace right' for the purposes of Part 3-1 of the FW Act. As a result, it will be unlawful for an employer to take adverse action against an employee for holding, exercising or proposing to exercise a right to disconnect. Where such conduct does occur, an employee may make an application to the Fair Work Commission (FWC) or a federal court for compensation, pecuniary penalties, or injunctive relief.
FWC to gain new powers
The FWC's jurisdiction will be broadened so that it will have the power to hear and determine disputes arising from an employee's exercise of the new right. Applications may be made by either employees or their employers.
Before applying to the FWC, by both parties must make efforts to resolve the dispute at the workplace.
The powers of the FWC for dealing with such disputes will include an ability to make 'stop orders', like in the already existing stop bullying and stop sexual harassment jurisdictions. These stop orders may be applied to employees (i.e. by stopping them from refusing to engage with out of working hours contact), or to employers (i.e. by stopping them from insisting on an employee engaging with the out of working hours contact). The FWC will not be able to make orders for monetary compensation.
We recommend employers establish a right to disconnect policy which includes a procedure for resolving the dispute at the workplace level. If an employee fails to comply with the dispute resolution procedure, the employer would have a reasonable basis on which to argue the FWC should not make any orders.
Preparing for the new right to disconnect
Employers can prepare for the new right to disconnect by ensuring:
- Employment agreements deal with the right to disconnect, separate and in addition to dealing with ordinary hours plus reasonable additional hours
- They implement a new right to disconnect policy which sets out,
amongst other things:
- the expectations of the employer's business or operations
- employees' rights and obligations in relation to the right to disconnect
- in what circumstances it may be unreasonable for an employee to refuse outside of 'working hours' contact; and
- a framework for resolving disputes at the workplace level.
If your business needs assistance preparing for the new laws, including obtaining a detailed 'right to disconnect' policy, please contact our Workplace law team.
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.