Work From Home, Work From Anywhere:

Where Australia's Flexible Work Laws Are Heading

Working from home has moved from a pandemic workaround to an everyday expectation, and the law is starting to catch up. In 2026 alone, the Fair Work Commission has decided to write a working from home clause into one of Australia’s largest awards, and Victoria has tried to legislate a right to work from home two days a week.

At the same time, “work from home” is turning into “work from anywhere”. Employees are asking to work from a holiday house interstate, from family overseas, or to move abroad and keep their Australian job.

For employers, the question is no longer whether to allow flexible work. It’s how to manage it fairly, lawfully and consistently while the rules are still being written. Here’s where things stand, what’s coming, and what to watch for.

What the law says today

Right now, there is no general legal right to work from home in Australia. What employees have is a right to request flexible working arrangements, including working from home, under section 65 of the Fair Work Act 2009.

That right applies to employees with at least 12 months’ service (or regular and systematic casuals) who fall into certain categories, such as parents or carers of school-aged children, employees with a disability, employees aged 55 or over, and those experiencing family and domestic violence.

Since 2023, the process has had real teeth:
  • Employers must respond in writing within 21 days.
  • A refusal must be based on reasonable business grounds, and the employer must first discuss the request and genuinely try to reach agreement.
  • Employees can take disputes to the Fair Work Commission, which can order an employer to grant a request.
The Commission has shown it will use that power. In 2025, it ordered Westpac to let an employee work from home after finding the bank hadn’t established reasonable business grounds for refusing her. Equally, recent decisions confirm that a genuine drop in productivity can be a reasonable ground to say no. The lesson for employers is that every refusal needs to be specific, evidenced and documented.

The reforms: what’s changing and what’s under consideration

1. A working from home clause in the Clerks Award
On 27 August 2026, a Full Bench of the Fair Work Commission decided to insert a new clause 5A into the Clerks – Private Sector Award 2020, which covers around 1.56 million clerical and administrative employees.

The clause lets an employee request, in writing, to work from home, and lets employer and employee agree an arrangement. Importantly, it does not force employers to say yes. What it does is give a formal framework for agreeing WFH arrangements, including the ability to adjust award rules about continuous hours, when ordinary hours are worked and the timing of breaks, along with record-keeping obligations.

The Commission published a draft determination, with submissions closing on 17 September 2026. A final determination and start date are still to come. The Commission has flagged that the clause could become a model for other awards, so this matters well beyond clerical roles.

2. Victoria’s proposed right to work from home

Victoria went further. On 16 June 2026, the Victorian Government introduced the Equal Opportunity Amendment (Work from Home) Bill 2026. If passed, it would give eligible employees a legal right to work from home two days a week (pro rata for part-time and regular casual employees), where their role can reasonably be done from home. Employers would have to respond within 21 days, could only refuse on limited reasonableness grounds, and would be required to cover reasonable work from home costs. Disputes could go to VCAT.

The Bill has hit turbulence. Its intended start date of 1 September 2026 was reportedly pushed back to 1 July 2027, and on 10 September 2026 the Legislative Council referred it to a select committee. With a state election due in November 2026, its future is uncertain, and commentators have also raised questions about how a state law sits alongside the federal Fair Work Act.

3. The federal picture

At the federal level, a Greens proposal to legislate a right to work from home was not supported in the Senate, and the Federal Government has not backed a statutory right. For now, the federal approach is to strengthen the right to request and let the award system do the detailed work.
What it means: the direction of travel is clear, even if the destination isn’t. Flexible work is becoming more structured, more documented and harder to refuse without good reason.

Emerging challenges for employers
  • Consistency and fairness. Ad hoc arrangements made by individual managers create inconsistency, and inconsistency creates disputes and discrimination risk.
  • Defending a refusal. “We prefer people in the office” won’t meet the reasonable business grounds test. Refusals need role-specific reasons, such as client-facing duties, supervision needs or evidenced productivity impacts.
  • Hours, overtime and the right to disconnect. Work done at home is still work. Blurred hours can lead to unpaid overtime claims, and the right to disconnect now protects employees from unreasonable out-of-hours contact.
  • Work health and safety. An employee’s home becomes a workplace. Employers still owe a duty of care for ergonomics, psychosocial hazards, isolation and injuries at home.
  • Performance and culture. Managing outcomes rather than presence takes different skills, and team connection, onboarding and development need deliberate effort.
  • Costs and equipment. Who pays for the desk, the internet and the electricity is becoming a live question, and under the Victorian Bill it would become a legal one.
  • Multi-state workforces. Employers with staff in Victoria may face different rules for different employees doing the same job.
Work from anywhere: when remote work crosses borders

The next frontier is the employee who wants to work from Bali for a month, or relocate to the UK and keep their job. It’s an attractive retention tool, but it carries risks many employers don’t see coming:

  • Employment law can follow the employee. The Fair Work Act can continue to apply to an employee of an Australian employer working overseas, and the local laws of the host country may apply as well. A 2026 Fair Work Commission decision, Sanderson v Brightest Australia, is a reminder that Australian workplace laws can apply even where an employee lives and works entirely outside Australia.
  • Tax and payroll. Overseas work can trigger foreign income tax withholding, employer social security contributions and payroll registration, alongside continuing Australian PAYG and superannuation obligations.
  • Permanent establishment. An employee working overseas, particularly in a senior or revenue-generating role, can create a taxable presence for the business in that country.
  • Visas and work rights. A tourist visa generally does not permit work, even remote work for an Australian employer.
  • Workers compensation and insurance. Cover may not extend to injuries overseas.
  • Data security and privacy. Accessing client and employee data from overseas raises privacy and cyber-security questions.
  • Contractor or employee? Engaging overseas “contractors” who work like employees can still create employment obligations.
The safest approach is a clear policy covering whether overseas work is allowed, for how long, in which countries and with what approvals. Get tax and legal advice before any longer-term arrangement starts.

What employers should do now

  1. Review your flexible work and WFH policy. Make sure it reflects the current Fair Work Act process and can adapt to award and state changes.
  2. Assess roles. Identify which roles can reasonably be done remotely, and document why others can’t.
  3. Get the process right. Respond in writing within 21 days, discuss requests genuinely, and record your business reasons.
  4. Document arrangements. Put agreed WFH arrangements in writing, covering hours, availability, equipment, WHS and review dates.
  5. Set a work-from-anywhere policy. Decide your position on interstate and overseas work before the requests arrive.
  6. Train your managers. Most disputes start with a poorly handled conversation.
Flexible work done well is a powerful tool for attracting and keeping good people. Done badly, it’s a growing source of disputes and risk.

Need help? Explore Potential can review your flexible work policies, help you assess WFH requests, and guide you through the changes as they land. Get in touch with our team to start the conversation.
 
This article is general information only and does not constitute legal advice. The reforms discussed are still developing and may change.