What the new "right to disconnect" means for employers, and how they can prepare

Amanda Lyras, Alexandra Armstrong-Millar, Tessa Murray and Anna Sumsky
27 Mar 2024
6 minutes
There are a number of steps employers should take ahead of the new right to disconnect taking effect on 26 August 2024.

The "right to disconnect" was recently introduced as part of the second tranche of the "Closing Loopholes" reforms and has attracted a considerable amount of public attention and commentary since its introduction. In this article, we take a look at how the new right may operate in practice.

What is the right to disconnect?

The right to disconnect permits an employee to switch off and refuse to respond to contact or attempted contact from their employer (or a third party like a client, where the contact or attempted contact relates to work) outside their working hours, unless the refusal is "unreasonable". It was pared back from an original proposal which would have seen employers banned from making contact with employees outside their usual working hours. Employees can exercise this right from 26 August 2024 (small business employers are exempt from the operation of the provisions for 12 months following their commencement, that is until 26 August 2025).

A key issue will be what is considered "reasonable" and "unreasonable" contact. It is likely that the views of employees and employers will differ on this question, but the legislation provides some guidance by setting out the following relevant factors:

  • the reason for the contact;
  • how the contact was made, or attempted to be made and the level of disruption caused to the employee;
  • the extent to which the employee is compensated to remain available after hours;
  • the nature of the employee's role and responsibility; and
  • the employee's personal circumstances, including family and caring responsibilities.

Where employees do exercise the right and the dispute is not resolved at the workplace level, the Fair Work Commission (FWC) will have the power to issue orders that any unreasonable contact stop, that any disciplinary action resulting from an employee's reasonable refusal stop, or that employees stop unreasonably refusing to respond to after-hours contact. The FWC is not empowered to issue orders for financial compensation.

It is not yet clear how willing employees will be to leverage this new right, or how it will be interpreted by the FWC, but some guidance may be taken from the existing right employees have to refuse to work unreasonable additional hours, including recent judicial commentary discussed in more detail below.

In our view, it is more likely that employees will seek to leverage the fact this new right amounts to a protected attribute under the general protections regime in the Fair Work Act 2009 (Cth) (FWA). In other words, employees may seek to claim that any adverse action taken against them (such as dismissal) was for reasons that included them seeking to exercise the right to switch off. Employers will need to traverse this area carefully, particularly where employees have been performance managed around their engagement with work and the delivery of job requirements.

We cover below some of the key considerations for employers ahead of the new right taking effect.

Determining whether contact is reasonable

When first introduced by the Greens Party, the right to disconnect was intended to address "availability-creep" and attracted debate over the consequences it would have on post-pandemic ways of flexible working. Since its inclusion in the Fair Work Amendment (Closing Loopholes No. 2) Act 2024 (Cth), the conversation has largely centered on the impact the new right will have on different types of workers. This is an area of uncertainty and what will be considered reasonable or unreasonable will vary across industries, roles and circumstances.

The impact of this right may be limited for workers in certain industries – such as professional services and other client-facing industries – where working after hours is often part and parcel of the job and employees are compensated accordingly. The right is also likely to be less disruptive in industries that rely on workers to be on call, such as shiftworkers.

It is also foreseeable that where working after hours is an entrenched part of workplace culture, employees may be reluctant to refuse or ignore contact in fear of facing judgment or losing out on opportunities for salary increases and promotions. Employees who enjoy the benefits of increased flexibility as to when working hours are performed may also be less likely to seek recourse to the right, given it may impact on any latitudes afforded to them by the employer.

An important consideration is how the right to disconnect may be exercised by employees in global organisations who are required to engage in after-hours calls to facilitate different time zones. Whether this is reasonable or not will depend on factors including the nature of the employee's role, the extent to which they are required to participate in such calls, and how they are compensated. Employers should be clear about the expectations for their employees in these circumstances and educate managers on carefully considering operational requirements and individual circumstances.

Another key consideration is how to manage broader stakeholder relationships in light of this new right. For example, employers in client-facing businesses may experience a level of tension between supporting employees in managing work/life balance and meeting the needs of third parties such as clients. If employees begin ignoring client contact after hours, this has the obvious potential to detrimentally impact client relationships. The reason for the contact, the nature of the employee's role and the extent to which the employee is compensated to remain available after hours will all be relevant considerations. It is an opportune moment for employers to facilitate open discussions with their workforce about managing client expectations.

