Victoria has become the first Australian state to legislate the right to work from home. Here’s how the new legislation will work, and what it could mean for Australia’s broader industrial relations landscape.

Introduced to Parliament earlier this week, a new law will give Victorian workers who can work from home the right to do so two days per week. This makes Victoria the first Australian jurisdiction to enshrine remote work entitlements into law.

The legislation will kick in on 1 September this year, with a delayed commencement of 1 July 2027 for small businesses (those with fewer than 15 employees). 

It will apply to Victorians whose roles can reasonably be performed remotely, and will cover regular part-time and casual workers as well as full-time employees.

While the new laws stop at Victoria’s borders for now, their impact could extend much further. Employers across the country should be paying close attention not only to how the changes operate in practice, but also how they impact workforce expectations.

“Given the mobile nature of Australia’s workforce, if this initiative proves to be attractive at recruiting and retaining talented staff in Victoria, then other states [might] follow,” says Joseph Kelly, Principal at Kelly Workplace Lawyers.

Here’s what we know so far about the changes, and their potential implications for Australia’s broader legal landscape.

How will the new rules work?

This legislation adds another layer to Australia’s already complex rules around flexible work.

Since 2023, certain employees across Australia have had the right to request flexible work arrangements and challenge refusals through the Fair Work Commission (FWC). These rules only apply to employees with certain protected characteristics, including people aged over 55, those living with disability, pregnant employees and carers.

The new legislation in Victoria goes a step further by giving all employees the right to work from home if they can, not just to request it.

This entitlement will be enforced through the state’s equal opportunity framework. Any disputes that arise will go to the Victorian Equal Opportunity and Human Rights Commission for conciliation.

“Hybrid work falls down when expectations are vague, when decisions feel arbitrary or when leaders apply different rules without a sound business reason.” – Dora Peake FCPHR, Group Director of People and Culture, Versent

“This is designed to avoid a conflict with the Federal workplace relations system,” says Kelly. “Every State is free to make their own laws about workplace safety and workplace discrimination, and Victoria is [using] this freedom to introduce these laws.

“There is no immediate or obvious conflict between the State laws and the Federal law, but the validity of the State laws may be challenged in the High Court.”

To get ahead of the new laws, he says employers in Victoria would be well-placed to conduct a thorough audit of all employees’ positions to determine whether all or part of their work can be performed remotely.

“If the work cannot, this should be communicated to staff with a clear explanation of why the work cannot be performed at home,” he says. 

“On an ongoing basis, new positions should be offered on a contractual basis that sets out if the role can or cannot be performed from home.”

The HR pros and cons of legislating work from home 

In its announcement of the new rules, the Victorian government highlights the wide-ranging benefits of remote working. 

It cites research showing that working from home saves employees an average of $110 a week or $5308 every year, and points out that the rise of remote work has led to an increase in workforce participation and a decrease in urban congestion.

AHRI’s own research reinforces the benefits. In last year’s Hybrid and Flexible Working Practices in Australian Workplaces report, 65 per cent of employers reported that hybrid work resulted in better work-life balance among employees, while 45 per cent said it positively impacted productivity at their organisation (compared with 11 per cent who said it had a negative effect).

In separate AHRI research, 48 per cent of respondents would support a proposal to extend the right to request flexible working to all employees. However, as previously reported, AHRI’s  evidence showed there was no need for further prescriptive regulation, and that employers are best placed to make these decisions. 

Dora Peake FCPHR, Group Director of People and Culture at Versent and AHRI Victorian State Councillor, concurs, stating the benefits of hybrid work don’t necessarily translate into a need for legislative enforcement.

“My concern with legislating a fixed entitlement is that it may not fully account for the nuance of work,” she says.  “Some roles, teams or client environments require different rhythms. Even in organisations that support hybrid work, there will be moments when coming together matters as part of the employee experience – for example, onboarding, innovation, performance conversations, team rituals, customer work and culture building.”

To avoid missing out on these moments, employers will need to be more deliberate about when and why employees come together in person, she says, making sure office attendance is purposeful rather than based on habit or manager preference.

“Hybrid work falls down when expectations are vague, when decisions feel arbitrary or when leaders apply different rules without a sound business reason,” she says.

“The organisations that will navigate this best are those that already have mature hybrid practices in place: clear guardrails, purposeful office days, outcome-based performance measures, well-equipped managers and strong inclusion practices.”

🧰 HR’s career resource toolkit

• Webinar: Join AHRI’s Quarterly Work Outlook Update webinar today at 12pm for the latest insights on what’s shaping Australia’s workforce.
• Learning: AHRI’s Develop and Implement HR Policies course will help you set clear behavioural expectations around hybrid work, equipping you with the skills to structure, write and implement effective policies and procedures.
• Learning: Take your employment law expertise to the next level with AHRI’s Advanced HR Law course.

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