My Blog

Category: Media Releases

  • The RBA should keep its finger off the interest rate trigger

    The RBA should keep its finger off the interest rate trigger

    by Greg Jericho

    Share

    With unemployment tumbling in February, the Reserve Bank of Australia (RBA) should resist the urge to raise interest rates, says Australia Institute Chief Economist Greg Jericho.

    Unemployment fell dramatically in February, defying the expectations of many policymakers and economists.

    While the RBA has genuinely seen low unemployment as a key driver of inflation, Jericho said their belief is misguided.

    “The Reserve Bank, we know, has this belief that unemployment needs to rise to lower inflation,” he said on the latest episode of the Dollars & Sense podcast.

    “We here at the Australia Institute and Centre for Future Work have been saying, ‘no, that’s completely wrong’.

    “Inflation has not been rising and falling because there’s more or less unemployment in the system – it was because of what has been happening on the supply side, what’s happening with corporate profits.”

    This view was supported by a 2023 report from the Organization for Economic Cooperation and Development (OECD), which found that high corporate profits was a more significant factor in driving inflation after the Covid-19 pandemic than wages.

    “Stop trying to put people out of work just to get inflation down. It’s a stupid thing to do,” said Jericho.

    “And, actually, these figures kind of confirm that.

    “Inflation has been slowing and what have we seen? Unemployment drop!”

    The drop in the seasonally adjusted jobless rate, from 4.1 to 3.7 per cent, means roughly 116,000 additional Australians were in work in February. This represents the single biggest improvement since the early 2000s, outside the core years of the pandemic.

    The next interest rate decision will be handed down by the RBA on 7 May.

    Dollars & Sense is available on Apple Podcasts, Spotify, Pocket Casts, Google Podcasts or wherever you get your podcasts.


    You might also like

    Centre For Future Work to evolve into standalone entity

    The Centre for Future Work was established by the Australia Institute in 2016 to conduct and publish progressive economic research on work, employment, and labour markets. Supported by the Australian Union movement, the centre produced cutting edge research and led the national conversation on economic issues facing working people: including the future of jobs, wages

  • Increasing minimum wage would not drive inflation up: new report

    Increasing minimum wage would not drive inflation up: new report

    Share

    A significant increase to the minimum wage, and accompanying increases to award rates, would not have a significant effect on inflation, according to new analysis by the Centre for Future Work at the Australia Institute.

    The analysis, The Irrelevance of Minimum Wages to Future Inflation, examines the correlation between minimum wage increases and inflation going back to 1997.

    It finds that, contrary to employer concerns, there is no consistent link between minimum wage increases and inflation in the modern Australian context.

    The report finds that a minimum wage rise of between five and 10 per cent in the Fair Work’s Annual Wage Review, due in June, is needed to restore the real buying power of low-paid workers to pre-pandemic trends, but would not significantly affect headline inflation.

    Key points:

    • Last year’s decision, which lifted the minimum wage by 8.65 per cent and other award wages by 5.75 per cent, offset some but not all of the effects of recent inflation on real earnings for low-wage workers.
    • At the same time, inflation fell by 3 full percentage points.
    • There has been no significant correlation between rises in the minimum wage and inflation since 1997.
    • Raising wages by 5 to 10 per cent this year would offset recent inflation and restore the pre-pandemic trend in real wages for award-covered workers.
    • Even if fully passed on by employers, higher award wages would have no significant impact on economy-wide prices.
    • A 10 per cent increase in award wages could be fully offset, with no impact on prices at all, by just a 2 per cent reduction in corporate profits – still leaving profits far above historical levels.

    “Australia’s lowest paid workers have been hardest hit by inflation since Covid. There is a moral imperative to restore quality of life for these Australians and this analysis shows that there is no credible economic reason to deny them,” Australia Institute and Centre for Future Work Chief Economist Greg Jericho said.

    “It’s vital the Fair Work Commission ensure that the minimum wage not only keeps up with inflation, but also grows gradually in real terms – as was the trend before the pandemic.

    “Whenever wages go up, the business lobby cries wolf, claiming it will cost people their jobs, shutter businesses and stifle competition.

    “The business lobby always has some reason that wages should be suppressed. But the historical data prove that concerns about inflation are not a credible excuse to deny low-paid workers a much-needed pay rise.

