Achieving productivity in flexible workplaces

Remote and hybrid work are no longer perks — they’re embedded expectations (including amongst the talent pool of desirable candidates), and in some cases, legal rights.

Flexible work is here to stay, and we are observing a consistent judicial approach to disputes about flexible working — characterised by a shift in favour of employees. However, these arrangements are not an invitation for employees to take their foot off the pedal and employers ought to be equipped to deal with productivity and efficiency concerns when they undoubtedly arise. On 3 March 2026, the Victorian government took a bold step in this direction, confirming it will introduce legislation in July 2026 which, if assented to, will enshrine a right for employees, where reasonable, to work from home two days per week, from 1 September 2026.

When flexibility involves remote working, businesses are entitled to take steps to ensure productivity and monitor employees’ work output/conduct when not physically in the office. Having said that, in doing so employers must be mindful of whether such measures encroach on work health and safety, and an employee’s right to privacy (including the newly introduced statutory tort of “serious invasion of privacy” addressed further below), which may narrow the scope for close remote/digital employee oversight.

Flexibility rights

Employees’ rights to flexibility and pathways to request hybrid or alternative work design (including remote working arrangements) are comprehensive and enshrined at law.

• Employees in prescribed categories (such as carers, parents of young children and employees with a disability) hold a statutory right to request flexible working arrangements (FWAs) under section 65 of the Fair Work Act 2009 (Cth) (FW Act). Amendments introduced through the “Secure Jobs, Better Pay” reforms effective in 2023, strengthened this entitlement by mandating a process for employers to respond to FWA requests in writing and in detail (see section 65A of the FW Act).
• The Fair Work Commission (FWC) is empowered to deal with, arbitrate and make orders about FWA requests. The scope of this power was recently tested in a decision concerning Westpac, where its compliance with section 65A was heavily scrutinised and found to fall short of its statutory obligations.
• Many modern awards contain specific flexibility terms including part-time arrangements, consultation requirements, and span-of-hours adjustments designed to support flexible scheduling. Continuing the trend of limiting employers’ capacity to alter employees’ working arrangements, the FWC recently found that an employer covered by the Children’s Services Award 2020 was not permitted to change a part-time employee’s regular pattern of work absent her written agreement.
• In July 2026, we will see the Victorian government propose amendments to the Equal Opportunity Act 2010 (Vic) which would see the introduction of a statutory right to work from home two days per week. Aside from the constitutional issues that this may enliven, there will be a genuine question as to the practical impact such laws will have on the Victorian workforce and national debate.
• Further changes on the horizon include a proposed “working from home” term in the Clerks – Private Sector Award 2020 and the Greens’ Fair Work Amendment (Right to Work from Home) Bill 2025 (WFH Bill) seeking to expand employees’ eligibility to request FWAs and limit the grounds on which employers may refuse these requests. Notably, however, the Productivity Commission’s submission to the Senate Education and Employment Legislation Committee on the WFH Bill, released on 2 February 2026, expressed doubt as to the need for a legislated right to work from home, with employers and workers having come to a “sensible middle ground.”

In practice, flexible work models succeed only where the employment relationship — and importantly, underlying work design — support autonomy, clarity and trust. This means that roles and position descriptions should be structured around clearly defined outcomes, without defaulting to physical presence as a key metric. This is pivotal to assessing whether FWAs are viable/reasonable and will enable businesses to properly assess and respond to FWA requests.

Managing productivity concerns

You’ve embraced or enabled flexibility in your workforce – now how do you manage productivity concerns that arise in respect of flexible workers?

For employers, one of the primary approaches to assessing productivity (and taking management / disciplinary action against employees whose productivity declines) is remote monitoring. Types of monitoring which may be accessible to employers include keystroke logging, screen capture technologies, location tracking, audio monitoring / recording and mandatory camera usage – each attaches a level of legal risk.

