Issues In Australia – Fwd: Thinking -How Could The Workplace Of The Future Affect Your Organisation?

4 September, 2016

 

All workplaces are changing. the range of issues are diverse: the ‘uberisation’ that will affect the delivery of services including in recruitment; responding to an ageing workforce; and other social and demographic changes. the range of issues and possibilities are seemingly endless.

 

What is indisputable is that technology will continue to fundamentally transform and in many instances disrupt the way we work. changes in technology will also result in changes to the skill composition of many workplaces.

 

As with all technology, the level of adoption of these changes varies. in this edition of Fwd:Thinking we consider some of the issues associated with the changing nature of the workplace, asking how to best manage the opportunities and risks that arise from the evolution of the modern workplace. 

 

An unhappy marriage? australian industrial relations and changing models of workforce engagement 

 

ndustrial relations in australia is focussed on collective rights and obligations. the regime established by the Fair work Act 2009 (cth) enshrines a key role for representatives of employees, namely unions.

 

A recent report by the csiro: tomorrow’s digitally Enabled workforce has noted increased technological change, the rapid growth of the peer-to-peer and freelance employment market, working from home and co-working facilities – each of which pose challenges for employers and unions alike.

 

Managing engagement with employees will become critical as many different types of work become prevalent: from full-time work at the employer’s premises, to workers engaged part-time or xed term, and those who telecommute, work remotely, or have other exible working arrangements.

 

Managing workplace change consultation obligations under applicable modern awards or other industrial instruments, and the fw act, will continue to apply to major workplace change.

 

Implementing change and meeting consultation obligations with a dispersed workforce, or with employees on exible work arrangements, will require clear and rigorous communication and engagement strategies.

 

Consulting with employees who are not located at, or who do not regularly attend, the employer’s premises, and mitigating the adverse impacts on employees on exible or unique arrangements, will require careful planning and meticulous execution.

 

Dealing with disputes

 

processes for dealing with workplace disputes and grievances often provide for holding discussions at the workplace (with immediate supervisors and managers), escalation to more senior levels, and involvement of employee representatives (often unions). Ensuring these steps are ef ciently followed, when participants may be at different work locations, or in workplaces where there may be no clear organisational hierarchy, will need to be managed.

 

if grievances and disputes remain unresolved for a period, due to inef cient processes that inadequately deal with these differing arrangements, this may have a chilling effect on resolving issues if a grievance becomes entrenched. this may result in a greater role for the fair work commission.

 

Union activity

 

unions typically communicate and organise employees through delegates at the workplace. they may also hold discussions at the workplace via right of entry, and be involved in workplace disputes, grievances and enterprise bargaining. workforces that are dispersed mean these methods are less effective and likely outmoded.

 

Unions are making efforts to meet the challenges of the future of work, for example, through developing online portals and hotlines for obtaining services, and utilising social media to organise members around particular campaigns. as union activity online increases, employers will need to ensure that their policies appropriately deal with conduct on social media, including being prepared to take disciplinary action against people who breach such policies.

 

The High court decision of Board of Bendigo Regional Institute of Technical and Further Education v Barclay [2012] Hca 32, in which a union delegate was disciplined for sending an in ammatory email to employees against his employer’s interest, demonstrates that such action can be taken for electronic misconduct. However, this needs to be carefully managed in order to deal with any claims that may be made against the employer alleging breach of adverse action protections.

 

While unions are taking these steps, and making efforts to expand into new industries and occupations, the density of union membership across the majority of industries continues to decline. former actu assistant secretary, tim lyons, and ex-united Voice assistant secretary, troy Burton, in a report have noted that “focusing on technology as an end and not as a tool [for unions] is likely to lead nowhere: A better app is not the answer”.

 

Other efforts unions are taking to deal with declining union membership have included mergers or alliances with other unions to share resources (such as the proposed merger of the CFMEU and MUA), offering membership bene ts such as discounts for goods and services, incentives for new members and different tiers of membership. unions are also taking steps to amend their eligibility rules to cover new industries, occupations and some speci c employers not traditionally covered by unions.

 

The changing nature of work and the workplace, underpinned by this old economy ir framework, will pose unique challenges for employers and unions. the challenges are not insurmountable – but require careful strategic planning and execution. 

 

Can we keep workplace instruments relevant for the workplace of the future? 

