The big error at heart of ‘right to disconnect’ opposition

by Jim Stanford


This week, Parliament is set to approve a new set of industrial relations reforms, bundled in the second part of the “Closing Loopholes” bill.

The amended package includes a new provision to protect a worker’s ‘right to disconnect’. This measure would prevent workers from being penalised for failing to respond to unreasonable phone calls, emails, texts or other messages from employers outside of work hours.

Basic protections would be written into modern awards.

If workers are contacted too frequently, the Fair Work Commission could bar their employer from out-of-hours contact not essential to the job.

Employers could be penalised for breaching such orders, or for punishing workers who do not answer out of hours.

This provision is a partial step toward reducing the problem of unpaid out-of-hours work.

Unpaid overtime

Research indicates the average Australian worker performs 280 hours of unpaid overtime per year, equating to more than $130 billion across the labour market.

The new legislation’s ‘reasonableness’ test still grants employers great scope to contact workers out of hours when it is genuinely necessary.

Nevertheless, merely affirming that workers don’t need to be on call 24-7, and should be allowed to turn off their devices after work, has sparked loud complaints from old-school guardians of work attitudes.

Some said it’s not the “spirit with which we built our great nation”. Others lambasted Gen-Z’s for not appreciating the realities of work.

Opposition Leader Peter Dutton took a macroeconomic viewpoint, arguing the law would weaken Australia’s productivity, and vowed to repeal the provision in a future Coalition government.

But his critique revealed both questionable political judgment and flawed economic logic.

Politically, no opposition leader wants to be on the wrong side of public opinion, but that’s exactly where Mr Dutton has placed himself on this issue.

Surveys indicate a strong majority of Australians think a right to disconnect is fair: A Centre for Future Work report shows 84 per cent of employed Australians expressed support or strong support for a federally mandated right to disconnect.

Deep misunderstanding

Meanwhile, in the economic realm, Mr Dutton’s claim that protecting workers’ personal time would undermine productivity reveals a deep misunderstanding of the fundamental maths of that concept.

Economists define productivity as the amount produced in each hour of work.

It’s calculated as a ratio: The numerator (top of the ratio) is total output (measured in real terms, to strip out inflation), while the denominator (the bottom) measures how many hours it took to produce it.

The concept of productivity is often misunderstood. Many assume it means workers must tighten their belts, by working for lower wages, giving up break times, and making other painful changes to enhance the competitiveness or profitability of the business they work for.

But that’s a fundamental misunderstanding of what productivity actually measures, let alone how to improve it.

Productivity has nothing to do with how much workers are paid. It has everything to do with getting more value from each hour of their labour. And making people work for free, outside of normal work hours, actually undermines productivity – for three major reasons.

Productivity undermined

First, a right to disconnect would reduce and concentrate the number of hours workers are ‘on the job,’ to better conform with official working hours. That reduces the denominator of the productivity equation.

Disorganised bosses are bad at planning work flows; they perpetually scramble to meet last-minute deadlines. So they ask workers to stay late or work on weekends – all too often in their own homes, and usually without compensation.

Total output is no different, it is just spread inefficiently over a greater number of total hours. Even though those hours were not compensated, they were still worked. Properly measured, labour productivity falls.

Second, once they know they can’t fall back on unpaid overtime, bosses will be pushed to organise work more efficiently in order to get the most out of workers’ regular hours. They can no longer message staff on the weekend to finish an uncompleted job for free.

With better planning, output per hour during regular hours grows. On the other hand, if overtime remains ‘free’ to employers, they have no incentive to avoid it.

Third and most important, ample research shows that workers who are rested, balanced, and healthy are more productive in their jobs when they are there.

In contrast, disrupting workers’ evenings and family time adds to their stress, and undermines their mental and physical health. Productivity declines.

A proper understanding of productivity recognises that work is a valuable input, and must be treated as such: By encouraging its prudent, efficient use.

That is exactly opposite to the old-school assumptions of Mr Dutton and other boomer critics, who devalue and degrade work – to the point of assuming workers must be available to work for free, even on evenings and weekends.

That not only undermines productivity. It undermines quality of life – which, after all, is the whole point of the economy.

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