    “Even if businesses respond to minimum wage rises by charging consumers more, it would have a minuscule effect on inflation because it would be subsumed by much larger factors including chain disruptions, energy shocks, and corporate profits.”


    Related research



    The Irrelevance of Minimum Wages to Future Inflation



    Full report

  • Fixing the work and care crisis means tackling insecure and unpredictable work

    Fixing the work and care crisis means tackling insecure and unpredictable work

    by Fiona Macdonald in The New Daily

    Fiona Macdonald

    Acting Director, Centre for Future Work

    Share

    Originally published in The New Daily on March 8, 2024

    The Fair Work Commission is examining how to reduce insecurity and unpredictability in part-time and casual work to help employees better balance work and care.

    The Commission is reviewing modern awards that set out terms and conditions of employment for many working Australians to consider how workplace relations settings in awards impact on work and care. This follows a 2023 finding by the Senate Select Committee Inquiry into Work and Care last year that there is a “work and care crisis”.

    The Select Committee’s final report noted “too many Australians are working in conditions that lack predictable hours and thus pay”, making it difficult to manage their care responsibilities with paid work.

    Insufficient income to meet family needs, inability to plan, inability to access suitable care, high stress levels and lack of time for life are some of the negative impacts of insecure and unpredictable part-time and casual work for workers with caring responsibilities.

    Women are overrepresented in part-time and casual jobs, as they continue to provide most unpaid care for children, elderly parents, and sick or disabled family members. Among women, casual employment is most common among 15 to 34 year-olds, while for men it is highest among those aged 65 years and older. Women’s casual employment is linked to child-rearing.

    Pay rates in casual jobs are often lower than for employees in equivalent permanent part-time and full-time jobs, despite casual loadings. Underemployment is also high and unpredictable working hours are common among casual and part-time employees, including in services sectors such as retail and care. In both sectors, insecure casual jobs provide workers with very little control over their work hours. Lack of control over hours is often a feature of permanent part-time jobs as well as casual jobs

    In a job with unpredictable hours it can be extremely difficult to organise and manage the costs of care. For example, for parents, uncertainty of working hours and income can make access to reliable and affordable childcare impossible. Unpredictable short-hours rosters can make it barely worth working at all as income may not cover the costs of formal childcare.

    Good quality, secure part-time jobs have long been regarded as essential for greater gender equality in employment, including as part-time jobs can support better sharing of care among men and women. However, the expansion of part-time work in the Australian economy since the 1980s has been an expansion of casual and part-time jobs that are highly insecure, often low-paid and with poorer conditions, protections and entitlements than most full-time jobs.

    It is possible to make casual and part-time jobs more secure and predictable. The Fair Work Commission’s analysis of industrial awards shows that there are many provisions in awards applying to part-time and casual employment that contribute to insecurity and lack of predictability. Award provisions include, for example, short minimum payments periods, broken shifts, poor guarantees around minimum and regular hours of work, little or no payment for travel time between different work locations, little or no notice of roster changes and poor compensation for being on-call.

    Secure work and a living wage are fundamental to good work and care arrangements. Secure work doesn’t just mean ongoing work or protection from unfair dismissal. Secure work entails adequate and predictable work hours, reasonable flexibility of working time, compensation for unsocial hours, safety at work and access to union representation.

    Worker-carers should also have rights to carer’s leave and personal leave, regardless of their employment arrangements. Systems of portable leave entitlements could help all workers manage care and work at all stages of their working lives. These and other leave entitlements would have the benefit of supporting a better sharing of care.

    The Fair Work Commission’s will complete its review in the middle of 2024. It is to be hoped that this leads to improved working conditions for worker carers, enabling men and women to care and work without paying the price through job insecurity.


    You might also like

  • Aged care wage rise decision crucial for elderly Australians

    Aged care wage rise decision crucial for elderly Australians

    by Fiona Macdonald

    Share

    The Australia Institute says wage rises for aged care workers will improve the lives of elderly Australians after a crucial Fair Work Commission decision.

    The Commission today announced rises between 2 and 13.5 per cent for aged care workers from July 2024.

    “Today’s decision is crucial to supporting safe and quality care for elderly Australians, and the sustainability of the aged care workforce,” said Dr Fiona Macdonald, Policy Director at the Australia Institute’s Centre for Future Work.