Although businesses are entitled to monitor employees’ performance and obtain data for legitimate operational needs, practices which were historically accepted as “part of the bargain” when working remotely may now be viewed as intrusive or disproportionate, particularly when they extend into employees’ homes or personal devices. While employers face increasing pressure to maintain productivity in a workforce where physical visibility is reduced, these concerns must be balanced against a variety of regulatory expectations.

• In New South Wales and the Australian Capital Territory, employees enjoy the privacy safeguards implemented by the Workplace Surveillance Act 2005 (NSW) and Workplace Privacy Act 2011 (ACT). These Acts impose notification requirements, limit interference with employee device use and restrict covert surveillance.
• From a federal privacy perspective, employers who require substantial remote employee monitoring should bear in mind the recently introduced tort for “serious invasions of privacy.” A landmark amendment to the Privacy Act 1988 (Cth) (Privacy Act) in June 2025 established a cause of action available to employees (among others) whose employers seriously intrude upon their “seclusion” by, for example, watching, listening to or recording their private activities or affairs, where the employee reasonably expected privacy.
• Privacy considerations when monitoring productivity are also closely linked to employers’ work health and safety obligations. The federal Work Health and Safety (Managing Psychosocial Hazards at Work) Code of Practice 2024 specifically identifies “intrusive surveillance” as a psychosocial hazard that may arise at work. Productivity tools that rely on frequent digital surveillance (such as keystroke logging and location tracking, for example) may themselves give rise to psychosocial risks, meaning employers must approach productivity management with the same risk based lens applied to other WHS hazards.
• In NSW, the Work Health and Safety Amendment (Digital Work Systems) Bill 2025, passed Parliament on 12 February 2026. Critically, this legislation introduces a specific duty for persons conducting a business or undertaking to consider (among other things) whether the use of a “digital work system” (meaning an algorithm, artificial intelligence (AI), automation or online platform) creates or results in risk including, relevantly, “the use of excessive or unreasonable metrics to assess and track the performance of workers” and “excessive or unreasonable monitoring or surveillance of workers.” This means that remote monitoring and surveillance mechanisms must be re-assessed from a safety perspective.

The bottom line: commercial productivity imperatives must be reasonably balanced against employees’ rights to flexibility and privacy, including to ensure that employers remain compliant with their work health and safety obligations.

Key takeaways

With a hybrid workforce, employee oversight must be approached with nuance – we see this in a shift to objective, outcome-based productivity assessments and periodic performance conversations (rather than continuous digital oversight).

The blanket “benefit to productivity” has not succeeded as a justification for mandating in-person attendance or for refusing requests for flexible/remote working arrangements. To ensure a best practice approach to flexible working arrangements and monitoring/surveillance practices, we recommend that businesses ask themselves these questions:

• Have we considered whether in-person attendance at work (at all times or otherwise) is required for the specific role, or is it a general business preference? Have position descriptions/contractual documents been updated in this regard?
• Do our flexible work policies and processes comply with the procedural requirements of section 65A of the FW Act?
• Is our monitoring / surveillance of employees (including during remote working arrangements) conducted in the least intrusive way possible, including via any new AI platforms the business has introduced?
• Have the risks associated with monitoring/surveillance been considered from a psychosocial perspective?
• Have employees been notified of the existence and extent of surveillance measures, in compliance with relevant state legislation? For example, in New South Wales, employees must be given 14 days’ written notice before surveillance commences. Are our policies/procedures up to date and compliant with applicable legislation?
• To what extent are records of remote monitoring retained and is there a process for destroying those records in place, to comply with the Australian Privacy Principles (for employers who are subject to the Privacy Act)?
• Importantly, do our performance management policies and procedures specifically address how to deal with productivity decline as a result of remote working?

Persephone Stuckey-Clarke, Justin Le Blond, and Ruth Nocka are Partners, Jennifer Moran is a Managing Associate, and Anna Sutton-Kunc is an Associate, all at Dentons in Sydney.