Employee started working during pandemic, but contract allowed for work locations other than home
The Fair Work Commission recently held that an Australian employer validly dismissed a worker who refused to comply with its hybrid working policy, finding that the employee wrongly believed his right to work from home was “unconditional.” The decision serves as a clear reminder that working from home is not an unfettered entitlement held by employees. Employers can direct employees to work from the office in line with the terms of written employment contracts and/or lawful and reasonable directions.
In Johnson v. PaperCut Software Pty Ltd [2026] FWC 178 (PaperCut), the employer dismissed Mr Johnson after he repeatedly refused to comply with a direction to attend the office three days a week. Johnson commenced working at PaperCut in April 2022, towards the tail-end of the COVID-19 pandemic. At the time, PaperCut allowed employees to work from home and required only intermittent attendance at the office.
Under Johnson’s written employment contract, he was initially “permitted to work from [his] personal residence… in line with relevant PaperCut policy” but could be “required to work at other locations from time to time.”
After the Victorian Government encouraged a return to the office post-COVID lockdowns, PaperCut undertook hybrid work trials to assess how its employees were working. The company consequently developed and implemented a return-to-hybrid-work policy. Johnson participated in PaperCut’s staff engagement and consultation process in relation to the policy.
In August 2022, after the new hybrid work policy commenced, PaperCut sought to vary Johnson’s contract to formally include the physical office as a work location, in addition to his home. Johnson refused, believing he had an ongoing contractual right to work from home. Johnson was ultimately dismissed on 19 June 2025 after a final meeting.
Dismissal was fair
Commissioner Connolly held that Johnson’s refusal to comply with a lawful and reasonable direction was a valid reason for dismissal. On the plain and unambiguous meaning of the written contract, PaperCut could allow Johnson to work from home in line with its policy. However, it was not “a right he was entitled to without caveat.” For instance, there could be circumstances in which the policy could validly change to no longer permit working from home. This was apparent in the statement that Johnson could be required to work at other locations. The direction to attend the office was within the scope of the written employment contract, and objectively reasonable.
Johnson did not provide a reason why he should not attend the office or make a request for flexible work arrangements. PaperCut took steps to transition to the hybrid work model, and Johnson was provided “numerous opportunities” to understand PaperCut’s position and comply. It was not material that Johnson had performed his role from home for the majority of his employment, or that other employees were allowed to work from home. His refusal to follow a lawful and reasonable direction left PaperCut with no option but to terminate his employment. The dismissal was not considered harsh, unjust or unreasonable.
Whether an employee is obligated to follow a direction to work from the office (or another location) will depend upon whether the direction from the employer is lawful and reasonable. Generally, written employment contracts will contain an express provision that requires employees to comply with lawful and reasonable directions, or to work from a specific work location when directed to do so.
Clear, unambiguous wording in contract
To avoid disputation and to ensure that the direction falls within the scope of the employment agreement, employers should ensure that written employment contracts either:
- Contain clear and unambiguous wording stating an employee may be required to work from a particular physical location at the discretion of the employer as directed. This applies regardless of whether the contract explicitly requires the employee to work from the office, or permits the employee to work from home.
- State that the location of work will be determined in accordance with the employer’s policies, and that employees are required to comply with all relevant policies.
Having well-drafted employment contracts and policies can help mitigate the risk of disputes with employees regarding their entitlements and ensuring employment contract templates are contemporary and reviewed for legal enforceability is critical.
Employers should also keep in mind that, irrespective of the employment contract and policy, workers can request flexible work arrangements under section 65 of the Fair Work Act 2009 (Cth), if the worker meets certain requirements.
Paul O’Halloran is a Partner and Head of the Melbourne Office at Dentons. Michelle Huang is a Solicitor at Dentons.