 

 

 

Both the nascent “gig economy” and the anticipated proliferation of independent contracting arrangements raise questions about the future relevance of the traditional employment relationship. is the current framework used to regulate that relationship in australia – such as the national Employment standards, modern awards, enterprise agreements and common law contracts – suf ciently adaptable for workforces of the future? the capacity for businesses to take advantage of the potential productivity dividends offered by digital technologies, by adopting and implementing alternative work arrangements, will be in uenced by the capacity of such instruments to accommodate these types of changes.

 

The rigid status quo presently, a disheartening perception exists that the capacity for employers to negotiate mutually bene cial exible work arrangements with employees is sti ed by the award and enterprise agreement system. this is despite the objective set out in the Fair work Act 2009 (cth) for modern awards to identify “the need to promote exible modern work practices and the ef cient and productive performance of work” and the legislative requirement for enterprise agreements to include a exibility term. to illustrate the limited exibility of awards and enterprise agreements, last year’s review of the workplace relations framework by the productivity commission estimated that just 2% of employees had an individual flexibility arrangement (IFA) in place.

 

There are some drawbacks to the current ifa provisions, such as the uncertainty that arises from the relatively short notice period required for unilateral termination of an IFA and the confusion over how to assess non-monetary bene ts under an ifa as part of the Better off overall test.

 

However, the productivity commission has highlighted a general lack of awareness of ifas amongst employers and employees as a signi cant issue, rather than these restrictions. while it would be positive to see some legislative amendments in this space, employers who are looking to implement – or to encourage – different work arrangements should look to identify and address any knowledge gaps within their organisations concerning the capacity for exibility that is already available under awards and enterprise agreements.

 

Moulding systemic reform

 

Pursuing individual arrangements such as ifas with employees carries with it a signi cant administrative burden for employers. it is important to consider how awards and enterprise agreements can themselves better accommodate the needs of modern workplaces without each technological advance requiring a resort to individual arrangements.

 

To some extent, this issue is outside the direct control of employers and is dependent on legislative reform. the productivity commission has identi ed the award-making process as beholden to history and dependent on previous determinations, commenting that “some parts of awards are more historical relics of the relative bargaining strength of past protagonists than a carefully thought out way of remunerating employees”.

 

The productivity commission proposes replacing the four yearly award review process conducted by the fair work commission with a new institution, a workplace standards commission, that would be empowered to review awards on an ongoing basis and proactively seek out information concerning market trends to guide its determinations. if adopted, this reform would go some way to ensuring that awards remain a relevant touchstone for the employers and employees. while the enterprise bargaining process can be a time-consuming, costly and ultimately dissatisfying process, it nevertheless provides employers with an opportunity to tailor employment arrangements in a way that best suits their business. award reform would ensure that the operation of the Boot does not impose unreasonable constraints on parties at the enterprise bargaining table and hopefully act as a catalyst for facilitating increased exibility at the level of individual enterprises.

 

Forecasting greater flexibility?

 

At first blush, the industrial relations landscape in australia might appear to hamper efforts by employers to introduce greater exibility to their workplaces. on closer analysis, there is scope within the existing framework for employers to take the initiative. Just as importantly, there appears to be a growing acceptance amongst thought leaders in this area that the system must continue to evolve in order for the workplaces of the future to ourish. reform of the ir system may be undertaken, as governments recognise the productivity imperatives for change. 

 

Contract workforces: is there a role for restraints of trade? 

 

 

Flexible Engagemetnt Models – What are the risks? 

 

Implementing a contingent workforce model, whether it be through “zero hours” contracts, casual or freelance pools, or using independent contractors, can give distinct advantages to organisations by providing exibility (allowing an organisation to “scale up” or “scale down” labour). it also reduces the compliance costs associated with the traditional employer-employee model.

 

However, implementing a exible engagement model is not without challenges. organisations need to give careful consideration to how they will seek to protect their commercial interests both during the engagement of the worker and upon the cessation of that engagement. this is particularly so where a contract worker’s commercial value lies beyond their skill and service but instead in the worker’s knowledge of, and access to, an organisation’s con dential and commercially sensitive information and/or clients.

 

Under an employer-employee model, such commercial interests are protected, or can be readily protected, by inherent duties of delity and con dentiality, or by a post-employment restraint. in contrast, the very nature of a contingent workforce model, being that it prizes exibility and emphasises non-exclusivity, often serves to undermine these “standard” protections that are afforded to an employer.

 

Organisations should keep in mind that the engagement of a contractor under an arrangement that includes a restraint of trade is an indicator that the relationship is one of employer and employee rather than of principal and contractor. if an employment relationship was found to exist between the organisation and the worker, the worker would be entitled to the usual employee entitlements and protections. 