    “For too long, aged care work has been undervalued and low paid. The Fair Work Commission’s decision to award additional pay rises, on top of an interim 15 per cent wage rise, is vital to fixing this.

    “The introduction of a new classification structure will also provide the basis for the ongoing recognition and valuation of aged care work.

    “It’s essential the federal government commits to fully funding the additional increases of up to 13.5 per cent from the start of the next financial year.”

    “The exclusion of indirect care workers from today’s decision is a lost opportunity to support the lowest paid workers.”


  • Most Coalition voters back right to disconnect

    Most Coalition voters back right to disconnect

    by Fiona Macdonald

    Share

    Two-thirds of Coalition voters back newly legislated protections for employees’ right to disconnect from emails and calls outside of work, new research from the Australia Institute shows.

    It comes as the federal opposition pushes amendments to the Fair Work Amendment Bill 2024 – subject to a Senate inquiry due to be handed down today – to scrap the right. The Coalition has vowed to overturn the legislation if it wins government.

    Key findings: 

    The Australia Institute’s Centre for Future Work surveyed 1,017 Australians about the right to disconnect in late January, before the bill passed parliament. 

    • Three-quarters (76%) supported the federal government legislating a right to disconnect, while 11% were opposed.
    • Support for legislating a right to disconnect was high across the political spectrum.
    • Greens (90%) and Labor voters (83%) were the most supportive. This was followed by two-thirds of Coalition voters (66%). Just 18% of Coalition voters opposed it.
    • Three in four ‘independent/other’ voters (77%) and 61% of One Nation voters supported legislating a right to disconnect.

    “The opposition appears determined to remain out of touch with its own voters by pledging to roll back the very policies they support,” said Dr Fiona Macdonald, Policy Director, Industrial and Social at the Centre for Future Work.

    “The Coalition joined the business lobby in claiming the right to disconnect would cause the sky to fall in. They were wrong. Instead, this survey finds most Australians across the political spectrum back the legislation to stop work encroaching into their personal and family time.

    “We know that unpaid overtime is endemic. Our research shows employers are stealing more than 280 hours a year from their workers. This average employee loses $11,055 a year to unpaid overtime.

    “The implementation of the right to disconnect is a commonsense step towards rectifying this exploitative imbalance.”

    The Senate Education and Employment Legislation Committee is due to report on the Fair Work Amendment Bill 2024 today.


    Related research



    Polling – Right to Disconnect



    Full report



    Disclosure Statement

  • On International Women’s Day: How the Fair Work Commission Can Really Take On the Gender Pay Gap

    On International Women’s Day: How the Fair Work Commission Can Really Take On the Gender Pay Gap

    by Lisa Heap in The Conversation

    Lisa Heap

    Senior Researcher

    Share

    Originally published in The Conversation on March 8, 2024

    On occasion of International Women’s Day, the Centre for Future Work’s Senior Researcher Lisa Heap reviews the opportunities to use recent industrial relations reforms to more ambitiously address Australia’s gender pay gap.

    This International Women’s Day, it is time to call on Australia’s workplace umpire, the Fair Work Commission, to finally close the gender pay gap.

    Half a century after the commission’s predecessor granted women “equal pay for equal work” in a landmark case in 1969, the gap remains between 12% and 21%.

    Amendments to the Fair Work Act by the incoming Labor government in 2022 gave it new tools to close the gap by addressing the undervaluation of work in traditionally female-dominated occupations.

    If it uses these tools to their full potential, 2024 will be a landmark year in the genuine achievement of equal pay for equal work.

    What we’ve been doing hasn’t much worked

    Traditionally in Australia, addressing gender-based undervaluation has relied on two approaches.

    The first has been to argue the business case for gender equality – convincing employers they’ll be rewarded for “doing the right thing”.

    The second has been to bring equal pay cases to tribunals.

    Unfortunately, neither approach has been successful. In particular, pushing for equal remuneration through tribunals has been time-consuming and expensive.

    These tribunals, historically working on models of male full-time wage earners, have struggled to understand the undervaluation of work performed predominantly by women.

    The commission’s new tools

    The commission’s act has been rewritten to require it “to promote job security and gender equality.”
    It also has the power to make equal remuneration orders either on its own initiative or on application in order to bring about equal pay for work of equal or comparable value.