Resolving disputes over what is reasonable contact

Where there is dispute between an employee and employer as to the reasonableness of contact, parties are required to attempt to resolve the issue first at the workplace level, prior to seeking assistance from the FWC for a stop order.

To assist in the resolution of disputes at the workplace level, employers should ensure they implement a framework to consider and respond to concerns raised by employees regarding contact outside of working hours. This framework should include relevant parameters around what contact is considered reasonable for varying roles across the business, and how the employer will engage with the employee in a way which best supports productivity and morale.

We expect the process at the FWC level will operate in a similar way to the stop-bullying jurisdiction of the FWC. When responding to an application, the FWC may make any stop order it considers appropriate in the circumstances, including to:

  • prevent the employee from unreasonably refusing to monitor, read or respond to contact or attempted contact;
  • prevent the employer from taking certain action, such as disciplinary action, against the employee for reasonably refusing contact; or
  • prevent the employer from continuing to require the employee to read, monitor or respond to contact or attempted contact.

We do not expect the FWC will necessarily see an influx of applications, noting that attempts must be made to resolve any disputes at a workplace level first. The utilisation of this jurisdiction will largely depend on the willingness of employees to approach the FWC and seek to have their availability with the workplace varied. In some industries, this would require a seismic shift in the way work and client service are approached. Indeed, despite initial expectations of an influx of bullying cases when the anti-bullying regime was introduced in 2009, it has not proved to be a popular jurisdiction, with only 730 workplace bullying (and sexual harassment) applications lodged as a proportion of 31,523 total applications lodged with the Commission based on its annual report for the financial year ending 30 June 2023.

We expect the right to disconnect will most likely be leveraged to underpin adverse action claims by employees – essentially by advancing a claim that a dismissal or disciplinary action was taken because the employee tried to limit after hours contact by their employer (or a third party). Employers will need to carefully consider the reasons for a decision to terminate employment or take other disciplinary action, ensure any action is unrelated to any attempt of an employee to reasonably disconnect, and that the legitimate reasons for disciplinary action are clearly communicated to the employee. This will be particularly important in the context of performance management, where an employee may dispute performance requirements which they perceive to involve unreasonable contact.

Unreasonable additional hours

The FWA already contains a right for employees to refuse to work unreasonable additional hours, though this right has not historically been widely utilised. Section 62 of the FWA prevents an employer from requesting or requiring an employee to work more than 38 hours per week unless the additional hours are "reasonable". Employees may refuse to work additional hours if they are unreasonable.

What is considered "unreasonable" in this context depends on a number of factors, taking into account aspects such as any risk posed to the health and safety of the employee, the employee's personal circumstances and any family responsibilities, the needs of the workplace, entitlements to overtime and/or penalty rates, remuneration, usual work patterns and the nature of the employee's role and level of responsibility. The relevance of each of the factors, and the weight to be attributed varies in accordance with the circumstances of each case.

The provision has rarely been utilised in a professional context, though a recent decision of the Federal Court involving a Managing Director has provided some guidance, determining that an employee must prove (and plead with precision) exactly when the employer requested or required them to work more than 38 hours per week (Dorsch v HEAD Oceania Pty Ltd [2024] FCA 162). It is not sufficient to simply claim the employer consistently required work beyond 38 hours without evidence of what the work requirements were, who imposed them and in what circumstances they were imposed.

We expect that, in considering the reasonableness of after-hours contact, the FWC may similarly have regard to evidence of work requirements and the broader circumstances in which those requirements were imposed.

What employers should be doing before the right to disconnect take effect

There are a number of steps employers should take ahead of this new right taking effect on 26 August 2024:

  • engage with their workforce and have open conversations about working hours and expectations in the context of their particular business and stakeholders;
  • update their contracts of employment and internal policies to support any requirement for employees to be reasonably available outside of working hours and clarify whether remuneration paid takes this requirement into account;
  • clearly set performance expectations for reasonable contact outside of working hours, including in job descriptions and performance discussions; and
  • ensure there are robust processes in place to eliminate risks to health and safety arising from after hours contact.

Training managers on what types of contact outside of working hours are reasonable and unreasonable, and how to manage business and third party demands in a manner which is safe and compliant, will also be important in aligning to the new right and minimising psychosocial risks in the workplace.

You should also consider managing the expectations of third parties such as clients, including under any contractual documentation that deals with service delivery.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.