The Flexibility Quandary: Challenges for Employers in Keeping Pace with the Modern Workplace

The environment in which work is conducted is no longer constrained by traditional notions of a workplace where certain tasks and activities are completed, between the hours of 9am and 5pm, Monday to Friday. The modern workplace is constantly changing, and employers are having to adapt in order to keep pace. More frequently than not, work is now performed in a more dispersed and flexible manner, with emphasis being placed on the delivery of outcomes rather than satisfying attendance requirements or endless performance milestones. Employers now need to consider the consequential legal ramifications for themselves and individual staff members created by these seismic shifts in the way we work.

As employers embrace innovative ways to offer greater workplace flexibility to employees such as the ability to work remotely or from home, via job-sharing, or outside the span of ordinary business hours, it is important that employers consider how best to manage productivity so as to ensure individual output is consistent across the enterprise. Whilst initiatives that promote workplace flexibility and aim to decentralize organizational rigidity can assist in attracting and acquiring talented workers, employers need to consider implications on performance and other legal risks associated with a highly flexible workplace culture, such as:

• work health and safety compliance;
• tracking attendance and output;
• controlling working hours to limit exposure to underpayment issues and compliance with Modern Award requirements;
• role and responsibility design;
• employment contract administration; and
• workplace policies that maximize flexibility without compromising productivity, compliance or service delivery to clients and customers.

The other significant by-product of a flexible workplace is managing the sense of isolation among workers who rarely interact with their other colleagues, and the lack of organizational identity and integration that may result. Employers need to find ways for employees to come together to share ideas and feel part of the organization. The ability to work flexibly may be attractive to many but can result in significant adverse consequences if not managed appropriately. In an anecdotal study recently conducted by a University in the United Kingdom, it was found that the removal of a staff canteen, where academic staff had previously congregated to eat, had significant adverse consequences for collaboration and joint academic pursuits. To this end, it is important that businesses give careful consideration to how they will encourage a dispersed and mobile workforce to collaborate, exchange ideas and generally interact, otherwise any costs savings and other benefits provided by the flexibility may be outweighed by the loss of significant value created through informal collaborative opportunities provided to employees in a traditional structure.

Performance management and generally ensuring employees are working to their full potential can pose another extreme challenge when employees are seldom in the office, or report remotely to their supervisor or manager. Employers should consider what mechanisms and structures are put in place to properly supervise employees, and how they respond in circumstances where individual performance is unsatisfactory. As is often the case, whilst opportunities for face-to-face coaching, training and counselling is significantly reduced, such interactions are no less important. In this regard, employers should ensure that they mandate for example, regular face to face meetings, whether in person or via electronic means, the ability for employees to get and provide feedback and real opportunities to communicate concerns. This necessitates the need for mechanisms to properly track and keep abreast of what employees are doing, even if the employee is working flexibly or remotely. In circumstances where there are real concerns regarding an employee’s performance, the law does not make any special accommodations for employers who have employees working flexibly or remotely. As such, employers will need to consider how they satisfy the procedural requirements in relation to proper performance management, and certainly in the case of dismissal, otherwise they face a real likelihood of being unsuccessful in defending unfair dismissal proceedings and other legal claims an employee may commence.

Further, advancements in technology and the emergence of the “gig economy” have substantially eroded the traditional model of work, as many employees have traded in permanent employment and their workstation for a hot-desk, a couch in the luxury of their home, the beach or a coffee shop. In addition, workforce models which allow employers to increase scale with relative ease via the use of large casual pools, zero hour contractors, freelancers and labour hire workers often make a strong argument in favour of costs reduction, however, invariably this means uncalculated risks for employers. To that end, the current legal framework seeks to protect workers from sham arrangements and exploitation, when these alternative models to the traditional employer-employee relationship are used to circumvent legal obligations. Care must therefore be exercised to ensure that the type of relationship used actually meets the necessary legal requirements. Apart from these issues, employers also need to give due and careful consideration to protecting their commercial interests during and following the engagement of contingent workers who, almost always, acquire valuable skills, knowledge and confidential information that has the potential to substantially damage the business if used improperly.

Although it is to be acknowledged that flexibility can have positive outcomes for employers in terms of their ability to attract and retain talented employees who want or need to access flexible work arrangements in order to achieve work life balance and their own personal life goals, which can in turn save cost and have benefits for the bottom-line, the model is not without its own set of practical and legal complexities.  It is therefore important for employers to recognize and address these issues by implementing suitable policies and procedures, workplace health and safety controls, and appropriately drafted legal instruments to protect the business, and ensure that job design is thought about prior to a particular role being filled. We recommend that employers who recruit according to a flexible working model consider and develop the following checks and balances:

• risk assessments for working remotely including undertaking occupational reviews of the employee’s workplace surroundings if necessary;
• carefully considered performance criteria and measurement protocols;
• opportunities for face to face interaction;
• spot audits and self-assessments should be conduct periodically, and at least annually;
• strategies to promote stability, unity and cohesion across the workforce;
• suitable communication systems and how often employees need to “check-in” with their manager should be carefully managed;
• the manner in which technology is permitted to be used should be clearly stated; and
• grievances handling, and conflict resolution procedures should be implemented and reviewed regularly.

Given the myriad of legal and practical issues the “uber-tech” economy has the potential to create, this article is designed to highlight some of the issues, and by necessity does not cover the entire spectrum. It is however, clear that the current legal and judicial framework lags behind the rapid changes occurring in this area, which itself has created a number of significant difficulties for employers. By way of example, this is evident under the current Modern Award system and traditional parameters around ordinary span of hours and the payment of overtime, penalty rates and the like, which do not sit comfortably with the new economy.

If the issues touched upon in this article interest you, or should you wish us to provide advice or assistance in relation to an employment or industrial law issue, please do not hesitate to contact us.

This alert is not intended to constitute, and should not be treated as, legal advice.