Colin’s Corner

Working From Home – Part 2

By Colin Toll

In an earlier Previews article, I presented an edited version of the Productivity Commissions report of working from home, its positives, negatives and implementation.  This article is a further edited version of that report dealing with issues such as employee wellbeing, WHS and the impact on the CBDs of our cities.

The WFH issue has very recently come to the fore due to the decision by the Commonwealth Public Service to allow employees to decide for themselves where they choose to work.  In addition, a very recent article in the Murdoch media by David Penberthy titled “Bludging at home risks losing our jobs” raised the issue of Australia being perceived in Asia as lazy. He argues that WFH in Australia is “not based around what’s best for our jobs, our employers and our economy but what is best for our lifestyle.

Now to the edited productivity Commission report.

How will working from home affect our wellbeing?

Working from home can affect various aspects of wellbeing, including physical and mental health, work–life balance, and family functioning. It may also open up work opportunities for people who face barriers to labour force participation or full‑time employment, such as people with disabilities or caring responsibilities.

Working from home can improve physical and mental health by giving people more time and control over their day — to sleep, exercise and cook nutritious food, for example. But it can also worsen physical and mental health due to decreased incidental exercise, increased isolation, and the elimination of the boundaries between home and work life.

Working from home can improve employment opportunities.

Avoiding the commute reduces the ‘cost’ of working, and this is expected to induce an increase in labour supply. This may include more work opportunities for people who face barriers to labour force participation. This includes carers, parents of young children, some people with disabilities, as well as people living in remote or regional areas where there are often fewer job opportunities in close physical proximity. Working from home policies can also promote a more gender‑balanced workforce.

Should governments care about the increase in working from home?

Working from home represents a potential overall gain to society, and there is a strong case to allow workers and firms to negotiate mutually beneficial outcomes. This negotiation will happen largely at the individual (contracts) or firm level (workplace policies), and outside the formal workplace relations system.

Workplace health and safety.

Australia’s work health and safety (WHS) system is set up well to handle more widespread working from home. Australia’s WHS laws are relatively broad and principle‑based. WHS is the joint responsibility of employers and workers, and this responsibility applies wherever work is carried out, including in the home.

But working from home creates more complexity for managing WHS risks, in that the employer has less visibility and control of the working environment. This may raise the perceived costs of working from home to the employer. Much will depend on the evolution of case law on what is ‘reasonably practical’ when working from home.

The impact on central business districts (CBDs).

Working from home is largely CBD‑centric. The ‘knowledge’ jobs amenable to working from home are currently concentrated in the CBDs of our biggest cities. And the people who work in those jobs tend to live in the inner and middle suburbs.

As more people work from home and avoid commuting into the CBD, some economic activity (such as demand for retail, hospitality and personal services) is expected to shift from the CBDs to the suburbs. And demand for office space could decline, as some firms look to downsize or relinquish their offices. This has prompted some to call for workers to go back to the office, to ‘save the CBDs’.

Will working from home solve our congestion problems?

Congestion is a substantial cost — in terms of time, money and pollution — in our populous cities. Unfortunately, increased working from home is unlikely to be the panacea to our congestion problems, at least in the short term.

Policy should support the transition to working from home.

The shift to working from home caused by the pandemic is a large and material change in the way many people work. Even if half of the people who could work remotely do so an average of two days per week, overall hours worked from home would increase from a pre‑pandemic level of just under 2% of all work hours to just under 7%. This is a large change that has happened very quickly but should be kept in perspective. The central workplace will remain the dominant model for the foreseeable future. But the increase in working from home is potentially of great benefit to a substantial portion of the Australian workforce.