Purpose of the Bill

The purpose of the Fair Work Amendment Bill 2024 is to amend the Fair Work Act 2009 (FW Act) to ensure the treatment of orders made by the Fair Work Commission (FWC) under the new ‘right to disconnect’ is consistent with the existing treatment of FWC orders under the ‘stop bullying’ and ‘stop sexual harassment’ jurisdictions, namely, that a person contravening such orders is not exposed to criminal penalties, only civil penalties.

Provisions providing the ’right to disconnect’ were inserted by the Senate into the Fair Work Legislation Amendment (Closing Loopholes No. 2) Bill 2023, having been moved by Senator Barbara Pocock on behalf of the Australian Greens. The Senate amendments were agreed to by the House of Representatives on 12 February 2024 and the Bill passed the Parliament on that day. It has not yet commenced.

The amendments introducing the right to disconnect had an apparently unforeseen interaction with section 675 of the FW Act, which provides that contravening an order of the FWC is an offence, unless an exception applies.

Following the approval of the amendments in the Senate, the Government sought leave to move a further amendment to exclude FWC orders made under the ‘right to disconnect’ jurisdiction from section 675, which would have ensured that breach of such an order was not a criminal offence. Leave was refused. 

Background

To give context to the amendment made by the Bill, the issue of unpaid overtime and increasing prevalence of employees working additional hours outside of traditional working hours is outlined, as is the origin of the right to ‘disconnect’ and how the relevant provisions in the FW Act currently operate.

Unpaid overtime and changing work patterns

Generally speaking, Australians – especially those in full-time employment – work longer hours than workers in many other countries, with OECD data suggesting 13% of employees work very long hours in paid work, above the OECD average of 10%, and work some of the highest total annual hours in the OECD. This has been a long-standing feature of the Australian labour market.[1]

Various studies in Australia point to Australian employees working significant amounts of unpaid additional hours, with figures ranging from between four hours and twenty minutes to 4.6 hours prior to the COVID-19 pandemic, and between five hours and 25 minutes (p. 736) and 6.9 hours (p. 14) during the COVID-19 pandemic. The Centre for Future Work found in 2022 that 71% of employees worked outside their scheduled hours at some point in their working lives (p. 10), largely to meet employer expectations. More recently, the Centre for Future Work found that in 2023 (p. 14):

• employees worked an average of 5.4 hours of unpaid work per week, or approximately 7 weeks of unpaid work per year and
• across all forms of employment, unpaid overtime represents 16.9% of total working hours for paid workers, implying ‘total unpaid overtime of 3.3 billion hours per year’.

Changes in working patterns – including the increased proportion of employees who regularly work from home – has also impacted on the likelihood of working unpaid additional hours, with data suggesting employees who work from home are ‘more likely to clock up extra hours in paid or unpaid overtime’. Further, evidence suggests that digital technologies such as mobile devices with internet connectivity have not only changed the span of hours during which many employees work, but have also changed where and when work can be performed. As noted by one academic, this means (pp. 735-736):

Work often occurs independently of the traditional workplace; it can be performed at home, in transit, and even on holidays. Workplaces have effectively expanded to wherever employees can take their smartphone, laptop, or smartwatch, creating the possibility of work being performed beyond any preconceived setting or timeframe.

The combination of a long-entrenched Australian culture of employees working unpaid additional hours, changing working patterns and the ubiquitous nature of digital technologies has created an “always on the clock” work culture that extends beyond the traditional workday and span of working hours. This means (p. 736):

The growth of Australian employees being always 'on' and responsive to work-related communications outside working hours has resulted in a blurring of the lines between their work and private lives.

Research indicates that the effect of working additional hours outside traditional working hours and/or always being ‘connected’ to the workplace can have significant impacts on the health, wellbeing and safety of employees.

Origin and content of the right to disconnect

Whilst not explored in detail in this digest, the right to disconnect was first legislated in France in 2016, with other European countries (Spain in 2018, Italy in 2021, Portugal in 2021, and in Belgium for public servants in 2022 and private sector employees in 2023). In addition, right to disconnect legislation has also been introduced in Kenya and the Philippines.

Whilst each right to disconnect regime is different, at a general level:

The right to disconnect refers to a worker’s right to be able to disengage from work and refrain from engaging in work-related electronic communications, such as emails or other messages, during non‑work hours.