    A further new development is the establishment of expert panels to assist in gender-related cases. Advice from gender experts should assist in overcoming historical gender biases in commission decisions.

    Perhaps the most promising tool is the change to the commission’s modern awards objective, which requires it to eliminate gender-based undervaluation of work and provide workplace conditions that facilitate women’s full economic participation each time it reviews an award.

    Among other things, this requirement is likely to result in provisions that ensure part-time work is treated equally to full-time work and ensure a better balance between work and caring responsibilities.

    Amending awards is likely to be particularly important for women given that almost three in five of the workers on awards are women. Men are mainly on negotiated agreements.

    If the commission wanted to, it could hold a wide-ranging inquiry into the many factors that have contributed to gender-based undervaluation of women’s work.

    It could also review entire industries and occupations that are female-dominated, upgrading multiple awards at the same time. This would avoid lengthy and costly reviews of individual awards.

    What’s likely in 2024

    The Fair Work Commission’s resolve to make lasting change will be tested by several matters currently before it.

    The commission is due to issue its final decision in the case lodged by the Australian Nursing and Midwifery Federation, the Health Services Union, and the United Workers Union on the value of the work done by workers in aged care.

    An initial interim decision delivered in 2022 awarded some – but not all – of these workers a 15% increase, finding that work in feminised industries had been historically undervalued and the reason for that undervaluation is likely to be gender-based”.

    Workplace Relations Minister Tony Burke backed the decision, saying it was merely the “first step”.

    Another application, for nurses and midwives outside of aged care, was lodged by the Australian Nursing and Midwifery Federation in February this year.

    The commission has already started the process of grappling with gender-based undervaluation in modern awards, commissioning research that documents the segregation of women and men into different occupations and industries.

    Further research documenting the history of a select group of female-dominated modern awards and identifying the extent to which common elements indicate gender-based undervaluation, is due to be released in April.

    It will feed into the annual wage review due by the middle of the year.

    How to be bold

    Gender-based undervaluation of women’s work won’t be eradicated by incremental adjustments.

    Here are three bold steps the commission could take:

    • grant a minimum interim 12% increase (one estimate of Australia’s national gender pay gap) across the board for female-dominated awards in this year’s annual wage review
    • develop new systems for classifying work and ascribing work value, breaking with the previous standards built around skills and qualifications in male dominated occupations
    • better consider the uneven bargaining power in industries such as nursing where governments fund care work and try to restrain costs.

    The changes to the Fair Work Act that allow multi-employer bargaining are a start, but unlikely alone to correct the undervaluation of women’s work.

    In female-dominated industries where collective bargaining is non-existent or ineffective, the commission should step in and further increase wages.

    The Fair Work Commission has been given the tools. This should be the year it applies them.


    You might also like

  • Aged care reforms fall short on quality, safety

    Aged care reforms fall short on quality, safety

    Share

    Mandating sector-wide aged care training requirements would make elderly Australians safer while bolstering workforce stability, according to a new analysis by the Australia Institute.

    The Centre for Future Work warns that reforms due to come into effect from July – including screening requirements to exclude unsuitable workers and a mandatory code of conduct – do not go far enough to ensure the quality and safety or recognise workers’ skills.

    Key findings:

    • The report, Professionalising the Aged Care Workforce, calls for the mandated, sector-wide professional registration and minimum aged care worker qualifications that require all workers to have at least a Certificate III
    • Costs would be minimal because two out of three personal care workers already have a Certificate III or higher qualification
    • Mandating minimum training requirements would lead to higher quality and safer care as well as better career paths for workers to help meet the growing and complex needs of an ageing Australia
    • Two of every three personal care workers already hold a Certificate III or higher qualification
    • Minimum aged care worker qualifications to Certificate III level and access to ongoing professional development were key recommendations of the 2021 Aged Care Royal Commission

    “This is about long-term sustainability for the aged care workforce,” said Dr Fiona Macdonald, Policy Director, The Centre for Future Work at the Australia Institute.

    “Setting a minimum education standard for all aged care workers would lead to higher quality care. It would also allow for the recognition of the skills required to care for society’s most vulnerable.

    “Four out of five aged care workers are women and care work has long been undervalued and low paid. Fixing this is vital for people receiving care, workers and our communities.

