The new right to disconnect (RtD) laws under the Fair Work Act 2009 (Act) successfully passed parliament under the Fair Work Legislation Amendment (Closing Loopholes No.2) Bill 2023 on 12 February 2024.

From 26 August 2024, the new RtD laws will take effect for employers with 15 or more employees. One year later, on 26 August 2025, the RtD laws will take effect for small businesses with less than 15 employees.

What is the RtD?

The RtD is a new law designed to promote and create a work-life balance culture and prevent employers from contacting employees outside of normal work hours. The new RtD will be a provision in section 333M of the Act that states:

“An employee may refuse to monitor, read, or respond to contact, or attempted contact, from an employer outside of their working hours, unless their refusal is unreasonable.”

Section 333M (2) of the Act will include an equivalent right where the contact is from a third party (such as a client) relating to the employee’s work.

The right will also be included as a model term in all modern awards and will be explicitly recognised as a protected right under the Act. This means an employer will be prohibited from taking adverse action against an employee who is exercising their right not to respond to communications from their employer or a third party outside of their ordinary hours of work.

What is unreasonable refusal?

There will be some exceptions that apply, and there can be instances where contact by an employer will be necessary or reasonable, and an employee’s refusal is unreasonable.

The prescribed factors that must be considered when determining whether an employee’s refusal is unreasonable include:

• considering the reason for the contact;
• the method of contact and the disruption caused to the employee by the contact;
• whether the employee is paid for remaining available in the period when contact is made or attempted, or paid to work additional hours outside their ordinary hours of work;
• the nature of the employee’s role and level of responsibility; and
• the employee’s personal circumstances, including any family or caring responsibilities.

The legislation provides a non-exhaustive list, so other factors, such as patterns of behaviour, may also apply.

What if an employee and an employer disagree on a refusal?

An employee and employer must initially seek to resolve their dispute amongst themselves, through discussions or by applying the internal grievance, dispute, or complaint procedures in the workplace.

If the dispute cannot be resolved, either party can apply to the Fair Work Commission (Commission) to do either one or both of the following:

1. make a ‘stop order’; and/or
2. request the matter be arbitrated.

Stop Orders

The Commission can make orders it considers appropriate to stop ongoing or future conduct, such as:

The Commission’s powers in a stop order do not extend to awarding compensation. This means a disgruntled employee cannot seek payment for any alleged financial loss due to the employer (or client) continuing to contact them unreasonably outside of working hours.

However, breaching a stop order may attract civil penalties under the Act, which is a compensable remedy.

Arbitration

By agreement between the parties, the Commission may resolve the dispute through arbitration. As an impartial party, the Commission will determine an appropriate outcome based on the arguments and evidence, in a less formal manner than a hearing. The arbitration decision is final and binding for both parties.   

Model Clause in Awards

On 11 July 2024, the Commission published the RtD draft award terms for consultation, with a final published term expected by 23 August 2024.

The Commission developed the RtD model terms under the Business Equipment Award 2020, which contains:

• A standby allowance provision (clause 20.5).
• A provision enabling emergency roster changes on 24 hours’ notice (clause 12.3(a)(iii)).
• A provision establishing the terms and conditions to apply to a recall (or ‘call-back’) to work (clause 20.4).

Naturally, each Award and Industry may have different practices that shape the extent to which the RtD provisions apply. The Commission intends to allow interested parties to make applications after 26 August 2024 to vary the RtD terms in individual modern awards to address the specific circumstances of particular industries and occupations.

Following the implementation of the RtD model term in all awards, the Commission will create non-legislative, non-binding guidelines that are likely to clarify its approach to enforcing these provisions. Presently, the Commission has not committed to a timeline for the guideline’s availability but is expected to publish guidelines once it has dealt with some disputes concerning the operation of the right, allowing it to have some understanding of the practical issues for which guidance may be required.

How to prepare?

Consider how these changes might impact your current industry practices and business operations, including what processes might need to be introduced to ensure that you comply with the changes.

Take steps to review the direct impacts. These steps may include:

• reviewing existing employment and contractor agreements to ensure compliance with the new laws;
• reviewing the potential costs associated with the new laws under your industrial instrument (Award or enterprise agreement), such as allowance and overtime provisions;
• preparing relevant policies and procedures such as:
  • the use of work technology or communication boundaries outside of agreed working hours;
  • creating or updating your grievance, complaint or dispute procedures to accommodate these new changes;
• educating, communicating and providing training to:
  • workers about the new laws and employees’ boundaries;
  • managers and supervisors about managing employee boundaries.
• monitoring employees’ communication work activity outside of agreed working hours.

If you need assistance navigating the above steps, please contact us. We are happy to help.