As such, the right to disconnect could be said to be a specific, tailored response to the issue of working additional hours outside of traditional workplaces and traditional working hours.

Committee consideration

At the time of writing the Bill had not been referred to any committee for inquiry and report.

Senate Standing Committee for the Scrutiny of Bills

At the time of writing the Bill had not been considered by the Senate Standing Committee for the Scrutiny of Bills.

Policy position of non-government parties/independents

The Opposition has indicated that it intends to repeal and remove the right to disconnect from the FW Act when in government. The Opposition has also raised concerns about potential criminal penalties applying, noting that according to WorkplaceExpress, the Opposition refused leave for a late amendment to the Fair Work Legislation Amendment (Closing Loopholes No. 2) Bill 2023 that would have resolved ‘the criminal exposure issue’. As such, at the time of writing it is not clear if the Opposition will support the Bill.

At the time of writing the position of other non-government Members and Senators on the Bill removing the potential for criminal penalties to apply could not be determined.

Position of major interest groups

Employer groups have generally been critical of the introduction of a right to disconnect. For example, the Australian Chamber of Commerce and Industry (ACCI) stated:

the ‘right to disconnect’ amendment that exposes employers to criminal penalties has made bad legislation even worse … This regressive union-dictated legislation will do nothing to grow productivity or create jobs and has ended up with the spectre of employers facing criminal charges for calling an employee.

The Business Council of Australia was also critical of the introduction of a right to disconnect into the FW Act, and in particular, for the potential for criminal penalties to apply. The Australian Industry Group (AiG) argued:

The so called 'right to disconnect' laws are impractical and will simply add unwarranted conflict and uncertainty into our workplaces. There are already provisions in the Fair Work Act and awards that regulate the extent to which employees can be unreasonably required to work outside normal hours. These changes were unfortunately added into the mix at the last moment, without being properly thought through, with a view to securing the Greens' support for the passage of the rest of the legislation. [emphasis added]

Whilst unions are supportive of right to disconnect, with ACTU Assistant Secretary Liam O’Brien stating that it would protect employees with caring responsibilities, at the time of writing the position of trade unions on the precise measure contained in the Bill – removing criminal penalties for breaches of certain FWC orders relating to the right to disconnect – was not clear. 

Financial implications

According to the Explanatory Memorandum (p. 1), the Bill will have no financial impacts on the Commonwealth.

Statement of Compatibility with Human Rights

As required under Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the Bill’s compatibility with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of that Act. The Government considers that the Bill is compatible.[2]

Parliamentary Joint Committee on Human Rights

At the time of writing the Bill had not been considered by the Parliamentary Joint Committee on Human Rights.

Key issues and provisions

To give context to the proposed amendment to the FW Act and the issues it raises, the pre‑existing protections for employee against working unreasonable additional hours and the recently legislated right to disconnect are explained below.

Pre-existing protections against unreasonable additional hours

The National Employment Standards (NES) contained in the Fair Work Act 2009 (FW Act) protect employees from working unreasonable additional hours. Section 62 of the FW Act provides that:

• an employer must not request or require an employee to work more than their ordinary hours of work in a week (for example, 38 hours for a full-time employee) unless the hours are reasonable and
• an employee may refuse to work additional hours if they are unreasonable.

In turn, subsection 62(3) sets out various factors that must be taken into account when determining if additional hours are reasonable or unreasonable including, among other things: 

• the employee’s personal circumstances (including family responsibilities)
• the needs of the workplace or enterprise
• whether the employee is entitled to receive overtime payments, penalty rates or other compensation for working additional hours
• any notice given by the employer of any request or requirement to work the additional hours
• any notice given by the employee of their intention to refuse to work the additional hours
• the usual patterns of work in the industry (or part of it) in which the employee works
• the nature of the employee’s role, and the employee’s level of responsibility and
• any other relevant matter.

For example, if an employer notified an employee of a requirement to check their emails every Sunday night to ensure that regular early Monday morning meetings with clients ran smoothly, this may be reasonable (depending on other factors).

In contrast, if the employee had advised the employer that they would not be checking emails on Sunday nights (for example, if they were a separated parent with shared care arrangements and it was the only night that their children stayed overnight with them), then it may be unreasonable.