    “Workers are facing new demands to comply with screening and obligations to meet standards under a new code of conduct. Yet, there is still no formal recognition of workers’ skills or system-wide requirements for accredited training.

    “While the government is moving to screen out unsuitable aged care workers, it is failing to give those working in or considering aged care meaningful professional development or options for career progression.

    “Mandatory and coordinated accreditation would allow workers to have their skills recognised, boost job satisfaction and make the industry more attractive as a long-term career.

    “The Aged Care Royal Commission has been crystal clear about the need for these reforms. It’s beyond time to deliver them.”


    Related research



    Professionalising the Aged Care Workforce



    Full report

  • The gas industry is laughing at us as they make more money but not more tax

    The gas industry is laughing at us as they make more money but not more tax

    by Greg Jericho in The Guardian

    Greg Jericho

    Chief Economist

    Share

    Originally published in The Guardian on February 29, 2024

    Despite soaring production and revenues the gas industry is not paying more tax

    Australia produces more than six times the amount of gas needed to supply our manufacturing industry, power stations and homes. But more than 80% either heads overseas as LNG exports or is used to convert natural gas into LNG:

    We export much more gas than we used to. In the 2000s we exported around 14m tonnes of LNG a year. Now, due to the opening of the Gladstone LNG terminal, we send 83mt overseas – the second most of any nation.

    But more production and more revenue has not led to more tax, even though the petroleum resources rent tax (PRRT) is in place to supposedly raise revenue from windfall profits such as those generated by the gas industry after the Russian invasion of Ukraine.

    When Australia exported 15.4mt of LNG in 2008-09, the government raised $2.2bn in PRRT. In 2022-23, exports had increased 437% to 83mt but PRRT revenue was up just 7% to $2.4bn.

    Did gas suddenly become unprofitable?

    No, the problem is that the PRRT is open to manipulation that enables companies to use costs to reduce their PRRT liability such that it appears they are never making “super profits”.

    In last year’s budget, the government finally proposed limiting the deductions to the PRRT in any year to 90% of LNG project revenues. Alas that proposal also had a punchline. The government announced the changes would raise an extra $2.4bn in PRRT over the next four years. That was roughly a 30% increase in tax.

    Thirty per cent!

    You would think the gas industry would launch the mother of all campaigns against it. But no. They loved it.

    The day it was announced the gas industry peak body recommended bipartisan support as the changes “would see more revenue collected earlier”. The key word was “earlier”. It won’t raise more tax; it just moves some tax from later to earlier.

    But it won’t even do that.

    In December’s midyear economic and fiscal outlook, the government announced it was revising down its estimate of how much PRRT would be raised over the next four years.

    How much did it reduce its estimate by?

    You guessed it: $2.4bn.

    We need to change the way the PRRT operates, we need to tax our gas more and we need to do it now.


    You might also like

    Australia’s Gas Use On The Slide

    by Ketan Joshi

    The Federal Government has released a new report that includes projections of how much gas Australia is set to use over the coming decades. There is no ambiguity in its message: Australia reached peak gas years ago, and it’s all downhill from here:

    Commonwealth Budget 2025-2026: Our analysis

    by Fiona Macdonald

    The Centre for Future Work’s research team has analysed the Commonwealth Government’s budget, focusing on key areas for workers, working lives, and labour markets. As expected with a Federal election looming, the budget is not a horror one of austerity. However, the 2025-2026 budget is characterised by the absence of any significant initiatives. There is

  • More loopholes to close on insecure work … and a new right to disconnect from work

    More loopholes to close on insecure work … and a new right to disconnect from work

    by Fiona Macdonald

    Fiona Macdonald

    Acting Director, Centre for Future Work

    Share

    Late yesterday the final part 2 of the government’s Closing Loopholes industrial relations bill was passed by the Senate.

    This means Australia’s employment laws will be further amended to tackle the problems of insecurity and low pay, with the changes targeting casual employment and gig platform work arrangements. The package also includes a new right for employees to disconnect from work outside their paid work time.

    A new definition of casual employment will be included in the Fair Work Act, making it harder for employers to classify their employees as casual when, in reality, the employees are required to work regular hours for a continuing and indefinite period. The legislation also establishes a new pathway for casual employees to seek permanent status.

