Chapter 2Views on the bill
2.1As noted in Chapter 1, the Fair Work Amendment Bill 2024 (bill) would amend the Fair Work Act 2009 (FW Act) to ensure that a person who contravenes a Fair Work Commission (FWC) order relating to an employee's right to disconnect would not be exposed to a criminal penalty.
2.2The need for the amendment arose as a result of the unintended interaction between the right to disconnect provisions of the Fair Work Legislation Amendment (Closing Loopholes No. 2) Act 2024 and section 675 of the FW Act.
2.3The Government sought leave in the Senate on 8 February 2024 to move an amendment to resolve this matter—thereby eliminating the need for a separate amending bill—however leave was not granted.
General views on the bill
2.4There was overwhelming support for the amendment from inquiry participants, including the Australian Council of Trade Unions (ACTU), the Australian Chamber of Commerce and Industry (ACCI), the Business Council of Australia (BCA), the National Electrical Communications Association, as well as employment law and workplace relations experts, ProfessorAndrew Stewart and Associate Professor Chris F. Wright.
2.5As noted by the Department of Employment and Workplace Relations (department), the bill 'reflects the Government's clear intention that there should be no criminal penalty associated with contravention of a [FWC] order about the right to disconnect' and will 'ensure that the right to disconnect provisions operate as intended'.
2.6This was acknowledged by the BCA, which raised concerns about what it considered a rushed process but accepted that it 'was never the intent that breaches of right to disconnect orders made by the [FWC] … be subject to criminal penalties'.
2.7The ACTU was more direct in its assessment and pointed out that:
… this error could have easily been corrected by the Senate during the passage of the Closing Loopholes No. 2 Bill. The need for this separate bill is an unfortunate waste of time and resources for all concerned.
Views on proposed amendments to the bill
2.8During the inquiry, participants were invited to provide their views on the Opposition's proposed amendments to the bill. These amendments seek to repeal the right to disconnect provisions in their entirety or, failing that, would:
strip the right to disconnect from employees of businesses with fewer than 20 employees; and
repeal the civil penalties provision in relation to the right to disconnect.
Repealing the right to disconnect provisions
2.9The Liberals' and Nationals' proposal to strip the right to disconnect from millions of working Australians was supported by both the ACCI and the Chamber of Commerce and Industry of Western Australia (CCIWA). For example, the CCIWA argued that the provisions were 'redundant and unnecessary' given existing workplace protections around unreasonable work hours. It also pointed to the potential for ambiguity and conflict in relationships between employers and employees.
2.10Likewise, the ACCI described the right to disconnect as 'highly impractical and fundamentally incompatible with modern, flexible workplaces' and argued that the new laws would:
… severely limit the capacity of employers to get in contact [with] their employees outside of their regular working hours due to the ability of employees to simply refuse to even monitor contact.
2.11However, Professor Stewart stressed that the right to disconnect provisions did not prevent contact with employees outside work hours. Rather, they 'simply give employees a basis for refusing to access, read or respond to any such contact, where it is reasonable to do so, and provide mechanisms for resolving any disputes over that issue'.
2.12This view was reinforced by the department, which stated that:
The right doesnot prohibit employers from contacting their employees, nor does it prevent employees from contacting one another, including across time zones. Rather, the employee right to disconnect allows [an] employee to refuse to monitor, read or respond to contact, or attempted contact outside of working hours, when an employee is not expected to be working and is not paid to be working, so long as doing so is not unreasonable.
2.13Professor Stewart also rejected concerns about ambiguity and suggested that including the right to disconnect in modern awards would allow for more detailed and sector-specific guidance about 'when it might be reasonable to refuse or not respond to contact, or the compensation that might be offered for an employee to be available outside of working hours'.
2.14More broadly, the importance of the right to disconnect provisions was highlighted by Associate Professor Wright, who stressed the need for employment law to adapt to changes in employer practices and the nature of work—including 'availability creep', which refers to the increasing expectation that employees will complete work outside their normal work hours.
