In recent years, flexibility has become a part of working life for public sector employees. Since 2020, Public Service Commission Guidance (the Guidance) has provided for a flexible-by-default approach. It is guided by the principle that all roles are treated as flexible unless there is a genuine business reason for the role not to be. 

However, changes are on the horizon as the Public Service Minister Nicola Willis recently announced that the Guidance will be updated to make clear that working from home is not an entitlement and must be agreed and monitored. Crown entities (i.e., Accident Compensation Corporation, NZ Transport Agency) are not bound by the guidance but may take note of it. 

Hon Nicola Willis has asked the Public Service Commissioner to revise the Guidance and reinforce the following expectations:

1. Working from home arrangements are not an entitlement and should be by agreement between the employee and the employer.
2. Working from home arrangements should only be agreed to where they will not compromise the performance of employees and agency objectives.
3. Agencies must actively monitor the prevalence and impact of working from home agreements and be able to regularly report to the Public Service Commission about the number and nature of the agreements they have in place.

Despite the assertion that working from home is “not an entitlement,” many public sector employees are in fact entitled to flexible work arrangements, including working from home. The Guidance has been in place for four years, and in that time public sector employers have updated their policies to align to the Guidance. On the back of that, employees have made significant adjustments to their lives in reliance on those flexible working arrangements, for example, by moving further away from the CBD or making arrangements that allow them to care for dependants. Most public sector employers have also reduced desk space and so cannot accommodate all employees in the office. 

In many cases, work from home arrangements have been formally documented and agreed. Unions have been particularly successful in negotiating hybrid working arrangements to be included in the terms of collective agreements. 

Most public sector employers require formal agreement where employees are working remotely more than two days each week. There was a point where employers could have made a reasonable argument that working from home was a temporary measure flowing out of the pandemic. In our view, the time for that argument has passed. If an employee has been permitted to work from home for a certain number of days a week for an extended period of time (and the employer has reduced its office size based on the assumption that all of its employees will not be in the office every day of the week) there is certainly an argument that hybrid working or working from home a couple of days a week is now an implied term of their employment. 

Where work from home arrangements are contractual entitlements, employers require agreement from employees in order to change those arrangements. Even with changes to the Guidelines, most public sector employers will not be able to require employees working from home under an informal arrangement to return to the office immediately. Rather, a gradual transition will be required to allow those employees time to make arrangements that enable them to return to the office. 

Finally, the law remains that employees on individual employment agreements can request a variation to their working arrangements with their employer, which may include asking for a flexible working arrangement (Part 6AA of the Employment Relations Act 2000). Employers can decline such requests, but only on certain grounds, which include the negative impact on quality, performance or ability to meet customer demand. The grounds for refusing a request to work from home are relatively narrow, with little scope to refuse a request to work from home on the basis of the Finance Minister’s directions or the Guidance, let alone on the basis of the potential flow-on effects on the retail and hospitality sector. 

The updated Guidance is intended to clarify that working from home is not an inherent right. In practice, public sector employers will need to implement any changes thoughtfully, considering employees' reliance on current arrangements and circumstances in which working from home may have become an entitlement, despite there being no formal written agreement. 

This article was written with the assistance of Harriet Phillips, a Law Graduate in the Employment team.