    The casual employment changes should go some way to stopping and reversing the growth of so-called ‘permanent casual’ arrangements, which have become widespread. Workers in these arrangements are actually in permanent jobs while they are given casual employment status.

    Casual employment means lower pay, little or no job security and no right to paid leave. Lack of employment security in casual employment creates all sorts of other insecurities for workers, such as limiting access to finance, secure housing and childcare. According to government estimates, there are over 850,000 casual employees who could be eligible to seek permanency under the legislation.

    Gig worker or ‘employee-like’ reforms in the Closing Loopholes package aim to address low pay and poor working conditions experienced by workers on digital platforms who are engaged as independent contractors, are low-paid and/or have very limited bargaining power, such as delivery riders and rideshare drivers. The Fair Work Commission will now be able to make orders for minimum standards for these digital platform workers.

    This ‘employee-like’ reforms extend the scope of Australia’s Fair Work Act to provide protections and rights to vulnerable workers, who are not employees. This should prove to be an effective response to the challenges facing vulnerable ‘gig workers as argued by the Centre for Future Work’s David Peetz has argued in a recent Centre for Future Work report on self-employment.

    Closing Loopholes also includes a ‘right to disconnect’ from work, an initiative of the Greens, included to get the minor party’s support for the bill. In future, employees will have a right to refuse to respond to contact from their employers outside their scheduled hours if the contact is unreasonable.

    Go Home on Time Day research conducted in 2022 by the Centre for Future Work found that 8 out of every 10 workers supported a right to disconnect. This level of support is not surprising, given the amount of unpaid overtime workers are doing. In 2023, the Centre for Future Work reported employees are, on average, working 5.8 hours a week — total of 280 hours, or 7 weeks, a year of unpaid overtime per employee.

    The new right to disconnect is a practical solution for many employees that should also assist to shift cultures in workplaces where reliance on unpaid overtime has become the norm.

    Some employer groups are arguing the Closing Loopholes legislation ‘goes too far’. To the contrary, if there is a weakness in the legislation, it is that it does not always account for power imbalances in the relationship between employees and employers. And this may limit the effectiveness of the some of the new provisions.

    As a result of amendments put forward by independent David Pocock and the two Jacqui Lambie Network senators in response to employers’ concerns, a number of the bill’s provisions will be weaker in the final legislation than they were in the government’s original bill.

    The amended bill passed by the Senate yesterday provides greater scope for employers to refuse casual employees’ requests for permanent status. The proposed prohibition on employers unreasonably contacting employees out of work hours has been removed. In the amended bill the prohibition is now on employers punishing employees who refuse to monitor and respond to unreasonable contact.

    The Closing Loopholes part 2 reforms are welcome changes that will limit some of the damage and disadvantage caused by insecure work and the encroachment of (unpaid) work into life outside work.


    You might also like

  • “Right to Disconnect” Essential as Devices Intrude Into Workers’ Lives

    “Right to Disconnect” Essential as Devices Intrude Into Workers’ Lives

    Young woman using cell phone to send text message on social network at night. Closeup of hands with computer laptop in background

    Share

    Australia’s Parliament is set to pass a new set of reforms to the Fair Work Act and other labour laws, that would enshrine certain protections for workers against being contacted or ordered to perform work outside of normal working hours. This “Right to Disconnect” is an important step in limiting the steady encroachment of work demands into leisure, family, and recreation time. In the most recent edition of our Centre’s annual Go Home on Time Day survey, the average Australian worker performed 280 hours of unpaid time per year — and that time is worth a staggering $130 billion in annual lost incomes. The ubiquitous use of digital devices (from email to texts to WhatsApp) is facilitating this expansion of time theft.

    Dr Chris F. Wright is Associate Professor in the Discipline of Work and Organisational Studies at the University of Sydney, and also a member of the Centre for Future Work’s Advisory Committee. He has prepared this excellent summary (originally published in The Conversation) about the benefits of a right to disconnect. Please also see our 2022 report, Call Me Maybe (Not!), by Eliza Littleton and Lily Raynes, on examples of enshrining the right from other countries, and survey evidence showing Australians’ strong support for the idea.

