New Victorian legislation gives employees the right to work remotely two days a week

Employers trying to stop staff working from home will need to prove it has a “significant” negative impact on business or is incompatible with their role under new laws introduced to parliament.

Businesses will also need to buy equipment for workers’ home offices and could be ordered to pay compensation for unfairly denying them the right to work remotely two days a week.

The legislation establishes the right to work from home for certain employees, in what Premier Jacinta Allan says is a landmark improvement in conditions for working people.

Big business groups have blasted the laws as an unnecessary intervention, given most workplaces already allow working from home where it is practical. Some industrial relations lawyers predict an avalanche of legal disputes over what jobs can reasonably be done remotely.

A full version of the laws, released on Wednesday, spells out a strict test bosses will have to apply in deciding whether they can stop an employee from spending two days a week at home, or a pro rata equivalent for part-timers.

Workers will need to notify their employer in writing that they intend to start working from home. Employers must respond within 21 days and can only refuse or limit flexible work if it is “not reasonable”.

The “not reasonable” 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 to refuse are:

• A “significant” decrease in productivity or efficiency
• A “significant” adverse impact on supervision, training, customer service and the “capacity to build relationships” with stakeholders such as clients
• An “excessive” financial cost on the employer
• An adverse impact on any person’s safety
• That it would require the employer to make impractical changes to working arrangements or hire new staff

Employers will also have to pay “reasonable costs” for equipment so workers can do their job from home.

Workers on probation, or on apprenticeship, traineeship or graduate programs are not eligible to work from home under the laws. Casual employees will qualify if they work on a “regular and systematic basis”.

Workers will be able to take their employer to the Victorian Equal Opportunity and Human Rights Commission (VEOHRC) for conciliation over work-from-home disputes, and then to the Victorian Civil and Administrative Tribunal if not resolved.

Employees already have the right under the federal Fair Work Act to request flexible working arrangements to accommodate specific needs, such as caring for children or having a disability, and employers can only refuse on “reasonable” business grounds.

Natalie Gaspar, an employment partner at Herbert Smith Freehills Kramer, said the Victorian laws 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 that language – significant adverse impact, significant decrease in productivity – is deliberate. It demonstrates the intention to set the bar really high,” Gaspar said.

“If there is some productivity decrease, if there is some impact on customer relationships or productivity, that is not a basis [for refusal]. That must be ‘significant’. That’s quite an important and stark point.”

However, Gaspar said workers and employers would still disagree over what constituted a “significant” impact, and many of these disputes would end up in VCAT.

“There will be some helpful guidance for employers that will come out of the early cases dealing with this, but it is a brave new world,” she said.

Gaspar said VCAT could ultimately order an employer who had unreasonably refused working from home rights to pay compensation to workers for transport costs or other expenses incurred coming into their workplace every day.

Ahead of the November state election, the working from home laws are a centrepiece of Allan’s pitch to working Victorians straining under the skyrocketing cost-of-living and being tempted by the right-wing populism of One Nation.

The government claims families can save time and up to $5000 a year in transport costs by working from home two days a week, but that some employers are unreasonably refusing flexible work.

While VEOHRC and VCAT are already struggling to clear their existing case loads, Holding Redlich workplace partner Charles Power said that under the legislation, workers could seek interim orders from the tribunal permitting them to work from home while the matter is resolved.

That, along with the fact that there is no cost to launch action in VCAT, could make it easier for workers to challenge their bosses’ decisions than it is under existing workplace laws.

“The VCAT workload is set for an increase,” Power said.

The Coalition has not indicated if it will support the laws, which will be debated when Parliament returns from its winter break in late July.

If passed, they would come into effect on September 1, however businesses with fewer than 15 employees will have until July 2027 to comply.

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