In this Justitia communication, we continue our round-up of recent cases, sharing key developments and cautionary lessons to help your organisation navigate staffing matters with clarity and confidence. Today we focus on flexible work.

WFH arrangements – a continuing challenge in some workplaces

Employers need to remain vigilant as they manage work from home requests to avoid the costs and time involved in litigation.

A right to work from home two days a week has been proposed by the Victorian State Government, to be effective from 1 September 2026. Small businesses will apparently have until 1 July 2027 to comply. It is proposed that disputes can be brought to the Victorian Equal Opportunity and Human Rights Commission and then the Victorian Civil and Administrative Tribunal if not resolved. It will be a case of ‘watch this space’ in terms of how the new right will operate and who it will cover.

The Fair Work Commission (the Commission) is also currently considering the development of a working from home term in the Clerks – Private Sector Award 2020 which facilitates employers and employees making arrangements for working at home and removes any existing award impediments to such arrangements. Proceedings are still underway and it’s not certain what that term will look like. This is in response to strong union advocacy and will potentially affect many workplaces, depending on what is finally determined.

Disputes about work from home arrangements can already be brought to the Commission for those eligible to make a request for flexible working arrangements under the Fair Work Act 2009 (such as employees who are pregnant, have a disability, or are a parent of school children who are school aged or younger).

In 2024-25, the Commission received 289 applications regarding flexible working arrangements. 95% of these were resolved or discontinued without arbitration.

In a labour law conference last year, Commissioner Sharon Durham observed that:

  • Often the employer had not explained how the business grounds related to the refusal of the request, and that they hadn’t considered other options.
  • In some instances, parties agreed to implement the changed working arrangements as a trial, typically for a period of 6 months and agreed to meet again prior to the end of the trial.
  • Those who agreed to the trial arrangement did not return to the Commission saying it was not working.

In another example of a work from home dispute, an employee claimed he had a right to work from home full time under his contract.

The employee was dismissed for persistently refusing to follow his employer’s direction to comply with the company’s hybrid work policy of three days in the office each week.

The Commission agreed the direction was lawful and reasonable, finding that:

  • Whilst the employee’s contract stated that he was ‘permitted’ to work from his personal residence, the employee was mistaken in his belief that he had an unconditional right to do so.
  • The permission to continue working from home was subject to any changes to company policy and the employee was required to comply with policies.
  • The contract also made it clear that the employer reserved the right to require the employee to work from other locations from time to time.
  • The direction to return to the office was not unreasonable having regard to the consultation with staff in developing the hybrid work policy, the staged steps it took to transition to the new working arrangements and the numerous occasions that the employer explained its position to the employee.

Failure to comply with this employer’s lawful and reasonable direction therefore was found to be a valid reason for his dismissal.

Key takeaways

Here are some practical steps employers may take to minimise risks of a disputes about work from home arrangements.

  • Be clear on contractual language about remote working – consider framing it as conditional and policy-dependent rather than as a contractual entitlement. Avoid ambiguous language that might be interpreted as a fixed entitlement if your aim is to retain flexibility.
  • If considering changes to a hybrid work policy, consider consulting with staff beforehand, and what transitional arrangements might look like – this may increase the reasonableness of any direction to comply with the policy.
  • Consider the option of trialling a proposed work from home arrangement.
  • Where there is non-compliance with a direction to return to the office, be sure to seek advice before dismissing an employee on that basis, as each case will be considered on its own unique set of circumstances.

Case: Richard Johnson v PaperCut Software Pty Ltd [2026] FWC 178