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Future-proofing Employment Contracts

The events of the last 18 months have caused massive disruptions to the way that work is performed. On many occasions employers have had just a few days or hours’ notice to respond to new rules about employees working from home, mask mandates, social distancing and restrictions on travel. Employees in turn have had to juggle performing work remotely with the heavy demands of home-schooling children and a less-than ideal work environment. All of these challenges sit uneasily with the traditional employment contract, modelled on an employee working set hours in an office or external workplace.

Given the impracticalities of ongoing amendments to employment contracts, how can employers future-proof their employment contracts now to align more broadly to a disruptive employment landscape?

Workplace Flexibility

The traditional employment model involves a worker performing services at their employer’s office or place of work. This model has remained surprisingly resilient even after the development of technology and devices that enabled employees to check e-mail, access documents and take office calls from anywhere. The COVID-19 pandemic and its associated lock-downs soon proved that almost any desk-based work could be performed remotely, with even medical professionals turning to virtual consultations.

It now appears that remote working is here to stay, with large proportions of workers indicating that they wish to work from home at least part of the time. In order to accommodate this, any provisions of the employment contract relating to the workplace will need to embrace flexibility. The contract should clearly state that employees may be required to work at the office or workplace, or from home or other locations, as directed by the employer.

If the employer has adopted a hybrid working model that allows employees to work flexibly, it is better to set out the requirements for this in a policy rather than the employment contract. Unlike contracts, policies can be easily amended if circumstances change, without the need for employee consent.

Remote working

Some employers may opt to do away with expensive commercial leasing costs and allow their employees complete freedom in their choice of workplace. Whilst this model is conceptually attractive, the consequences of complete freedom have to be carefully thought through. For example, employees residing in a different State or Territory from the employer may result in the employer being required to take out additional workers compensation insurance cover.

I am aware of some instances where employees working remotely have moved overseas without the knowledge of their employer. This situation can quickly create an administrative mess for the company, who may suddenly have to grapple with the difficult tax, insurance and legal issues associated with having overseas workers. Employers wishing to keep things simple should make sure to include in the employment contract any conditions on the worker’s residence – such as remaining in the same State or Territory as the employer.


The same tools that facilitate remote working can also allow employers to undertake a range of new surveillance activities. Employers can install so-called “bossware” that tracks employee activity on laptops and other devices by taking screenshots, keylogging or even accessing a device’s microphone or camera. Even the seemingly innocuous Microsoft 365 allows for the detailed measurement of individual activities such as e-mails sent, participation in group chats and who an employee is communicating with.

Leaving aside issues of employee trust and morale, surveillance of employees is permitted in Australian jurisdictions, but the employer is required to inform employees in advance about how, when and why they are going to do this. Under the Workplace Surveillance Act 2005 (NSW) for example, employers must provide advance notice to the employee of any surveillance that they plan to carry out and have a policy on computer surveillance that is provided to the employee. The employment contract should mention any kind of surveillance that the employer plans to carry out, including while the employee is working from home or other locations.

Stand downs

Until 2020, very few employees would have been acquainted with or experienced a stand down. The ability to stand down employees without pay is limited under the Fair Work Act to industrial action, breakdowns of machinery or equipment, or ‘a stoppage of work for any cause for which the employer cannot reasonably be held responsible’. The interpretation of this clause has been much debated during the pandemic, because in many cases large parts of an enterprise were unable to operate but there was not a complete stoppage of work. It has been unusual in the past for employment contracts to mention stand downs but this may be a way for employers to set out clearer rules for when and how stand downs will be used. A stand down clause could, for example, deal with the case where part of the business is affected by a lock-down but there is not a complete stoppage of work. Where the employment contract contains a provision on stand down, this can be relied on instead of the vague Fair Work Act provisions.

Elizabeth Ticehurst, Principal lawyer at Activate Workplace Law, accredited specialist in Employment and Industrial Law.

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