 

How to protect business interests

 

Organisations should consider whether a restraint of trade is desirable. it may not be if a worker is engaged as a short term “freelancer” doing routine non-sensitive commercial work. conversely, where a worker is engaged on a commercially sensitive project that may involve exposure to con dential information or that may involve liaising with high performing employees, contractors or customers of the organisation, then a restraint may be important to best protect the organisation’s business interests.

 

Industry-based norms should also be considered. for example, workers engaged in the information technology sector, which has an accepted practice of “freelancing”, may expect or demand that they not be restrained from applying their skills or knowledge and that they are able to work for others at the same time or soon after each engagement.

 

Is a restraint of trade enforceable?

 

If an organisation chooses to use restraint of trade clauses with its contract workforce model, would they be enforceable?

 

Post-employment restraints are dif cult to enforce. the case law that has developed to date has mostly considered a restraint of trade in an employment or sale of business context, but there have been a handful of cases which have considered whether such provisions can lawfully be included in independent contracting arrangements.

 

A contractor may obtain special knowledge of the principal’s operations or gain in uence over customers as result of customer contact during the engagement. However, there is a distinction between a restraint of trade clause which is generally found to be an accepted and necessary part of some employment or exclusive contracting arrangements, and a clause inserted into a contract purely to protect the principal’s business, with no corresponding obligation on the principal to “absorb” the contractor’s services for the duration of the engagement.

 

For example, it would be dif cult for a principal to enforce a restraint if a person is engaged on a “zero hours” contract, as a freelancer, or under a similar model of contingent work. where there is no promise of ongoing or regular work, it is likely that a court would find it unreasonable for a principal to seek to prevent a worker from nding other work and it would not enforce the restraint of trade in the circumstances.

 

The onus will be on the principal to show that the restraint is reasonable in order to protect the organisation’s legitimate business interests. 

 

Flexibility vs business interests

 

As enforceability of post-engagement restraints is less certain with a contingent workforce, organisations will need to consider whether they can impose and enforce robust con dentiality obligations. the key will be to select carefully which roles are to be lled by contingent workforce models, rather than traditional employees.

 

There is also an opportunity to think outside the box. for example, in some situations, a post-engagement restraint on competition may be achieved by entering into a development deal, with an option to buy. once the work product is purchased, the principal/buyer can include a restraint in the sale contract. this means that, during the development period, there is nothing to stop the contractor from competing. However, the engagement contract can make payment contingent on certain milestones and deadlines, creating an incentive to work in the best interests of the principal. separate contractual obligations to keep con dential any information provided by the principal during the development period could also be included. where the desire for exibility outweighs the business imperative to protect customer connections or con dential information, exible engagement models will be appropriate. on the other hand, where the role involves signi cant exposure to key clients or information, the traditional employment or exclusive independent contracting model may best protect an organisation’s business interests. 

 

Now you see me, now you don’t: the rise of digital recruitment strategies 

 

As with the workplace generally, recruitment processes are continually evolving. Two recent trends, however, appear to be in stark contrast to each other. 

 

Blind recruitment

 

During the recent federal election campaign, Bill shorten announced that, if elected, a labor government would work with the australian public sector commission to develop “blind” application processes for apsc recruitment. at least one announcement speci cally mentioned age as a criterion to remove from recruitment processes. this may be in response to the australian Human rights commission’s may 2016 report, willing to work, reporting on the aHrc’s national inquiry into discrimination against older australians and australians with a disability.

 

Blind recruitment is not new, nor is it widespread, but it is gaining increased popularity as a way of addressing unconscious bias, and so reducing the risk of discrimination claims. to date, blind recruitment has generally been used as a strategy to address gender and/or ethnicity bias, to increase the diversity of the applicant pool and reduce gender and race based discrimination. many reports and studies assert that blind recruitment is a successful strategy to achieve its stated goal of broadening the diversity of the applicant pool.

 

Youtube Cvs

 

By contrast, some employers are reportedly trialling youtube videos to hire interns. this recruitment strategy actively highlights the applicant’s personal characteristics rather than removing them. Video cVs are also designed to broaden the applicant pool, but in this case it is by assisting applicants with limited experience in writing cVs or participating in interviews to progress through the application process, rather than focussing on applicants with attributes often protected under anti-discrimination legislation.