2.15The issue of availability creep was also raised by the ACTU, which referred to a survey by the Australian Services Union that found:
70 per cent of workers often take work related calls or check email outside of work hours;
one in three workers are expected to perform work outside of scheduled working hours;
57 per cent of workers find it difficult to say no to performing work outside of normal working hours; and
nearly one in four workers feel they will be disciplined—or their career negatively affected—if they do not answer calls or monitor emails outside work.
2.16Similarly, a Centre for Future Work study found the average Australian worker performs an estimated 280 hours of unpaid overtime each year. Across the labour market, this equates to more than $130 billion per year.
2.17Both the ACTU and Associate Professor Wright reflected on the negative impacts of availability creep on employee health, wellbeing and productivity. Conversely, measures that improve work/life boundaries were reported to have positive impacts in terms of higher job satisfaction, better work life balance, fewer reported health issues and lower rates of burnout, stress, sick leave and staff turnover.
2.18The ACTU and Associate Professor Wright also highlighted the benefits accruing to employers from measures that reinforce work/life boundaries, including positive impacts on productivity and revenue. According to Associate Professor Wright, the research 'clearly shows' that such measures are 'analogous to "beneficial constraints"' for businesses:
In other words, while such measures constrain business preferences away from 'rational choices' that serve their short-term interests, which may explain employer groups' resistance to their implementation, ultimately they lead to better long-term outcomes—including for businesses themselves. While a right to disconnect may involve an adjustment period for businesses during the implementation phase, the research evidence indicates that such a right will likely lead to higher employee satisfaction and commitment and lower turnover, thereby improving productivity and reducing the intensity of staff shortages.
Exempting small business from the right to disconnect provisions
2.19The proposal to exempt businesses with fewer than 20 employees from right to disconnect provisions was supported by the BCA and the ACCI. For example, the BCA, which solely represents large businesses, suggested that excluding small businesses from the provisions would 'help reduce the ever-increasing regulatory burden on small business employers' without affecting their ability to establish reasonable limits for contacting staff outside work hours.
2.20In a similar vein, the CCIWA argued that small businesses currently faced challenges navigating the 'already complex regulatory environment' and that imposing additional complexity ' takes businesses away from what they do best, thereby stifling innovation and growth across the economy'.
2.21However, the proposal to exempt small businesses was not supported by the ACTU, which argued that the right to disconnect 'should be universal and not selectively applied'. The ACTU also rejected arguments about the potential for the provisions to stifle growth. Instead, it argued that:
Preventing employers from requiring their staff to do unpaid work out of hours will not limit productivity, but it should limit wage theft. Labour productivity is a measure of the value or output produced from each hour of work. It has nothing to do with paying people less—or nothing at all.
The right to disconnect could actually improve productivity: it could encourage disorganised bosses to be better organised—rather than relying on staff to respond to poorly timed contact, and it would help workers get the rest they need to be more productive when actually working.
2.22Further, the ACTU noted that small businesses have 18 months to become familiar with the right to disconnect provisions before they are implemented—12 months longer than other businesses. The extended timeframe was also underscored by the department, which observed that the FWC will prepare guidelines about the provisions in order to help 'employees and employers of all sizes to understand their rights and obligations'.
Repealing civil penalties for the right to disconnect provisions
2.23The proposal to repeal civil penalties for the right to disconnect provisions was supported by the ACCI, which opposed any form of penalty for employers in relation to the provisions.
2.24By contrast, the proposed amendment was not supported by the ACTU, which argued that the removal of civil penalties would essentially 'leave an employee with no effective way of getting an employer to comply with an order, greatly weakening the right to disconnect'.
2.25In addition, the department's submission highlighted the 'clear pathway' for dispute resolution related to the right to disconnect provisions. This includes a number of steps before civil penalties would be imposed, including discussions at the workplace level prior to any application for the FWC to make a stop order, or to deal with the dispute via mediation, conciliation, making a recommendation or expressing an opinion. Parties are also able to consent to arbitration.
Committee view
2.26The Fair Work Legislation Amendment (Closing Loopholes No. 2) Act 2024 (CL No. 2 Act) made long overdue changes to workplace relations legislation to improve workers' access to fair pay and conditions. This included the right for workers to disconnect from their workplaces outside their working hours.
