Australian employers, here’s a crucial reminder: having a work-from-home clause in your employment contracts is not a get-out-of-jail-free card. A recent Fair Work Commission decision is a must-read for anyone who thought a well-written contract would cover them in case an employee insisted on working from home.

The Case

An employee whose contract said he was “permitted to work from home in line with relevant company policy” refused to attend the workplace when his employer brought in a new hybrid working model. His argument was that his contract entitled him to continue working from home.
The employer made it clear on several occasions that the employee was required to work in the office three days a week in accordance with the new policy, and eventually terminated his employment for failing to comply with a lawful and reasonable direction. The employee brought an unfair dismissal claim, arguing he’d been unfairly dismissed for exercising a workplace right conferred by his contract.

The Decision

The FWC ultimately decided the dismissal had been fair, but the decision contains some important messages for employers about when a work-from-home clause might be relied upon.
In this case, the contract stated the employee was permitted to work from home “in line with relevant company policy”. This meant the arrangement was conditional on company policy, rather than being absolute. The FWC found there was nothing in the contract to suggest the employer had agreed the employee could work from home in circumstances where the employer did not wish him to do so.

Why You Need to Care

This decision is a timely reminder that a work-from-home clause is not a substitute for a properly implemented policy and procedure. It also highlights the importance of careful drafting to ensure flexible work clauses facilitate your operational needs, rather than creating rigid entitlements.

Drafting Flexible Work Clauses

Most employment contracts now contain a flexible work clause of some description. To avoid creating an absolute entitlement to work from home, it’s essential the clause makes clear that any arrangement is always subject to your operational needs and policies.
We recommend phrases such as “permitted to work from home in line with company policy” to ensure maximum flexibility for your business.

Having a Clear Policy

Australian employers should ensure they have a clear Work From Home or hybrid working policy which covers, at a minimum:

• which employees are eligible to work from home and in what circumstances
• how employees can request to work from home
• what you expect of employees who work from home (communication, availability, performance)
• how the policy may be changed or varied in the future
• how WHS obligations will be met—including conducting risk assessments, complying with ergonomic requirements, and ensuring timely reporting of hazards, incidents or injuries.

HR Command’s Work From Home policy covers all of these essential areas. You can purchase a customisable template here.

Following a Structured Process

Where you’re proposing to change an employee’s workplace arrangements, it’s essential to follow a structured process to ensure it is—and is seen to be—fair and reasonable. This includes consulting with the employee about the proposed change, providing written notice, offering them an opportunity to discuss it, and documenting the discussions and any decisions made.

Allowing Flexibility

While clear policies are essential, it’s equally important not to forget that flexibility should still be offered wherever possible. This includes taking into account genuine reasons an employee may put forward for being unable to comply with a direction they see as inconsistent with their contract.
Treating requests for flexible work as an entitlement rather than a privilege can put employers at risk of unfair dismissal claims, as well as creating operational difficulties.

Practical Advice

Employers will be able to direct employees to adopt a hybrid working model (or any other model requiring workplace attendance) where:

• the contract links any flexible work arrangement to the employer’s policies and procedures
• the direction to work in the workplace is reasonable and lawful
• the employer has followed a fair and reasonable process in implementing the change.

What to Do Next

A well-drafted Work From Home policy is one of the most essential documents in your employment toolkit. HR Command’s template will enable you to:

• define which employees are eligible to work from home, and in what circumstances
• set out a clear process for employees to request to work from home
• set clear expectations around communication, availability and performance
• establish a structured process for reviewing and varying arrangements
• deal fairly and lawfully with any instances of non-compliance.

Using a structured template will ensure your policy complies with Australian law, reduce the risk of successful disputes, and enable you to enforce reasonable management directions when you need to.

Remember, flexible work is not a one-size-fits-all arrangement, and clear policies and processes are essential to protecting both your business and your employees.
Access HR Command’s Work From Home policy template here