I recently appeared on Ticker News to talk about one of the most significant shifts in Australian employment law in years — the new working from home legislation. But the conversation I wanted to have was not just about the law. It was about everything the law assumes your business already has in place.
Because here is the truth: most businesses do not.
What Is Actually Changing
Let’s start with the facts, because there is a lot of noise out there.
From 1 September 2026, Victorian employees who can reasonably perform their role from home will have a statutory right to work from home for at least two days per week. This right is being enshrined in the Equal Opportunity Act 2010, making Victoria the first jurisdiction in the world to legislate WFH as a protected entitlement.
If your business has fewer than 15 employees, you have a little more time. The law applies to you from 1 July 2027. But do not let that lull you into inaction.
Disputes will not go to the Fair Work Commission. They will go to the Victorian Equal Opportunity and Human Rights Commission (VEOHRC) for conciliation first, and then to VCAT if unresolved. That is a different process, a different regulator, and a different compliance framework than most employers are used to.
And here is what many Victorian businesses are missing: this sits on top of your existing federal obligations. Section 65 of the Fair Work Act 2009 already gives eligible employees the right to request flexible working arrangements, and since 2023, the Fair Work Commission has had the power to arbitrate when employers refuse. That means you are operating under two frameworks simultaneously, and non-compliance with either carries real risk.
The Case Nobody Is Talking About
While everyone has been focused on the Victorian legislation, there is a live proceeding at the Fair Work Commission that could have even broader national implications.
The case initiated by the FWC on its own motion is examining whether a working from home term should be inserted into the Clerks – Private Sector Award 2020. The Australian Services Union is seeking a presumed right to work from home when reasonably requested. Not a right to ask. A presumed right. That is a fundamental shift in where the burden of justification sits.
Currently, employees need to justify why they should be allowed to work from home. Under the proposed model, employers would need to justify why they cannot accommodate it. The proposed clause also includes a minimum of two WFH days per week and a 26-week notice period for any employer wanting to mandate a return to office.
If this gets up, it affects approximately 1.8 million workers covered by the Clerks Award, and legal experts have been clear that it could set a precedent flowing into other modern awards.
Final hearings ran through February 2026. A determination is expected soon.
The question is not whether this will affect your business. The question is: are you ready if it does?
The Real Problem Nobody Is Naming
Here is what I said on Ticker News, and I will say it again here: the legislation answers the question of whether people can work from home. It does not answer the much harder question — whether your managers know how to lead them fairly when they do.
Most leadership capability in Australian business was built for in-person, visibility-based management. You could see who was working hard. You could catch issues in the hallway. Performance conversations happened naturally. That model does not translate to hybrid, and the gap is bigger than most businesses realise.
When managers cannot rely on visibility, they default to instinct. And instinct, in a hybrid environment, is often legally risky.
Proximity Bias: The Hidden Hazard in Your Hybrid Model
There is a specific risk I want to name, because it is real, it is measurable, and almost no businesses are talking about it: proximity bias.
Research consistently shows that employees who are in the office more are perceived as harder working, more committed, and more promotable, regardless of their actual output.
It is not deliberate discrimination. It is a deeply human cognitive bias. But in a hybrid workforce, it creates a two-tiered workplace where remote workers are systematically disadvantaged in performance reviews, promotion decisions, and workload allocation.
Under Australia’s psychosocial hazard frameworks, exclusion and inequitable treatment are recognised risks that employers have a duty to manage. Proximity bias does not just damage your culture — it creates legal exposure.
If your hybrid model is quietly favouring in-office workers without your leaders even realising it, you have a problem. And now, with legislation in place to support hybrid work, that problem has teeth.
A Policy Is Not a Strategy
I want to be direct about something. Most businesses will respond to this legislation by updating a policy document. And while that is a necessary starting point, it is not enough.
A policy that says “employees may work from home two days per week” does nothing to address:
- How performance will be fairly measured across different locations
- How managers will communicate inclusively, rather than defaulting to ad hoc hallway conversations that exclude remote workers
- How team culture is maintained when people are dispersed across home and office
- How you will handle a psychosocial complaint from a remote worker who feels excluded or overlooked
The businesses that will struggle with this legislation are the ones that treat compliance as a document exercise. The ones that will get it right are the ones that treat hybrid work as a people strategy question.
What Employers Need to Do Right Now
Whether you are in Victoria or operating nationally, here is the practical reality of what needs to happen before this law takes effect.
1. Know Your Obligations — All of Them
Victorian employers need to understand both the state framework and the federal Fair Work Act. If you operate across multiple states, your employees may have different entitlements depending on where they are based. That complexity needs to be managed proactively, not reactively.
2. Document Everything
The Fair Work Commission has been clear: employers can refuse WFH requests, but only with genuine, written business grounds and within the required 21-day response timeframe. Verbal decisions, informal conversations, and undocumented reasoning are the decisions that end up going against employers.
3. Update Both Your Employment Agreements and Your Policies
Most businesses focus on one and neglect the other. Your employment agreements need to reflect your current hybrid arrangements. Misalignment between what your contracts say and how your workplace actually operates is a compliance risk, and one of the most common gaps I find in HR audits.
4. Build Real Leader Capability
Not a one-hour webinar. Not a policy to sign off on. Actual training in how to manage performance remotely, how to run inclusive hybrid team meetings, and how to identify and counteract proximity bias in their own decision-making.
5. The Deadline Is Not September. The Deadline Is Now.
Getting your policies right, updating your employment agreements, and building leader capability takes time. If you wait until August to start, you will not be ready.
The Shift That Changes Everything
The law is moving — and it is moving in one clear direction.
From “you need permission to work from home” to “you need a reason to make someone come in.”
That is a fundamental shift in where the burden of justification sits. And most Australian businesses have not noticed yet.
We are in a moment where employment law is ahead of leadership capability in most workplaces. That gap, between what the law now expects and what most managers are equipped to do, is where the risk lives. It is also where the opportunity lives, for the businesses willing to move first.
To discuss your hybrid work arrangements and what you need to have in place before September 2026, visit bluekite.au or connect with Catie on LinkedIn.
This article is intended as general information only and does not constitute legal advice. For advice specific to your business and workforce, seek guidance from a qualified HR or employment law professional.
About the Author
Catie Paterson is the founder of Blue Kite HR Consulting, with over 20 years of experience supporting Australian businesses to build better, legally compliant workplaces. She provides practical, no-nonsense HR support across workplace compliance, employment matters, people management and leadership capability. Catie helps business owners and managers make confident decisions, reduce people-related risk, and create workplaces that work better for both employers and employees. To contact Catiee, click here