The lockdowns due to COVID-19 pandemic are continuously forcing employers and employees to experiment working from home. The Productivity Commission (PC) released its major report on “Working from home” on 16 September 2021 and found that working from home just one day a week saves the equivalent of seven working days in travel time and $394 in public transport costs over a year.  

As productivity hasn’t decreased, working from home is a good innovation from this pandemic.

In fact, working from home is not new in the industrial relations history of the world. Prior to the Industrial Revolution, most people worked from home in agriculture and as skilled artisans in their enterprises of textiles, painted ceramics and leather goods. The rise of the factory system and then invent of offices led the historic shift from home to central workplace. This was supported by affordable cost of travel for work via public transport system.

In 2019, around 8% of Australian employees had a formal work from home arrangement with their employers. According to the census in 2016, only 5% of employees worked from home instead of commuting to workplace on the Census Day. Although the technology allowing many people to work from home has been available, the rate of take up was very low prior to the pandemic of Covid-19.

The PC report found that approximately 40% of Australian employees are working from home in the past two years. This phenomenon is expected to continue even after the pandemic ends. In the future, many more employees and employers are expected to negotiate working from home arrangements and some people might even take a pay cut to remain in their home offices due to savings in travel time and transport cost. Employers are likely to allow employees to split their time between office and home under the, now dubbed, hybrid model.

The downsides of working from home are found to include a worsening physical and mental health due to less incidental exercise, increased isolation and having no boundaries between home and work life. This could result in deteriorating social well-being and hence, requiring greater resources from government coffers.

Working from home is not for everyone in the community. Census data from 2016 shows that around 35% of workers had jobs that were amenable to working from home. These jobs would involve office-based employees such as managers, professionals and administrative officers, where employees use computers, interact less with the public, do not perform outdoor work or physical activity, and do not work with immovable structures, materials or equipment. Working from home mostly suits full-time employees with higher education and income.

Most Australian employees want to work from home, at least some of the time. The PC found approximately 75% of employees consider that they were at least as productive working from home as from the office. The primary benefit is to avoid daily commute to work. In Sydney, the mean commute per day is almost 75 minutes while in Melbourne it is almost 70 minutes. On the contrary, there are actual or perceived costs to working from home, including reduced opportunities for team-work, networking, face to face interaction and possible consequences for long-term career prospects.

Employers are largely concerned with the actual or perceived productivity and costs of working from home. These possibly comprise of an increase in co-ordination costs, reduction in serendipitous interactions and knowledge-sharing. Companies may be able to realise office rent savings, although they may have been locked into long-term leases and reluctant to relinquish office space in this intertemporal situation.

The Australian Work Health and Safety (WH&S) system is relevant in working from home. This system is designed to protect the health, safety and welfare of all workers and others in relation to workplaces and work activities. The WH&S laws are relatively broad and principle-based which are a joint responsibility of employers and employees. This responsibility applies wherever work is carried out, including in the home.

The community stands to potentially achieve overall gains in working from home. Hence, there is a strong case to allow employees and employers to negotiate mutually beneficial outcomes through individual contracts and agency agreements. It is therefore appropriate for the government to continuously monitor labour market and regulatory settings to ensure the safety and protection of employees and employers.