In the now infamous email, titled ‘To be super clear’, sent to all Tesla employees last month, Elon Musk wrote: ‘Everyone at Tesla is required to spend a minimum of 40 hours in the office per week. Moreover, the office must be where your actual colleagues are located, not some remote pseudo office. If you don’t show up, we will assume you have resigned.’
Unsurprisingly, the email quickly went viral and was met with both praise and condemnation. Some claimed that Elon Musk had simply articulated the frustration employers were feeling after facing resistance to a return to the workplace from staff who had grown accustomed to working remotely. Others criticised Musk for not embracing ‘the new normal’ and for failing to appreciate that remote working had a number of tangible and intangible benefits, including a perceived improvement in work/life balance for employees.
Divergence in views aside, the debate about Elon Musk’s email demonstrates that there is no clear and settled roadmap for ‘returning to normal’, but rather a spectrum of approaches. The right approach will depend on various factors including the business, industry and size of the employer, the need for in-person client and staff connection (including for the purpose of mentoring junior staff), the preferences of employers and employees about how work is performed, and the availability of suitable technology to successfully support remote work.
There is no doubt that Covid-19 has had a profound effect on employers and employment relationships more broadly, and has fuelled speculation and predictions about both what employees want and what employers will need to consider in organising work in the future. The purpose of this article is to address some of the underlying employment law considerations associated with those predictions, and provide some tips about what employers, irrespective of their industry or size, can do now to meet the challenges of operating under a Covid-19 cloud.
Hybrid and remote work arrangements
Much has been written about hybrid workplaces being not only inevitable, but the new normal. The idea being that employees are not required to spend all of their working time at the workplace, but can work remotely, for some or all of their working hours. For those industries where hybrid arrangements are possible (and of course, in some, they are not), they present their own unique set of employment law challenges. Whilst how and where we perform work may be changing, the underlying legal principles (and legislation) which govern employment relationships in Australia remain the same. An obvious concern is how employers ensure that they meet their various obligations, including the duty of care owed to employees, how they monitor and manage work relationships (including incidents of bullying and sexual harassment through electronic means) when their staff work remotely, and how they ensure that their employees meet their various obligations more generally when, at times, there is no direct ‘line of sight’ over what they might be doing.
As a practical example, consider an employer who employs an employee covered by an award or enterprise agreement (being documents which, in Australia, are made by an employment tribunal and set out minimum entitlements for the employees covered by them). Both the employer and employee may see benefits in enabling the employee to perform their work remotely around some of their family commitments, including logging on ‘after hours’ to catch up on work that they might otherwise have performed during the day. While this agreement may suit the parties (and the employee in particular), it could also create unintended liability for the employer, in circumstances where the award or enterprise agreement sets when ordinary hours of work can be worked, and requires that work performed outside that span of hours be paid at overtime rates. Where the employee is not sufficiently compensated for their actual hours of work (notwithstanding that they may, in some respects, set their own hours), the risk of an underpayment claim is born. Without adequate controls to monitor and manage remote working arrangements, it is easy to see how employment arrangements of this type, which principally benefit the employee, can become problematic for an employer from a compliance perspective.
More broadly, employers need to consider how best to measure productivity, successfully manage underperformance and maintain employee engagement. What may have worked in person in a workplace environment is unlikely to translate neatly into remote work arrangements. Ensuring appropriate policies and procedures, that are both lawful and workable, are implemented in this context is critical.
Flexing the flexibility muscle
The desire for flexibility (broadly defined) appears to be one of the key drivers for hybrid work arrangements, with data collected by Australian statutory agency, the Workplace Gender Equality Agency, suggesting that Covid-19 created widespread support for flexible working among both employers and employees. But of course the desire and need for flexibility in the Australian workforce has existed for some time.
The Fair Work Act 2009 (Cth) (FW Act) now gives employees with more than 12 months’ service with their employer the right to request flexible work arrangements in certain circumstances, including where they have responsibilities for the care of school aged children, are a carer, have a disability, are over the age of 55 or are either experiencing, or supporting someone who is experiencing, domestic violence.
The FW Act details the process for making and considering flexible work arrangement requests noting, importantly, that an employer can only refuse to agree to the arrangement on reasonable business grounds. These grounds include where the arrangement would be too costly; cannot be accommodated due to the existing work arrangements of other employees; is likely to result in significant loss of efficiency or productivity; is likely to have a significant negative impact on customer service; or is otherwise likely to be impracticable in light of the necessary changes to the work arrangements of other employees (including the recruitment of new employees).
In reality, many employers have introduced flexible work policies which build on and expand the entitlement created in the FW Act. Data collected by the Workplace Gender Equality Agency about the uptake of flexible work arrangements due to Covid-19 demonstrates that nearly four in five private sector organisations with 100 or more employees in Australia have a formal flexible work policy in place and that many of the organisations that do not have formal flexible work arrangements may nonetheless enter into informal flexible work arrangements with their employees.
While the data suggests that offers of flexibility in work arrangements can assist with attracting and retaining staff, employers must be careful to ensure that the implementation of any policy or decision-making process around flexibility is applied fairly and consistently to all staff. An inconsistent approach has the potential to create not only discontent among the workforce, but increase the risks of claims of bullying and unlawful discrimination, in circumstances where employees do not consider that like is being treated for like.