2.27In relation to the current Fair Work Amendment Bill 2024 (bill), the committee greatly appreciates the contribution of the individuals and organisations who took the time to submit to this inquiry. The committee also notes participants' support for the amendment in the bill, which resolves a drafting error in the CL No. 2 Act.
2.28However, the committee is disappointed that the Liberals and Nationals denied the Senate the opportunity to amend the original legislation before it was passed—a simple amendment that would have removed the need for the current bill, which has involved significant time and resources. As the Minister for Employment and Workplace Relations pointed out in his second reading speech, it is hard to understand why—despite not wanting criminal penalties to apply—the Coalition refused to grant leave for this issue to be corrected prior to passage of the CL No. 2 Act.
2.29The Liberals' and Nationals' own paymasters at the Business Council of Australia say the provisions 'achieve the aim' of the original legislation, and the Chamber of Commerce and Industry WA goes so far as to call them 'critical', making it more perplexing that the Liberals and Nationals have wasted the Senate's time and resources by forcing the need for this separate bill.
2.30The committee recognises that so-called 'availability creep'—which has been accelerated by mobile technology and the rise of work-from-home arrangements during the COVID-19 pandemic—is a significant driver of stress and anxiety for employees, as well as lower motivation, reduced job satisfaction and higher staff turnover. This has flow-on negative impacts for small, medium and large businesses alike. While not isolated to one sector of the economy, the committee notes the impact of availability creep is a particular issue in sectors such as teaching and policing. It also has a disproportionate impact on people in insecure forms of employment and those with unpaid caring responsibilities outside work.
2.31Moreover, the committee recognises that among Australian workers, support for the right to disconnect is overwhelming, with a Centre for Future Work study finding that six in seven workers—or 84 per cent—supported legislating the right to disconnect, with only eight per cent opposed to the idea.
2.32Right to disconnect provisions are also strongly supported by workplace relations experts. Professor Andrew Stewart described the measures as a 'timely reform' that would help moderate the increasing demands on workers to be available outside normal working hours 'without imposing unduly or unfairly upon employers'. Similarly, Associate Professor Chris F. Wright commended the Australian Parliament for enshrining the right to disconnect in law 'now that technology has eroded the once-firm boundaries between work and home'.
2.33In addition, right to disconnect laws are not a new or novel idea. The committee heard that such regulations already exist in a range of countries in Europe, Asia and the Americas. There are also more than 50 Australian enterprise agreements that contain similar rights. Given the growing issue of availability creep, and its associated impacts on workers' health and wellbeing, it is appropriate that these rights have now been extended to all Australian employees.
2.34The operation of right to disconnect laws, both in Australia and overseas, shows that such protections are reasonable, workable and provide benefits for both employers and employees. Overall, the committee agrees with the view of the Australian Council of Trade Unions that 'opponents of the right to disconnect should have more faith in employers, employees and their unions to reach a sensible position on what the right might look like for particular workplaces or sectors—underpinned by a sensible legislative framework designed precisely to support such negotiated outcomes'.
2.35The committee rejects the Coalition's proposed amendments to the bill, which would see the right to disconnect provisions repealed in their entirety, or altered so they would not apply to millions of employees of small businesses and would not be subject to any form of enforcement. While the amendments have the support of big business groups, the committee contends they would simply serve to further entrench availability creep as a feature of the Australian labour market and protect the interests of those businesses currently profiting from the $130billion in unpaid overtime that Australians work each year.
2.36The committee also rejects concerns about the impact of the right to disconnect protections on business innovation and growth. This is simply not the case—unless that growth is reliant on the theft of workers' wages associated with availability creep. In fact, rather than negatively affecting business, research has shown that strengthening the boundaries between home and work can have a positive impact on productivity and revenue.
2.37The only basis for opposing the rights of teachers, police officers and millions of other workers to disconnect from work outside of their working hours, is a fundamental belief that Australians should be required to work longer and longer hours, for less and less pay. That clearly is the position of the Liberals, Nationals, and their paymasters at the Business Council of Australia.
2.38In light of the evidence received, and the broader research supporting it, the committee recommends that the Senate pass the bill.
2.39The committee recommends that the Senate pass the bill.
Senator Tony Sheldon
Chair
Senator for New South Wales