Are flexible working arrangements under threat?

Most of us have worked from home at one point or another. With developments in technology, we can perform work at home, at the gym, at the soccer ground, from the car, from bed. And one of the joys of working from home or remotely is that there is no strict dress code: you can work in pyjamas, gym gear, jeans, fluffy socks - or can you?

A recent decision involving an employee who fell down stairs at home (wearing socks) may threaten this flexible (and comfortable) way of working.

How can employers balance the obligation (and need) to provide flexible work arrangements against the legal risks arising from such arrangements? The analysis in this article will show that employers are faced with a difficult balancing act when assessing a request to work from home.

Hargreaves v Telstra

The Administrative Appeals Tribunal (Tribunal) found that injuries suffered by Ms Hargreaves while she was working from home were sustained “in the course of employment” and so compensable under the Safety, Rehabilitation and Compensation Act 1988 (Cth). Ms Hargreaves fell down the stairs twice at her house while having a break from work. On both occasions she was descending the stairs in socks, began coughing and slipped. She subsequently developed a psychological injury as a result of what Ms Hargreaves called “excessive punitive and discriminatory” actions by Telstra as a result of the incidents. The Tribunal found that the psychological injury arose from issues regarding Ms Hargreaves’ return to work plans, namely that her manager had insisted on a return to work in the city office, which was not supported by medical practitioners. This case highlights the extent of potential workers compensation liability faced by employers in relation to working from home and remote working arrangements.

Do employees have a right to work from home?

Employees with carer responsibilities have the right to request flexible working arrangements, which may include working from home under the Fair Work Act 2009 (Cth) (FW Act). An employer may only refuse such a request on “reasonable business grounds”. Similar provisions regarding the right to request flexible work are found in the Victorian Equal Opportunity Act 1995, which sets out a list of factors to be taken into account in determining whether such a request is unreasonable.

Relevant factors include:

• The employee’s personal circumstances,
• The nature of the employee’s role,
• The effect on the workplace and the employer’s business, and
• Consequences for both the employer and employee if the arrangement is/is not allowed.

It has, until now, been questionable whether the safety of the home working environment or whether the employer being exposed to additional liability under workers compensation laws would fit within any of these factors and so, be proper considerations.

Now, the impact of claims on an employer’s claims history for purposes of the management of its workers compensation premiums will be argued to fit within the third and possibly fourth bullet points above.

Beyond the express rights to request flexible working arrangements, state and federal antidiscrimination laws prohibit discrimination on the basis of a protected attribute (including a person’s sex, family responsibilities, disability or age). In some cases, a failure to provide flexible work has been found to amount to indirect discrimination. Indirect discrimination is unlawful if the policy, condition or requirement is not reasonable in the circumstances. Where discrimination occurs employees will be able to pursue a claim under antidiscrimination laws or the ‘general protections’ provisions of the FW Act.

This new decision may well become a factor that employers can use to support a decision to reject a regular flexible working arrangement that involves home or remote work. It may also mean employers need to be more vigilant on the work performed by employees when they work from home because they are too unwell to attend the workplace.

But it is not all ‘doom and gloom’ (or liability and risk). In many cases, working from home will provide a benefit to the employer by facilitating the performance of work where it would otherwise not have been possible. In addition, offering flexible work arrangements is often more about being an ‘employer of choice’ than achieving legal compliance.

Other potential liability: OHS

The presence of risks to health and safety in the home or remote working environment may also give rise to liability under occupational health and safety (OHS) laws. The model Work Health and Safety Act set to commence in all Australian jurisdictions on 1 January 2012 defines workplace very broadly as “a place where work is carried out for a business and includes any place where a worker goes, or is likely to go, while at work”. Interestingly, areas outside the ‘home office’, such as the kitchen and toilet, are likely to be caught by this definition. What businesses are required to do in relation to these risks will be limited by what is reasonably practicable, which in the case or working from home is influenced largely by the limited level of control over private residences.

Relevantly, Part 3 of the model Work Health and Safety Regulations imposes specific obligations for ensuring the safety of the ‘general working environment’. Businesses should consider whether their risk assessments for working from home or remote work adequately address each of the risks identified in the Regulations (including lighting, ventilation, heating, ergonomics and remote work requirements). For example, employers may have to enquire whether there are pets at home. This would be a necessary and relevant risk to consider if a contractor or work colleague is required to deliver or service a printer or some other piece of equipment. If the hitherto placid poodle takes a dislike to the contractor or IT technician then further claims may follow. They may be looking for workers compensation statutory benefits or common law damages and relying on Hargreaves as authority for the liability of the employer.

Employers are increasingly implementing drug and alcohol policies which provide for random tests as part of a suite of measures to meet the duty of care obligations. These may need to take home-based work into account.

What should employers do?

Bear in mind that employees cannot be asked, as part of a flexible work arrangement agreement, to waive any right they may have to make a claim under the applicable workers compensation law. Such agreements are void at law.

Employers should:

• Carefully consider whether the arrangement is reasonable taking into account the inherent requirements of the role, the particular flexibility requested and any obstacles to success.
• Document the decision-making process and, if it is decided to reject the request, be prepared to justify this decision.
• Ensure a risk assessment of the home working environment is completed before the arrangement commences. Some employers allow employees to perform a self-assessment while others send someone to inspect the home office. The ‘working area’ should be clearly defined as part of this assessment.
• Make clear the employee’s ongoing obligations with respect to identifying hazards and risks, complying with policies and procedures (including wearing appropriate PPE and holding the handrail while on stairs) while working from home and reporting any incidents.
• Consider whether it is desirable to ‘trial’ the arrangement. This allows you to assess whether the arrangement is likely to be successful before committing to it on a long-term basis. Periodic reviews and termination of the arrangement with notice should also be considered.
• Communicate the details of the arrangement to the employee in writing and require the employee to sign off on the terms agreed. This will include details regarding sharing of costs, performance monitoring and confidentiality issues.
• Set a broader policy for irregular remote work or work from home to ensure all staff take appropriate precautions when working away from the office. This policy may be part of the policy that applies to the issue of work-related tools such as laptops, Blackberry phones or iPhones.

Freehills, an Australian-based international law firm

www.freehills.com