    Smartphones Mean We’re Always Available to our Bosses. ‘Right to Disconnect’ Laws are a Necessary Fix

    by Dr Chris F. Wright

    Australian workers are set to have the right to disconnect from their workplaces once they clock off for the day.

    This will “empower workers to ignore work calls and emails after hours [from their employers], where those demands are unreasonable”, according to Greens Senator Barbara Pocock who has been driving the change.

    Last week, the Senate committee reviewing the “Closing Loopholes” amendments to the Fair Work Act recommended introducing a right to disconnect to support “the development of clear expectations about contact and availability in workplaces”. On Wednesday, the Albanese government indicated it supported the amendment.

    Why a right to disconnect is needed

    Last year, the Senate Select Committee on Work and Care drew attention to “availability creep” where employees are increasingly expected to complete work outside of work hours.

    Smartphones have made it easier for managers to contact workers any time. The shift to remote working during the COVID pandemic caused the boundaries between work and personal life to disintegrate further.

    According to a 2022 report by the Centre for Future Work, 71% of workers surveyed had worked outside their scheduled work hours often due to overwork or pressure from managers.

    This led to increased tiredness, stress or anxiety for about one-third of workers surveyed, disrupted relationships and personal lives for more than one-quarter, and lower job motivation and satisfaction for around one-fifth.

    Parliamentary inquiries have highlighted the negative consequences of working outside scheduled hours for mental and physical health, productivity and turnover.

    Availability creep has led to significant unpaid overtime which “takes workers away from a fair day’s work for a fair day’s pay”.

    The impacts are especially acute for certain groups of workers. Those on insecure contracts lack the power to resist availability creep. Those with unpaid care responsibilities are likely to experience intensified work/life balance.

    “Roster justice”

    The right to disconnect provides a solution to these challenges. The Senate select committee on work and care found such a right can provide workers with “roster justice” by giving more certainty over their working hours.

    Many countries in Europe, Asia, North America and South America have already established laws or regulations limiting employers contacting workers outside work hours.

    At least 56 enterprise agreements currently operating in Australia provide a right to disconnect. This includes agreements covering teachers, police officers and various banks and financial institutions.

    Industrial Relations Minister Tony Burke has indicated the right to disconnect legislation will provide employers with “reasonable grounds” to contact their employees outside work hours. This might include calling employees to see if they can fill a shift.

    If enterprise agreements with existing right to disconnect clauses are an indication, the Fair Work Commission will probably be asked to determine what contact outside of work hours is deemed “reasonable”. This approach seems sensible given the long tradition of the commission being asked to rule on what’s “reasonable” in other areas of employment law.

    If an employer “unreasonably” expects employees to perform unpaid work outside of normal hours the commission may be empowered to impose a “stop order” — and potentially fines — to prevent the employer from contacting employees outside hours according to Tony Burke.

    Unions including those representing teachers and police officers support a right to disconnect. According to the Police Federation of Australia:

    Not only do the police see that trauma, deal with the families’ trauma, deal with their colleagues’ trauma, have to investigate, have to go to court, and get media attention but they also have to go home and deal with their families […] The right to disconnect gives those officers that little bit of breathing space.

    Employment law experts and human resource specialists also believe there is a strong case for such a right given the negative impacts of availability creep on worker well being.

    Employer associations are less supportive. The Australian Chamber of Commerce and Industry (ACCI) told a recent Senate inquiry a right to disconnect would be “a blunt instrument which will do more harm than good, including for employees”. They claim employers will be less accommodating of employee requests for flexible work arrangements during normal work hours if contact outside these hours is no longer allowed.

    A banana republic?

    According to ACCI chief executive Andrew McKellar, a right to disconnect would be “the final step in Australia becoming a banana republic”.

    But it must be remembered that workers effectively had the right to disconnect before the smartphone. Such a protection needs to be explicit now technology has eroded the once-firm boundaries between work and home.

    As the nature of work and employer practices change, it’s essential for employment regulations to respond accordingly. Having a right to disconnect to protect workers from employers encroaching upon their free-time is a necessary response.


    You might also like

    Centre For Future Work to evolve into standalone entity

    The Centre for Future Work was established by the Australia Institute in 2016 to conduct and publish progressive economic research on work, employment, and labour markets. Supported by the Australian Union movement, the centre produced cutting edge research and led the national conversation on economic issues facing working people: including the future of jobs, wages