Australia’s first “Right to Work from Home” to be introduced in Victoria in 2026

The Victorian Government has announced plans to introduce what it describes as Australia’s first statutory “right for employees to work from home”, granting employees a legal entitlement to work remotely for two days per week where their role can reasonably perform from home.

Whilst the legislation is yet to be drafted, the Victorian Government has confirmed several key policy positions. If introduced and passed as proposed, the reforms would represent a significant shift in workplace regulation in Victoria and would raise complex legal, constitutional questions about its legality, as well as practical issues for employers.

Overview of the Proposed Reform 

Under the proposed plan, employees whose roles can reasonably be performed remotely will have a legal right to work from home for a minimum of two days per week. The proposed right would apply across both public and private sectors and notably, would not exempt small businesses. 

The Government’s proposal intends to introduce a State-based layer of regulation on top of the existing federal framework governing flexible work arrangements. 

Should these laws pass the Victorian Parliament following their introduction (which is set for July of this year), Victoria will become the first jurisdiction in Australia to enshrine a statutory work-from-home entitlement.

No Exemption for Small Business 

Premier Jacinta Allan has publicly confirmed that small business will not be exempted from this proposed change and has said that “small business workers who can work from home will have that right protected two days per week.”  This means employers of any size would be required to comply with the new statutory right (subject to their job being able to be reasonably done remotely/from home). 

Despite this, there has been some suggestions that small businesses, with fewer than 15 employees may be given an extended timeframe to comply, potentially until July 2027. However, this has not been formally confirmed and remains uncertain.

Interaction with the Federal Industrial Relations System

The proposed Victorian reforms raise immediate questions about constitutional validity and consistency with the existing federal industrial relations framework.

Industrial relations in Victoria have been governed by the Commonwealth since 1996, following the referral of State powers and the Fair Work Act 2009 (Cth) which already establishes a comprehensive national system regulating employment conditions, including flexible working arrangements.

Section 26 of the Fair Work Act 2009 (Cth) makes clear that the Act is intended to apply to the exclusion of all State and Territory industrial laws. In addition, section 109 of the Australian Constitution states that where a State Law is inconsistent with a Commonwealth law, the Commonwealth law prevails to the extent of the inconsistency.

Against that backdrop, it remains unclear how a State based statutory entitlement to work from home could operate without conflicting with the federal scheme. Whether the Government seeks to locate the right within equal opportunity legislation or another statutory framework will be critical in assessing its legal sustainability.

Likelihood of Legal Challenge

If the legislation is passed in its current conceptual form, we expect it to be subject to constitutional challenge.

This would not be without precedent. In 2023, Victoria’s criminal wage theft regime faced constitutional challenge on the basis that it potentially conflicted with Commonwealth underpayment laws. 

Whilst the High Court ultimately did not determinate the matter, with the Victorian Wage Inspectorate ultimately dropping its 94 criminal charges against a regional restaurant business owner, the case highlights the Victorian Governments willingness to pursue workplace relations legislation notwithstanding the constitutional risk. 

Whether similar challenges arise with this new proposal to make working from home a right is very much a ‘wait and see’ exercise. ABLA will be monitoring the developments closely and will issue updates as they develop.

Existing Working From Home and Flexible Working Arrangements Laws

Regardless of the Victorian Governments proposal, employees are already entitled to request flexible working arrangements such as working from home if they meet certain eligibility criteria.

These types of requests are sometimes difficult for employers to navigate because of the multiple requirements that must be met to properly and lawfully respond.

In short, employers must be aware of the following key points:

• A written response to the request must be provided within 21 days of receiving the request; 
• This response can only be provided once the employer and employee has discussed the request and have tried to genuinely reach an agreement; 
• Consideration must be given to the impact on the employee if the request is refused; 
• There must be reasonable business grounds for refusing the request (e.g., too costly, significant loss to productivity, significant negative impact on customer service); 
• The response must inform employees of the reasons for the decision, if refused, the reasonable business grounds the employer is relying upon, how those grounds apply to the employee’s request and also advise that the employee can escalate the matter to the Fair Work Commission.

Federal Clerks Award Proceedings

In addition to the news coming out of Victoria, employers should also be cognisant that the issue of working from home is currently being considered by the Fair Work Commission, in the Working from Home – Clerks – Private Sector Award proceedings.

The test case, commenced at the initiative of the Commission, is considering whether to insert a working from home term into the Clerks – Private Sector Award, which could affect thousands of administrative workers and set a precedent for other Modern Awards.

Unions are pushing for a term which includes a presumed right to work from home if it is reasonably requested by an employee, with a 26 week notice period for ending any working from home arrangement in place. 

Conversely, Business NSW and Australian Business Industrial, represented by ABLA’s Luis Izzo, Managing Director and Tamsin Lawrence, Associate Director, on behalf of employers, have been advocating for changes to make it easier to spread out working hours without requiring penalty rates, remove minimum engagement restrictions and overhaul meal and rest break provisions.

Key Takeaways for Employers

• Victoria’s proposed new right to work represents an aggressive step towards entrenching working from home as a statutory entitlement in Victorian workplaces; 
• As it currently stands, it is unclear that this new right will actually be implemented in practice. There is uncertainty over whether the Government will entrench the right under the Equal Opportunity Act or some other legislation to bring it into operation. 
• If implemented as announced, the new right would apply to business large and small, although a delayed compliance date remains a possibility for small business employers. 
• If passed, the reform is likely to face legal challenges on the basis that it is unconstitutional and in conflict with Commonwealth legislation. 
• Importantly, working from home requests can already be made by eligible employees under the Fair Work Act via the flexible working arrangements regime. 
• At the same time, the Fair Work Commission is considering whether to introduce a working from home entitlement into the Clerks – Private Sector Award, which could have national implications beyond Victoria.
• ABLA will be watching how the Victorian Government will implement this new right for employees to work from home for two days per week. 

Should you have any concerns or questions about working from home, flexible working arrangements or any other employment law issue, please feel free to contact us at info@ablawyers.com.au or 1300 565 846.