With the introduction of the national employment standards in 2009, an increasing number of employees are requesting flexible working arrangements, and in particular, the option of working from home or “telecommuting”. While the option of working from home has the potential to deliver benefits to both employees and employers, it can also expose employers to various legal risks that should be carefully considered by employers. However, like any working arrangement, such risks can be managed effectively, and to some extent minimized, by implementing policies and having proper protocols in place.

Requests to work from home

Section 65 of the Fair Work Act 2009 (“the FWA”) allows an employee who is a parent or who cares for a child to request a change in working arrangements where the child is under school age.

However, an employer may refuse the request on “reasonable business grounds”. Furthermore, an employee may only request to work from home if they have served a minimum period of 12 months of employment service. The FWA does not define “reasonable business grounds”, however a number of factors may be considered, including:

• whether the work is required to be carried out “on-site”;
• the effect that the arrangement may have on the employer’s business;
• the impracticality and expense of implementing such an arrangement.

Employers should also be mindful of their obligations under anti-discriminatory laws when considering requests to work from home.

Definition of “workplace”

A workplace is broadly defined and generally includes any place that an employee goes, or is likely to go to while at work. The definition of a workplace has implications for employers that agree to allow their employees to work from home.

Injuries arising out of, or in the course of, employment

If an employee were to sustain an injury while working at home, the relevant test would be whether the injury sustained “arose out of, or in the course of, the employee’s employment”.

This issue was highlighted in the recent case of Hargreaves v Telstra Corporation Limited [2011] AATA 417. In that case, the employer and employee had come to an “informal” arrangement whereby the employee was able to work two days per week from home. The employee sustained injuries after falling down the stairs of her home on two separate occasions. The employee was successful in suing her employer for compensation.

In relation to the first fall, the employee went down the stairs to retrieve some cough medicine. It was held that the injury sustained from the first fall arose out of the course of the employee’s employment, because the actions in going down the stairs to seek relief from coughing constituted a need for an absence from her workstation for “necessities of nature” similar to a toilet break, meal break or smoking break. Accordingly, much like any other place of employment, a worker that takes a recess at home and sustains an injury may be able to make a workers compensation claim. Although the incident occurred after standard business hours, the Tribunal accepted that the employee regularly worked late.

In relation to the second fall, the employee went down the stairs to lock her security door after her son left for school, and she fell in the process. After a recent burglary at the employee’s home, the employer had instructed the employee to keep the screen door locked at all times during the day when she was working from home. This instruction constituted a reasonable direction from her employer and it was held that this requirement had become part of her obligation or an incident of her employment. The action clearly fell within the scope of her employment.

Can employees “waive” their rights to compensation?

While there may be workers who are prepared to forego their right to be compensated for injuries sustained while working at home, rights prescribed by statute cannot simply be ousted by an agreement, waiver or letter of consent, and will prevail over any agreement that purports to do so.

Section 82 of the Accident Compensation Act 1985 (“the ACA”) provides that where an employee sustains an injury “arising out of or in the course of their employment”, they shall be entitled to compensation. Accordingly, this applies to employees working from home.

Section 97(4) of the ACA provides that compensation under the ACA is “absolutely inalienable” by consequence of any legal process or operation of law of any other means. Accordingly, even where an employee unequivocally agrees or consents to sign a letter or agreement that limits an employer’s liability, such letter or agreement is void.

The strict enforcement of employees’ rights to workers compensation reflects Parliament’s recognition of the inequality in bargaining power between employers and employees.

What should employers do to protect themselves?

Despite the risks, working from home can present a mutually beneficial option for both parties. It allows employers to retain their employees, while providing parents and carers with work-life balance and flexibility, which makes for happier employees and often increased productivity.

Employers should assess the risks associated with allowing an employee to work from home. Each workplace will be different, and therefore should be assessed on a case-by-case basis. The most effective way to do this would be to arrange for an inspection and conduct a risk-assessment. Once risks are identified, the employer should take steps to eliminate or minimize those risks. Employers should also ensure that they have proper policies in place, and ensure that their employees receive proper training to enable them to assess new risks as they arise and deal with them.

This article is intended to provide general information only and is not a substitute for legal advice. To obtain legal advice tailored to your situation please contact Rudstein Kron Lawyers.