If Australia rations fuel, will we have to WFH again?

The US–Israel attack on Iran and the subsequent regional and geopolitical conflict that has ensued have disrupted approximately 20 per cent of the global supply of oil and gas, thereby significantly increasing prices for energy, production, transport, and household expenses. Now, with increased chatter about WFH being recommended as a fuel-saving measure, Australian businesses may – for the second time this decade – see their workers undertake duties from home.

In recent days, the International Energy Agency explicitly recommended working from home (WFH) to cut fuel demand during the ongoing geopolitical conflict. Even two to three days of WFH per week, the agency said, could significantly reduce the use of petrol. Governments around the world, including Australia’s, were advised to encourage (not enforce) such actions.

Such WFH arrangements, of course, would differ significantly from those seen during the COVID-19 pandemic. While the latter saw mandatory restrictions in response to a health emergency, with the goal of stopping the spread of a virus, new directions to avoid coming into the office would be to reduce demand for energy in the face of supply and price shocks, for the purpose of saving fuel and, ultimately, stabilising the national economy.

Australia is particularly exposed in such a crisis, given how much we import fuel and how limited our reserves are. Fuel price hikes are already seeing increased costs for deliveries and groceries. Elsewhere, businesses are staring down the barrel of shrinking margins and a need to pass on costs to consumers (which will exacerbate inflationary pressure).

As of the time of writing, Prime Minister Anthony Albanese has neither announced nor hinted support for the rationing of fuel, and has appeared reluctant to do so. The federal government has spent recent days prioritising supply deals (such as the one inked with Singapore) and attempting to increase available supply by adjusting fuel standards. This all said, it remains entirely possible that rationing may loom if the conflict drags on and/or if the populace starts panic-hording.

Last week, HR Leader explored the macro environment that may well give pause to employers and their HR professionals about the longer-term impacts on the Australian job market. As that analysis noted, it is not too alarmist to presume that, should the conflict in the Middle East continue for a prolonged period, the chain reaction could well be a slowdown in global hiring, sector-based layoffs, or even recession-driven unemployment.

Such considerations may also factor into employers’ thinking about whether or not to bring back WFH arrangements for staff.

Many white-collar roles are, of course, well suited to WFH arrangements, and business leaders may well see benefit in scaling back in-office mandates to cut costs for workers’ commutes, as well as reduce office overheads.

So, taking all of this into account, what is the likelihood that businesses nationwide will reintroduce WFH for their staff?

In conversation with HR Leader, Brad Popple (partner at national law firm Kingston Reid) reflected that the complexities of navigating evolving work-from-home directions at the height of the pandemic seem a distant memory.

Nevertheless, he added, “those memories are not forgotten, and are causing many employers a degree of panic, as they read about suggestions of similar requirements as a response to the fuel crisis resulting from the Middle East conflict”.

Ultimately, Popple said, a return to WFH edicts seems highly unlikely.

“Apart from anything, there is not necessarily a straight-line connection between location of work and fuel use – many walk, cycle, or catch public transport to work. In the event that the fuel crunch escalated further, one might expect other measures such as rationing to be the first port of call as a management response,” he said.

“Of course, some employers may wish to adapt their working-from-home arrangements for a period for a variety of reasons, including supporting employees through cost-of-living pressures as petrol prices surge.”

In this case, he said, employers will do well to learn from their COVID-19-era experience, and ensure messaging is clear and consistent, including the extent to which any arrangements are a temporary reprieve with clear expectations on the end date.