New Victorian legislation gives employees the right to work remotely two days a week
Employers trying to stop staff from working from home will need to prove it has a “significant” negative impact on the business or is incompatible with their role under new laws tabled in parliament.
Businesses will also be required to purchase equipment for workers’ home offices and could be required to pay them compensation for wrongfully denying them the right to work remotely two days a week.
The legislation establishes the right to work from home for certain employees and what Prime Minister Jacinta Allan says is a groundbreaking improvement in conditions for working people.
Major business groups have criticized the laws as an unnecessary intervention, given that most workplaces already allow working from home as long as it is practical. Some industrial relations lawyers predict an avalanche of legal disputes over which jobs can reasonably be done remotely.
The full version of the laws published on Wednesday outlines a strict test bosses will have to apply when deciding whether they can stop an employee from spending two days a week at home, or a proportionate equivalent for part-time workers.
Workers will need to notify their employers in writing that they want to start working from home. Employers must respond within 21 days and can only refuse or limit flexible working if it is “unreasonable”.
The “unreasonable” decision must be based on specific considerations, including the “inherent requirements” of the role, such as access to equipment or face-to-face interaction with customers.
Other grounds for rejection include:
- A “significant” decrease in productivity or efficiency
- “Significant” negative impact on auditing, training, customer service and “capacity to engage” with stakeholders such as customers
- An “excessive” financial cost to the employer
- Adverse impact on the safety of any person
- Requires the employer to make impractical changes to working arrangements or recruit new staff
Employers will also be required to pay “reasonable costs” for equipment so workers can do their jobs from home.
Workers on probation or in apprenticeships, internships or graduate programs are not eligible to work from home by law. Temporary workers will be eligible if they work “in a regular and systematic manner.”
Workers will be able to take their employers to the Victorian Equal Opportunity and Human Rights Commission (VEOHRC) to reconcile work-from-home disputes and, if unresolved, to the Victorian Civil and Administrative Tribunal.
Employees already have the right under the federal Fair Work Act to request flexible working arrangements to meet certain needs, such as caring for children or being disabled, and employers can only refuse on “reasonable” business grounds.
Natalie Gaspar, business partner at Herbert Smith Freehills Kramer, said Victorian law had significantly strengthened workers’ ability to secure work-from-home arrangements by making it a default right and setting a high bar for employers to refuse it.
“The use of this language (serious adverse impact, significant reduction in productivity) is intentional. It shows an intention to set the bar really high,” Gaspar said.
“If there is a reduction in efficiency, an impact on customer relations or productivity, that is not a baseline. [for refusal]. This must be ‘important’. “This is a very important and sharp point.”
But Gaspar said workers and employers were still unable to agree on what constituted a “significant” impact and many of these disputes would result in VCAT.
“There will be some useful guidance for employers from the first cases of this, but this is a brave new world,” he said.
Gaspar said VCAT could order an employer who unreasonably refuses to work from home rights to compensate workers for transport costs or other expenses they incur to get to their workplace each day.
Work-from-home laws ahead of the November state election are the centerpiece of Allan’s pitch to working Victorians struggling under the skyrocketing cost of living and tempted by the right-wing populism of One Nation.
The government claims families can save up to $5,000 a year in time and transport costs by working from home two days a week, but some employers unreasonably reject flexible working.
While VEOHRC and VCAT are already trying to clear their existing caseloads, Holding Redlich workplace partner Charles Power said under the legislation workers could seek interim orders from the court allowing them to work from home until the issue is resolved.
This, together with the fact that it costs nothing to take action at VCAT, could make it easier for workers to challenge their boss’s decisions than under current workplace laws.
“VCAT workload is predicted to increase,” Power said.
The coalition has not said whether it will support the legislation, which will be debated when Parliament returns from winter recess in late July.
If passed, these rules would go into effect on September 1, but businesses with fewer than 15 employees would have until July 2027 to comply with the law.
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Patrick Hatch is a transport correspondent for The Age and a former business correspondent.Connect with: X or email.
