CAN EMPLOYERS ORDER THEIR EMPLOYEES BACK TO OFFICE?

Posted by Tony Sung in News

One of the major impacts of COVID-19 on workplaces was the dramatic increase in the number of employees working remotely, mainly from their homes. Although working from home comes with many benefits, such as no commute time and the ability to be flexible with work hours and the care of children, it can also come with several drawbacks including disproportionate work-life balance and increased isolation. In fact, unless steps are taken to address the isolation issue, workers can be left feeling disconnected from the workplace which can negatively impact their mental health.

 

As UN World Health Organization (WHO) has declared an end to COVID-19 as a public health emergency, many employers are considering transitioning staff back to the workplace. This is illustrated by Prime Minister Christopher Luxon recently ordering public servants back to the office and made it clear that working from home is not an entitlement. The concern was mostly driven by the fact that businesses were suffering due to workers not being present in the CBD.

Recent cases indicate that if an employer has substantive justification for ordering their employee back to the office and follows the correct process, it is unlikely for the Employment Relations Authority to rule in favour of the employee, even if the validity of the employer’s concerns may be questioned.

XLL v EGA [2024] NZERA 293

In XLL v EGA [2024] NZERA 293, XLL contended that XLL was constructively dismissed because of workplace health and safety concerns relating to EGA’s handling of sexual harassment issues. One of the matters raised was that EGA’s requirement for XLL to return to work in the office rather than continuing work from home, was cited as an action that led to constructive dismissal.

XLL argued that they were not required to attend the office for most of their employment and instead had worked from home. XLL argued that they were not an “office-based employee” and that there was no solid foundation for EGA to direct them to work from the office.

In response, EGA agreed that XLL had worked predominantly from home but said that was due to COVID-19 lockdowns and had not intended for the arrangement to be permanent. EGA also provided evidence that the reason the company wanted XLL to work from the office was because XLL had taken a lot of unplanned leave and there were also concerns about performance, including XLL’s CSAT (customer satisfaction score) scores. Further, EGA said it had a meeting with XLL where it consulted with them and discussed the proposal to return to work.

The Employment Relations Authority (ERA) accepted that EGA had some concerns about the attendance and performance of XLL. Although the Authority acknowledged that the validity of those concerns may be questioned, it accepted that EGA’s views were genuinely held and that there was no underlying or improper basis for the company’s actions.

In the circumstances, the Authority was not satisfied that EGA’s actions were untoward in any way. The Authority held that EGA had a solid foundation for requiring XLL to work in the office, given it being the location of XLL’s workplace as specified in XLL’s employment agreement.

Overseas cases

In the United Kingdom, the equivalent of the ERA is seeing an increase in cases being brought by employees who are being told to return to work. In Miss Wilson v Financial Conduct Authority: 2302739/2023 the UK tribunal rejected the claim of a Senior Manager who had been employed since 2005. Her contract indicated the workplace was her physical place of work, however, in 2020 an agreement was reached that she could work from home for health reasons. Shortly after, lockdown measures were put in place. Once the lockdowns were over, employees were asked to work 40% in the office and 60% at home, while Senior Managers like Miss Wilson were expected to work 50/50 between home and the workplace. Miss Wilson made a request to work 100% from home.

The Tribunal considered that, providing there was critical thought into the reasons for refusal, they were justified in not permitting her to work from home. A blanket restriction on working from home is not justified, but each case should be considered on its merits. It was recognised that remote working has its weaknesses and technology is not a substitute for exchanges that occur during meetings or training events. In addition, it was recognised that there is limited ability to observe and respond to non-verbal communication, which is particularly important when considering the role of Senior Managers.

Lessons learned from the Cases

However, it is not that simple; an employer who is considering ordering their employee back to the office needs to check as a first step whether the employee’s employment agreement has a clause regarding place of work. It will be very difficult for the employer to call the employee back to the office if the place of work clause in the employment agreement specifies both the company address and the employee’s home address as places of work. It is also problematic if the role was advertised as a hybrid role with the flexibility to work from home.

If the place of work clause only specifies the company address and there is no clause expressly allowing the employee to work from the employee’s home address, the employer then needs to check whether the company has any policy regarding working from home and whether the contract was varied by mutual agreement.

In addition, we also consider that if the employee is working from home with consent from the employer, the employer needs to check whether the working from home arrangement was allowed on a temporary or permanent basis. Silence regarding the duration of the working from home arrangement is likely to be interpreted as a permanent arrangement.

In those circumstances, the employer has created an expectation that the role can be done remotely. If they wish to revoke working from home, they must consult with the employee and reach an agreement. This is required as part of acting in good faith.

Ordering an employee back to the office needs careful consideration. The employer needs to have a substantive justification for ordering the employee back to the office and follow a reasonable process, including giving the employee an opportunity to provide feedback on the proposal. Examples of substantive justification are negative impact on quality, negative impact on performance, and negative effect on the ability to meet customer demand.

Although it is possible for employers to order their employees back to the office, it is still important to have objective evidence supporting the employers’ operational needs before doing so. If you are considering recalling employees back to the office, seek advice and ensure that you are justified in doing so. Also make sure that there is the appropriate notice and consultation with employees.

If you would like more information regarding the above or have any questions, please contact us.

DeAnne Brabant | Partner | deanne.brabant@shieffangland.co.nz

Tony Sung | Senior Associate | Tony.Sung@shieffangland.co.nz