As such, it appears arguable that the NES already creates an enforceable right for employees to refuse work, including ‘disconnecting’ and not reading emails, taking calls outside of regular working hours in many, but not all situations. However, whilst the right to refuse additional working hours exists, this needs to be assessed on a case-by-case basis. Further, a leading employment law academic has noted:

Despite the potential for these provisions to apply to many employees working long hours, they have only occasionally been invoked.[3]

Existing penalties for requiring employees to work unreasonable additional hours

The FW Act provides that an employer must not breach the NES, or terms of modern awards, enterprise agreements or workplace determinations.[4] Where a breach occurs, a civil penalty applies.[5] In addition, the right to refuse unreasonable additional hours is a workplace right within the meaning of the FW Act ‘general protections’ regime.[6]

This means that where an employer takes adverse action against an employee for refusing unreasonable additional hours by, for example, dismissing the employee or altering the position of the employee to the employee’s prejudice, then the employee can commence proceedings against the employer, resulting in a pecuniary penalty being imposed on the employer for the breach and/or relevant court orders (e.g. reinstatement). Premier Pet Pty Ltd trading as Bay Fish v Brown (No 2) [2013] FCA 167 is an example of a successful adverse action claim based on exercising the workplace right to refuse to work overtime as the requested overtime was not reasonable.

The newly legislated Australian right to disconnect

As set out above, the Fair Work Legislation Amendment (Closing Loopholes No. 2) Bill 2023 amended the FW Act to include the ‘right to disconnect’. Whilst the amendments creating the right to disconnect had not, at the time of writing, commenced, in summary, once the changes take effect:

• an employee will be able to refuse to monitor, read or respond to contact, or attempted contact from their employer (or from a third party where the contact or attempted contact relates to their work) outside the employee’s working hours (that is, disconnect) unless the refusal is unreasonable and
• the FWC will be able to deal with disputes between an employer and an employee about the right to disconnect, including by making orders to:
  • stop an employee from refusing contact or
  • stop an employer from taking certain actions.[7]

The right not to monitor, read or respond to contact from an employer or from a third party that relates to work, outside of working hours is a workplace right within the meaning of Part 3-1 of the FW Act.[8] As discussed above, this means that an employer is prohibited from taking adverse action against an employee who exercises this right.

Determining if disconnection is unreasonable

In determining whether an employee's disconnection is unreasonable, the following must be considered:

• the reason for the contact or attempted contact by the employer or third party
• how the contact or attempted contact is made and the level of disruption the contact or attempted contact causes the employee
• the extent to which the employee is compensated:
  • to remain available to perform work during the period in which contact or attempted contact is made or
  • for working additional 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 (including family or caring responsibilities).[9]

However, an employee’s disconnection will be unreasonable if the contact or attempted contact is required under a law of the Commonwealth, a state or a territory.[10]

Disputes about ‘disconnecting’ from work

Where a dispute arises between an employee and their employer about a disconnection, the parties to the dispute must attempt to resolve the dispute at the workplace level by discussions between them.[11] If the dispute is not resolved, the employee or employer can apply to the FWC to deal with the dispute.[12] The FWC can then dismiss the matter (for example, if it was frivolous or vexatious), deal with the issue in another way, or issue an order to require:

• the employee to stop unreasonably refusing to monitor, read or respond to contact or attempted contact
• the employer to refrain from taking disciplinary or other action against the employee or
• the employer to stop requiring the employee to monitor, read or respond to contact or attempted contact.[13]

Should an employee or employer contravene the relevant order, civil penalties apply.[14] Whilst the note to section 333Q – which provides a person must not breach an order made in relation to disputes about the right to disconnect – provides it is a civil remedy provision, the effect of current section 675 is that a person who breaches such an order will also commit a criminal offence. This is because current subsection 675(1) provides that contravening an order of the FWC is an offence, unless an exception applies. The exceptions (set out in subsection 675(2)), currently do not include orders made in relation to disputes about the right to disconnect.

Key issue: is a right to disconnect necessary?

As noted above, arguably a right to disconnect already exists in the FW Act: the existing protections against working unreasonable additional hours found in section 62.

