Work-from-home is for employers only to decide

Should business owners lose the right to determine where their staff should work? It’s a radical notion, but it’s being proposed by the Victorian government.

Employers have always had the right to say where their staff should be sited, but the proposal is to take away this foundational right and force employers to accept two days of work-from-home for employees who want it. Lest governments in other jurisdictions are tempted to go down this path, let’s be more specific about the flaws in this proposal.

The key point is to allow individual firms the choice of whether to have work-from-home or work-from-work arrangements, or indeed some sort of hybrid arrangement.Credit: Getty

I’ll start by explaining how businesses maximise productivity regarding work arrangements and what we stand to lose. The critical element is that each employer has the right to set those work arrangements themselves. Having this choice allows employers to decide on work-from-home arrangements that work best for the business, depending on their individual circumstances.

A travel agent in town A, for example, might have lots of work-from-home employees, and that works for them for the type of staff they’re looking for and, as a result, they enjoy high productivity levels. That’s great.

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On the other hand, a consulting firm in town B might insist all staff be on deck to foster teamwork and camaraderie, which result in high productivity. That’s also great.

The key point here is to allow individual firms the choice of whether to have work-from-home or work-from-work arrangements, or indeed some sort of hybrid arrangement.

Allowing that choice allows the town A as well as the town B business to thrive. Denying that choice would – by definition – cause one of those businesses to suffer a productivity hit. The importance of allowing individual businesses to choose is critical not only to the success of millions of businesses across the country, but also to the national economy.

Some people make the mistake of making sweeping generalisations about what level of work-from-home is best for Australian businesses, but these one-size-fits-all proposals fail to account for what works best for each enterprise. They come in all shapes and sizes, with all sorts of business models, meeting all sorts of customer needs, and that is as it should be in a modern, dynamic economy.

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To ensure we maximise productivity, it is imperative that employers have the right to set their workplace arrangements as they see fit. You won’t see a dynamic business sector if their key management decisions are taken from them.

The economic damage from removing the employer’s “final say” on work-from-home goes beyond workplace inefficiency because it represents a loss of managerial prerogative for the owner and a subsequent deterrent for investment.

Why would anyone invest in a business if they are losing control over key decisions? The loss of the ability to make core decisions represents a direct loss of value in that asset. Businesses need the autonomy and ability to make business decisions, and policymakers need to accept that their proposals to deny businesses the ability to site staff where they see fit will have a damaging impact on those businesses.

Taking control of businesses away from employers might seem harmless enough at first glance, but it represents an overall drag on the economy through lower productivity, lower investment, fewer jobs and lower incomes.

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It’s well known that the Australian economy has been developing a serious productivity malaise, with measured productivity at six-decade lows, and it should be obvious that changes like this will only exacerbate the problem.

If we want the private sector to re-energise the Australian economy, we need to recognise that business people require control of their businesses.

The simple and time-honoured answer is to let the employer decide whether a work position should be undertaken on premises or not. If someone wants to set up a business with workers based on-site, let them. If they want to set up a business with everyone working from home, let them. If they want a hybrid, let them.

It’s not for outsiders to interfere with these choices. It’s not for government to take these critical rights away from employers. For the best-performing economy, let businesses be free to choose.

David Alexander is chief of policy and advocacy at the Australian Chamber of Commerce and Industry.

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