 

Employers looking to adopt a similar approach should be cautious. the youtube cV recruitment approach could be challenged as an unlawful process because it may indirectly discriminate on the basis of age, similar to the outcome in Virgin Blue Airlines Pty Ltd v Hopper & Ors [2007] Qsc 75. in that decision, the employer had used group based selection activities designed to test whether an applicant had “Virgin air”, one of the required competencies for the role. all the successful applicants through this process were aged under 36 years. the process was also criticised because the assessors all tended to be young and identi ed “Virgin air” as being similar to themselves.

 

Digitisation and recruitment

 

With ever increasing digitisation, and the rapid growth of social media, it seems inevitable that recruitment techniques will adopt these technologies, including searching facebook and linkedin pro les during recruitment processes. in doing so, employers need to recognise that the traditional paper based cV recruitment process remains, rightly or wrongly, the neutral benchmark.

 

Employers that use recruitment methods that stray from the traditional approach, to the detriment
of applicants with attributes which are protected under anti-discrimination legislation, must be able to show that the method used is objectively fair. any method employers adopt should accurately measure the required competencies for the role. where these competencies may be challenged as discriminatory, an employer may be able to defend that claim if they can show the competencies are inherent requirements of the role and (where relevant) reasonable adjustments have been or cannot reasonably be made. 

 

A hot desk or a home desk? a cubicle or a couch? managing changing of ce environments 

 

Advancements in digital technologies, a greater demand for innovative and exible workplaces, cost cutting and market place competition have signi cantly eroded the traditional model of work. In a number of workplaces, hot desking is now the norm. 

 

Hot desking – what is it really?

 

Hot desking is a workplace design in which employees do not have permanently assigned desks or cubicles. instead, workers move around to different parts of the of ce during the day or on different days. an employee might arrive at work and spend an hour or two in a meeting, then come to a desk and in the afternoon move to a communal table to work.

 

Employers nd hot desking attractive for a number of reasons. it reduces of ce space and associated costs. for example, a hot desking workplace might have 1,000 employees but only 600 desks, with the rest of the space being used for alternative seating arrangements. along with open plan environments and sit/stand desks, it can operate as a solution to excessive sitting. this is particularly relevant to employers as safe work australia recently reported that “excessive occupational sitting”, in other words “too much sitting”, is a potential wHs issue. Hot desking also has cultural bene ts. it increases face to face contact between workers and can help to “cross fertilise” ideas within an organisation. 

 

Issues to watch for as with any workplace change, hot desking raises a variety of issues for employers to manage:

 

• Employers should be conscious of how they manage their employees in an open plan or hot desking workplace. Employers should have closed and private spaces where discussions can take place.
• stories now frequently circulate about employees racing to work in the morning to secure the same desk each day. complaints about “taking” desks or moving property from a desk have been raised as a form of workplace bullying.
• Hotdesking can also have an adverse impact on an employee’s mental health and wellbeing, with increased feelings of isolation, lack of stability and consistency, alleged increased risk of illness due to sharing of ce equipment
• and physical risks associated with appropriateness of workstations for people with different ergonomic needs.
• protecting con dential information over telephone calls, on computer screens, at the photocopier and on the move from desk to desk.

 

To fully realise the bene ts of new workplace arrangements, employers need to ensure they can tailor workspaces to individual needs if and when required. Employers should also ensure that they have a policy in place that outlines the system and allows exibility to anticipate and prepare responses for the possible adverse effects of the changes. 

 

Make yourself at home: what could be the future role of safety regulators? 

 

it should come as no surprise that a lot of australian workers are performing work at home, either informally “catching up” or formally on exible working arrangements. with employees and employers increasingly moving away from traditional workspaces, what could this mean for the role of safety regulators?

 

In the future, safety regulators may start to more closely examine work-from-home arrangements. Employers have a duty to protect the health and safety of workers when they perform work at home. “workplace” is very broadly de ned in the model work Health and Safety Act to include any place where work is carried out for the person conducting a business or undertaking (PCBU). the de nition of “workplace” under the Victorian and western australian legislation is similarly broad. this includes where work is performed periodically. if a worker performs work at home, this will be considered a workplace to which a pcBu’s duty of care applies.

 

clause 48 of the model work Health and Safety Regulations expressly deals with the issue of working from home:

 

• a pcBu must manage the risks associated with remote or isolated work, including ensuring effective communication with the worker carrying out the remote or isolated work.
• safety regulators in many australian jurisdictions include working from home as an example of remote or isolated work on their websites. working remotely often involves working alone, which increases the risk of harm because a worker may not have the assistance of other people if required. this is one reason why it is important to maintain effective communication with remote workers.