Given that responding to work-related phone calls, reading work-related emails and so forth are all forms of work, there does not appear to be any barriers to the existing protections being used to address the issues discussed in the background section of this digest including blurring lines between work and private life, the negative health impacts of an ‘always on the clock’ work culture or being constantly ‘connected’ to work. Put simply, the FW Act appears to already be equipped with the tools to allow employees to disconnect from their employer, should they choose to.

However, as noted earlier, those existing protections have only occasionally been invoked.[15] As such, given that many employees regularly working substantial additional (unpaid) hours is a long-standing feature of the Australian labour market,[16] it appears arguable that the existing protections are either poorly understood, ineffective, or that employees lack confidence to invoke them and potentially end up in a dispute with their employer.

Key issue: will a right to disconnect undermine workplace flexibility?

It has been argued that the right to disconnect will undermine workplace flexibility. In that regard, a legal academic has noted (p. 737):

it could be argued that a right to disconnect may have the flow-on effect of preventing an employee from working digitally at their preferred times in lieu of following fixed-time arrangements, thereby reducing their autonomy and flexibility.

On the other hand, a right to disconnect need not stifle desired flexibility in their working patterns. Implemented appropriately, it has the potential to maintain employee flexibility, with an employee free to enter and exit work throughout the day, provided their working time is recognised and limited to a predetermined number of hours, to ensure that they have a genuine rest period … At this point, it must be emphasised that for many employees, without a recognised right to disconnect, there exists a 'darker side' creating a 'double-edged sword' when it comes to the purported benefits of flexible working patterns.

Despite its apparent benefits, working flexibly has been shown to contribute to long work hours, seeping into employee private time, otherwise dedicated to leisure, rest, and family. The fallout can be disrupted sleep, overwhelming stress, burnout, challenging relationships, and distracted carers. (emphasis added)

As such, whilst it appears that there are genuine risks that the right to disconnect may, at least in some workplaces, undermine flexibility, this need not be the case for every workplace and every employee. Rather, flexible working arrangements – including working from home and agreed working hours outside of usual business hours – appear able to coexist with a right to disconnect.

For example, if an employee wanted to work from 12pm to 8pm remotely in a workplace that generally works 9am to 5pm, provided the employee was prepared to be contacted between those hours there is no reason why such an arrangement could not operate successfully. However, if the employee wanted to disconnect from 5pm (despite working to 8pm), then the arrangement may not work. Likewise, the arrangement may not work if the employer consistently seeks to call and discuss work matters with the employee prior to 12pm each day.

What the Bill changes

The Bill amends the FW Act to insert into subsection 675(2) a reference to a disconnect order. The effect of this is that no criminal penalties will apply to a person who contravenes a disconnect order made by the FWC. Instead, as with other similar types of orders, only civil penalties will apply.

Key issue: will it work?

Whilst the Bill will ensure that criminal penalties do not apply to a person who contravenes a disconnect order made by the FWC, the broader issue of whether the amended right to disconnect will be effective in curbing unpaid additional hours, the blurring of the lines between work/private life and the negative effects on employee well-being from long and/or fragmented working hours remains to be seen.

First, this is because the existing protections that appear to already be capable of being used to allow employees to disconnect are rarely used and despite being in place since 2009, do not appear to have succeeded in tackling Australia’s long-entrenched culture of employees working substantial unpaid additional hours on a regular basis.

Second, it is not clear to what extent, if any, the proposed civil penalties will change the prevalent Australian workplace culture referred to above by imposing enough of a deterrent on employers to take concrete steps to curb the prevalence of unpaid additional hours being worked by employees.

Third, evidence suggests that enforcing the right to disconnect may pose challenges in terms of monitoring and ensuring compliance, especially in industries where remote work and digital communication are prevalent. This is due, in part, to the fact that similar laws overseas identify a right to disconnect but do not create an obligation to disconnect: this shifts the burden of disconnecting to the worker. As such, the new right to disconnect may not result in the significant cultural shift desired.

Concluding comments

Whilst the Bill will remove the spectre of criminal penalties applying to a person for a breach of an order of the FWC made in relation to disputes about the right to disconnect, it is unclear if the right to disconnect is, strictly speaking, legally necessary or will be an effective, readily enforceable mechanism that can:

• meaningfully contribute to changing the existing Australian workplace culture of employees working substantial additional unpaid hours on a regular basis (including by being ‘connected’ to their employers outside of normal working hours) and
• do so in a manner that does not undermine workplace flexibility.