Moreover, and in circumstances where an employer is unable (or unwilling) to offer flexibility (for instance, by means of remote work) to staff, the employer will need to engage in dialogue with employees about why it is approaching the issue in that way. This may include explaining the inherent requirements of their roles in question and the needs of the business more broadly. The employer will need to articulate why, for example, a particular role cannot be performed remotely in whole or in part. There may undoubtably be valid business reasons for forming a particular view, but where those reasons exist (and, ideally, they should be based on actual experience as opposed to theory in the absence of any real life experience), they should be clearly communicated to the employee in question and documented.
Wellness – a work health and safety perspective
Last year, in a report entitled Taking Action: A best practice framework for the management of psychological claims in the Australian workers’ compensation sector, Safe Work Australia noted that serious claims involving psychological injury (being those where an employee is absent from work for a week or more), resulted in more lost time and significantly higher cost than other type of workplace injuries. Further, and given emerging studies about the effect of Covid-19 on life and work, there is now evidence that employees are facing record rates of burnout. The upshot of all of this is that workplace stress is bad for staff and bad for business.
The prevalence of ‘wellness’ programmes within the employment setting in response to these issues has steadily increased to what one US study quantified as a US$8bn per annum industry. Initiatives include subsidised gym memberships, yoga and meditation classes, and healthy ready-made meals, all of which are aimed at improving employee health and wellbeing. While these initiatives are to be commended, their overall effectiveness has been questioned and they cannot be a substitute for the comprehensive identification and effective management of psychosocial hazards (being risk factors which lead to workplace-stress).
When it comes to work health and safety, employers have a statutory obligation to provide a safe work environment and safe systems of work. Employers are required to monitor the health of employees and consult with employees on work health and safety matters. As mentioned above, while work arrangements may have changed dramatically in response to Covid-19, these obligations remain the same (although they must be met in changing circumstances), and extend to not only an employee’s physical health but psychological health too.
In that context, any meaningful discussion about wellness at work must consider appropriate work design. Work design includes not only the nature of the work and the way in which it is performed, but relevantly for hybrid work arrangements, where the work is performed. This is critical because remote work and poor environmental conditions are known psychosocial hazards which have the potential to increase the risk of work-related stress. Despite what an employer’s employees may say that they would like to do, failing to understand and investigate the safety of an employee’s remote work environment (including for example, an appropriate ergonomic assessment) has the potential to increase the risk of injury, but also liability for breach of work health and safety obligations.
Five things employers should do now
1. Review employment contracts and workplace policies
Make sure that your employment contracts (including position descriptions) and policies are fit for purpose and accurately capture and support the needs of your business in the evolving employment law environment. While we may be experiencing rapid change in the way we work (including when and where work might be performed), the need for appropriate assessments, controls, management, training, information and documentation is as important now as ever. If an employment issue arises within your organisation tomorrow, these will be among the first things your organisation will need to draw on to address and manage the issue(s) in question.
2. Address uncertainty by telling your employees what they need to know
In uncertain times, communication and consultation is key. Employees both want and need to understand how their employers intend to operate post Covid-19 and the impact (if any) on their role. A recent study conducted by McKinsey found that employees felt marked anxiety around the uncertainty of their work arrangements post Covid-19. If your organisation intends to implement a hybrid work arrangement temporarily or permanently, have you communicated this to your staff? Are staff aware of your organisation’s expectations about working in the workplace? From a legal compliance perspective, employers covered by an award or enterprise agreement are obliged to consult with staff about major workplace changes. Similar duties arise under work health and safety legislation for all employees regarding safety issues. Consultation is, in any event, good practice generally.
3. Don’t just think about ‘wellness’, consider work design
It’s one thing to talk about ‘wellness’ at large and another to get granular about ways in which you can address and manage psychosocial hazards in your workplace. This requires employers to identify, assess and control psychological risks. While in-house (or virtual) yoga is a great initiative on its own, it’s unlikely to address the stress an employee may experience in a highly demanding job, with low role clarity, that they might be required to perform sitting at home at their kitchen counter. Considering work design, and addressing its inherent risks is critical to supporting the mental health and wellbeing of employees.
4. Engage with staff about what you are doing well and what you can do better
At a time when staff shortages are at an all-time high, and the ‘war on talent’ intensifies, attracting and retaining good staff is front of mind for many organisations. Engaging with employees to understand what they want and value, what they perceive their employer does well and what their employer can do better is invaluable information that can lead to meaningful and positive change. Among other initiatives, this type of information can be gleaned from well-structured and anonymous engagement surveys which employees can complete online. However, simply relying on online engagement is likely to be an error which, of itself, may result in some of the problems discussed above emerging at an organisation.
5. Review, review, review
Practice may make perfect, but review makes it all worth it. There is little utility in implementing a particular strategic focus when it comes to management of employment issues only to have circumstances change without re-evaluating and changing course (if required). Work health and safety legislation, in fact, requires it. The need for agility is fundamental in our Covid-present world. In this context, review and continuous improvement in the areas we have identified above is, and will continue to be, key.