 

Two worker’s compensation cases where workers have fallen down stairs at home, demonstrate the connection with “work”, whether the employer is aware of the arrangement or not. In Hargreaves and Telstra Corporation Ltd [2011] aata 417, an employee had an informal arrangement with her employer to cover the cost of setting up an of ce at home, working there two days a week. she went to get cough medicine after violently coughing and fell down the stairs. the tribunal found that this fall arose out of the worker’s employment, similar to a toilet or meal break. a second fall was similarly linked to her work as it occurred while in the process of locking her front screen door, which the employer had instructed the worker to do.

 

Hopkins v department of Education [2014] nswwcc 258 involved a teacher marking papers at home, which was “standard practice” because there was not enough time to perform this work before the school closed at 5pm. the employer argued that it had “discrete regular hours of employment” and had not encouraged work outside of these hours. the tribunal found that the requirements of the job indicated an “implied inducement to perform tasks” outside these hours and the employer was found liable to pay workers compensation. 

 

What should employers do:

 

 

When local employees go “remote”: reconsidering management approaches 

 

Managers are increasingly called upon to manage employees via technology, rather than face to face, as exible working practices, a lack of public transport and/or car parking turn local employees into remote employees. While the basic principles of management apply equally to employees who work remotely, what risks increase with distance? 

 

Bullying

 

This risk increases where meetings are conducted remotely because a manager cannot see an employee’s non-verbal cues, and the employee may not have access to interpersonal of ce support structures. managing remote teams may lead to bullying complaints, both about management and about peers and subordinates, where employees misinterpret or miscommunicate over technology. for example, in Commonwealth Bank of Australia v Reeve (2012) 217 ir 335, an employee felt bullied via group teleconferences in which he had to report unsatisfactory performance to the group.

 

Employees who are being performance managed can claim that they are the victims of bullying. the Fair work Act 2009 (cth) makes clear that reasonable management action taken in a reasonable way does not constitute bullying.

 

It is important to keep clear and comprehensive records of any performance management process, particularly of conversations to which there are no other witnesses.

 

Workplace surveillance

 

Where an employer is concerned that an employee is not producing enough work, or is using employer devices for non-work purposes, it may be tempting to search the employee’s electronic footprint for evidence of non-performance or misconduct. However, if an employer seeks to rely on surveillance of employees’ electronic communications for the purpose of managing performance (or for any other purpose), it is necessary to ensure compliance with applicable laws governing workplace surveillance, such as the workplace Surveillance Act 2005 (nsw). generally, under these laws, consent or appropriate notice to the employee is required (although consent can be implied in some cases).

 

Discrimination

 

Employees who work from home may do so because of needs associated with a protected attribute under discrimination law (such as age, disability, family or carer responsibilities). where that is the case, employers need to ensure that performance management does not relate to such attributes, and to distinguish the reason for the performance management from the fact that the employee works remotely. 

 

Safety

 

Employees working remotely may experience social isolation, loneliness and depression if they do not feel integrated within a team. this can also arise when working from home (see Make yourself at home article above).

 

Termination of employment

 

the means by which an employer noti es an employee working remotely of any decision to bring the employment relationship to an end can also expose an employer to risk. there has been a series of applications in the fair work commission for an unfair dismissal remedy where the employee has been noti ed of dismissal by text message.

 

In Martin v decoGlaze Pty Ltd [2011] fwa 6256, the fwc considered that it was not unfair to dismiss an employee by text message (followed up by a letter), including because the outcome would have been the same whether or not a face to face meeting was held. However, in that case the fwc stated that in most situations, termination of employment by text message is not appropriate. other cases have borne that out. in one such case, a dismissal by text message was described as “brutal, gutless and outrageous” (Kaye v Fahd [2013] fwc 1059). it is likely that similar considerations would be relevant if the fwc were to consider dismissal by other informal remote means, such as social media or chat.

 

Strategies for managing remote employees

 

An important risk mitigation strategy is to make sure that both the remote employee and their manager clearly understand what is expected of the employee. Employers should establish clear policies, procedures and expectations, covering:

 

• the type and frequency of reporting and communication with managers
• the employee’s expected work product and outputs and how these will be measured
• risks associated with performing the work remotely and ensuring that employees understand and have been adequately trained how to manage those risks
• how often employees should contact their manager or supervisor when working remotely including whether an employer needs a “check-in/check-out” system
• permitted use of employer technology and resources; and • grievance procedures.

 

Employees who are expected to work autonomously and remotely need to be trained on these policies and procedures so that they can understand and apply them effectively 

For further information, please contact:

 

 

Trent Sebbens, Partner, Ashurst
trent.sebbens@ashurst.com