The Fair Work Commission (FWC) is considering whether modern awards should cover working from home arrangements, a move that could drastically change employment conditions for small businesses and has already captured the attention of workplace relations lawyers.
As reported by The Age, the FWC in January released a discussion paper asking if there are “any specific variations needed” to the modern awards system in relation to working from home, so that modern awards can continue meeting their objectives.
More than 120 modern awards are currently in effect, covering most employees in the Australian workforce.
Reliance on modern awards to set pay and conditions is especially common among small businesses, which may not have the size, time, or HR sophistication to negotiate enterprise bargaining agreements with their staff.
Work from home provisions do not currently feature in the modern awards system.
But the FWC is empowered to tweak the minimum standards set out in modern awards — and the consultation paper makes clear that working from home, which ballooned in popularity through the COVID-19 pandemic, continues to play a significant role in many workplaces.
“Are there any specific variations needed in modern awards regarding working from home arrangements that are necessary to ensure they continue to meet the modern awards objective?” it asks.
Athena Koelmeyer, principal and director of Workplace Law, says the FWC is unlikely to establish a blanket right to work from home in the modern award system, but may consider inserting an allowance into relevant awards.
“There’s already plenty of other ways to facilitate a request for somebody to work from home, or a requirement to come into the office,” Koelmeyer told SmartCompany.
Indeed, the ability for employees to request flexible working arrangements was strengthened in June last year.
Relevant workers whose request to work remotely was denied by their employer can now bring their dispute to the FWC for resolution.
“Obviously, that’s a big part of the discussion that’s happening at the moment,” Koelmeyer continued.
“But I think what the Fair Work Commission will probably land on is developing some kind of allowance for employees who do work from home, a bit like a motor vehicle allowance that compensates employees when they use their own vehicle for the purposes of carrying out their work.
“That would be the simplest thing for the Fair Work Commission to do.”
Such an allowance would need to be carefully drafted, she continued.
“They’re just going to need to keep it really tight so it doesn’t impose this unnecessary burden: ‘I don’t want to have to pay my retail employees who are at work in the shop a working from home allowance when they’re not working from home,’” she said.
“It should be triggered only by the requirement, by me, as the employer to have somebody working from home rather than in an office.”
Double-dipping — for example, if an employer who was already granted the right to work from home was then eligible for an allowance as a result of the changing award system — would be “very substantially unfair to the business community,” Koelmeyer said.
Other legal experts have a different view.
“A right to work from home would not be appropriate for all modern awards, given the inherent nature of some jobs that require physical attendance at a work site,” said Trent Hancock, principal at Jewell Hancock Employment Lawyers.
However, applying a right to work from home in the modern award system “would be a step in the right direction and help complement the existing right to request flexible working arrangements available to some employees” under the Fair Work Act, he said.
In its own discussion about the work from home considerations in the modern awards system, the FWC considered claims that remote work lessens workplace collaboration and can lead to employees conducting more work out-of-hours.
But these concerns “can be easily overcome through the effective use of remote working technologies such as video conferencing and the new right to disconnect,” Hancock said.
Any potential change to the modern award system could impose new requirements on small businesses, like funding new equipment for home offices and ensuring they are safe workplaces.
Even so, Hancock said the potential upside for small businesses adopting remote work practices could be significant.
“Small businesses should be looking to embrace the prospect of more staff working from home,” he said.
“It increases morale, reduces overheads, creates opportunities for flexibility and growth, and, in most cases, does not reduce productivity.
“The implications for small businesses can therefore be incredibly positive, and those that embrace and promote a right to work from home will likely attract more talented employees and thrive as a result.”
Businesses operating from a central location, such as a restaurant or brick-and-mortar retail store, are unlikely to share the same opinion.
With the FWC still considering its options, Koelmeyer said contributing to the consultation paper will allow small businesses to have their voices heard.
“The Fair Work Commission is ultimately, usually, a fairly practical jurisdiction,” she said.
“So it’s got good sense and experience in talking to employers and employees about practical things that affect the way that work is done in the particular workplace.”
Submissions to the FWC consultation are open until midday Monday, 12 March 2024.
Senior Business Journalist
Focused on the small business sector, David’s work covers the political, regulatory, and economic issues facing Australian entrepreneurs. Prior to joining SmartCompany, he was a reporter for Business Insider Australia. You can follow him on LinkedIn.
