Australia is stepping into a new era of work.

We’ve already seen the introduction of the ‘right to disconnect’ under amendments to the Fair Work Act 2009, giving employees the ability to refuse work-related contact outside their hours, unless it’s unreasonable.

And now, we’re seeing the next evolution:

• At a federal level, there are ongoing discussions about strengthening employees’ rights to request flexible work, including working from home, with a focus on limiting when employers can refuse.
• On a state level, Victoria is signalling a more assertive approach. From September 1, 2026, new Victorian laws will give employees the legal right to work from home (WFH) for at least two days a week if their role allows, enshrined in the Equal Opportunity Act. The law covers all business sizes, with a delayed start date of July 1, 2027, for employers with fewer than 15 employees.

What’s different from today?

Under current law, flexible work arrangements in Australia operate within a “request and consider” framework.

Employees can request flexibility (including working from home), but only under specific circumstances - and employers can refuse on ‘reasonable business grounds’ under the Fair Work Act 2009.

In practice, this has given employers broad discretion. What’s emerging, federally and within Victoria, is fundamentally different.

We’re moving toward:

• A normalised expectation of working from home
• A stronger legal obligation on employers to justify refusal
• A shift from ‘can I work from home?’ to ‘how will we make this work within the law?’

Critically, the threshold for refusal is likely to rise.

There will be a higher bar for employers to refuse the request.

An employer may only be able to refuse an employee’s request to work from home if granting such a request would make the performance of the employee’s inherent duties impractical or impossible. This is a significantly higher threshold than the current ‘reasonable business grounds’ test.

Currently, when employers are assessing an employee’s request to work from home, the refusal by an employer on reasonable business grounds often considers impacts across business operational needs, productivity, team collaboration, training requirements, data security and supervision. While these impacts may currently support an employer’s refusal to accept an employee’s request to work from home, under the proposed new legislation, they would likely not be sufficient grounds for a refusal under the new test (being one of impractical or impossible).

And that changes the conversation. This is no longer about accommodating individuals. It’s about designing systems.

What employers need to think about now:

• Redesign roles for outcomes - If a role can’t be measured without physical visibility, the role isn’t clear enough. Define what success looks like, what needs to be delivered, and how impact is measured, so performance is driven by outcomes, not visibility.
• Equip leaders - Leading hybrid teams requires a different skillset, one grounded in trust, clarity and accountability. Without the right capability, leaders default to control or avoidance, which erodes both performance and engagement.
• Get ahead of the legislation - the bar for refusing work from home is rising, and waiting until it’s mandated puts you on the back foot. Proactive businesses are already redesigning how work gets done so they can meet compliance requirements without compromising performance.
• Protect connection intentionally - Connection doesn’t happen by accident in a hybrid world - it needs to be designed. Be deliberate about when and why teams come together, ensuring in-person time drives collaboration, development and a genuine sense of belonging.

The bottom line - the businesses that will thrive are the ones who design something better.

Something more deliberate.

Something compliant.

Something genuinely effective.

Need help planning for legislated work from home arrangements?

Contact Emily at People Design HR – emily@peopledesign.com.au 0402 474 807