_{Co-authored by Lara So}

Many employers question how they can appropriately manage the productivity of employees who are working from home. Since COVID lockdowns resulted in more employees working from home than ever before, the number of businesses that undertake workplace surveillance and monitoring of their employees’ activities has dramatically increased.

In a recent decision, the Fair Work Commission (FWC) considered the issue after a longstanding employee was dismissed for misconduct on the basis of a report detailing her keyboard activity over a period of three months.

Cheikho v Insurance Australia Group Services Limited [2023] FWC 1792

Ms Suzie Cheikho (Ms Cheikho) had been employed by Insurance Australia Group Services Limited (IAG) since 2005, most recently as a consultant. Like many employers, IAG had a hybrid approach to working from home and had begun requesting employees attend the office more regularly. Ms Cheikho had chosen to remain almost permanently working from home.

Between October and December 2022, IAG conducted a review of Ms Cheikho’s cyber activity and laptop use whilst working from home. The report measured keystroke activity and showed significant periods of little to no activity. In particular, zero keyboard strokes for over 117 hours in October, 143 hours in November and 60 hours in December.

The report also disclosed that Ms Cheikho:

• failed to work her designated rostered hours 44 days out of the 49 working days reviewed;
• failed to start at 7.30am as required on 47 days out of 49 working days;
• Ms Cheikho failed to finish work at or after 4.00pm as required on 29 days out of 49 working days;
• didn’t perform any work on four days out of 49 working days; and
• had low keystroke activity on the days she was logged in which demonstrated she was not working as required.

On 20 February 2023, IAG dismissed Ms Cheikho for misconduct, alleging she had failed to work as required between October and December 2022. Ms Cheikho maintained that she couldn’t understand how or why the data showed such low working periods and raised doubts as to the report’s accuracy. She brought an application to the FWC claiming that she was unfairly dismissed and had been targeted due to recent mental health issues.

The Fair Work Commission’s findings

Was there a valid reason for dismissal?

The FWC accepted the report on cyber activity as evidence establishing significant periods where Ms Cheikho was not working as required. Crucially, Ms Cheikho was unable to provide a credible explanation regarding her non-performance or evidence to demonstrate her work for that period.

Ms Cheikho’s failure to work as required for extended periods constituted a valid reason for her dismissal. The FWC was also satisfied that she had been appropriately notified of the valid reason and was provided with an opportunity to respond. Given Ms Cheikho was dismissed for misconduct or failing to attend work, rather than poor performance, the issue of a warning wasn’t a relevant consideration.

Was the employee’s dismissal harsh, unjust or unreasonable?

The FWC considered the fact that Ms Cheikho’s dismissal caused a significant and adverse impact on her personal and economic situation and that she remained unemployed. Ms Cheikho had also given evidence of personal traumatic setbacks she had experienced during the last 18-months to two years of her employment which had a serious negative impact on her. This was supported by medical evidence demonstrating the impact of these setbacks on her mental health.

The FWC also considered Ms Cheikho’s long and satisfactory work history as a factor in her favour. However, IAG submitted that Ms Cheikho’s failure to adequately work had exposed the company to ASIC penalties and posed an ongoing risk to its clients and the public. The FWC accepted that submission and also considered the fact that Ms Cheikho may have contributed to an increased difficulty for IAG to meet its legal obligations.

The FWC acknowledged that the circumstances were regrettable given Ms Cheikho’s long history of satisfactory work. However, in consideration of all the circumstances, the FWC ultimately determined that the dismissal was not harsh, unjust or unreasonable. Ms Cheikho was not unfairly dismissed.

Key takeaways

This novel case considers the modern issue of monitoring remote work. It confirms that where employers can prove that employees aren’t working diligently or attending to their duties, they will be able to justify a dismissal for misconduct.

That said, careful consideration must be given when monitoring an employee’s activity. This includes the appropriateness of such surveillance and the employee’s privacy. If an employer chooses to rely on cyber surveillance to monitor productivity, they must implement appropriate workplace policies to guide the scope of their ability to do so, and ensure their applicable workplace surveillance policy is comprehensive and current.

As always, employers must maintain procedural fairness in any dismissal processes regarding a failure to work. This includes providing the employee with an opportunity to respond to allegations and explain their productivity in relation to their work conducted from home.

For more information on this topic or if you would like to seek advice, please contact Coleman Greig’s Employment Law team.