Victoria’s landmark plan to give workers a legal right to work from home is being hailed as a win for carers but warned it could unleash a surge in workplace disputes, higher costs and new legal risks for employers
Victoria’s move to legislate a right to work from home for employees whose roles can be performed remotely is being hailed as a potential lifeline for carers and families – but legal experts warn it could unleash a wave of new workplace disputes, higher insurance costs and fresh pressure on already stretched courts and tribunals.
Under the Victorian Government’s proposal, eligible workers will gain a legal entitlement to work from home at least two days per week, regardless of the size of their employer. The state will be the first jurisdiction in Australia to enshrine work‑from‑home (WFH) rights in law, a step many expect to become a template for other states and territories.
Tinashe Makamure, a special counsel in Barry Nilsson’s Insurance & Health practice specialising in employment law, said the changes are likely to open the door to more litigation as both employers and employees test the new boundaries.
“We would expect an initial moderate increase, however over time we would anticipate a more significant rise, as people work out how the laws work in practice,” Mr Makamure said. “There is potential for actions brought by or on behalf of classes of workers who may have different views to their employers as to whether their jobs can be done from home.”
Courts already under strain
The looming reforms come against the backdrop of a sharp rise in employment-related disputes.
Data released late last year showed applications lodged with the Fair Work Commission in 2024–25 hit a record 44,075 – almost 50% higher than in 2020–21 and 24% above the five‑year average. The Federal Circuit and Family Court of Australia recorded a 25.5% increase in general federal law filings and a 64% jump in migration matters over the same period.
“As the first jurisdiction in Australia to enshrine work from home entitlements in law, Victoria can expect to see a significant increase in workplace‑based claims,” Mr Makamure said. “This is likely to weigh on the Fair Work Commission, VCAT as well as both State and Federal Court caseloads – which are currently being pushed beyond capacity.”
He warned that any further spike in disputes “will likely push up the cost of Employment Practices Liability Insurance (EPLI) policies, creating yet another financial burden for business owners and employers in what is an already heavily regulated and complex regulatory environment.”
New avenues for discrimination and ‘general protections’ claims
The proposed legislation is expected to centre on employees with family and caring responsibilities – an area already protected under Victoria’s Equal Opportunity Act 2010 and recently strengthened in the federal Fair Work Act 2009, which now allows the Fair Work Commission to arbitrate disputes over flexible work arrangements.
According to Mr Makamure, this legal architecture means the reforms could quickly expand the range of claims available to employees.
“The proposed legislation has family and care responsibilities at its core, the protection for which is already enshrined… While we will have to wait and see what form the legislation takes, it lends itself to forum shopping with scope for new general protections and discrimination claims,” he said.
Business groups have already voiced concerns that mandatory WFH rights could undermine productivity and deter investment in Victoria, particularly if employers find it harder to control how and where work is performed.
Performance management in the firing line
One of the most immediate practical flashpoints is likely to be performance management.
“It is commonplace for employers to direct underperforming employees to work from the office as a means to manage and monitor that performance,” Mr Makamure said. “However, these amendments run the risk of causing legitimate performance and conduct measures to be unlawful.”
Where employers insist underperforming staff return to the office, they may be challenged by workers arguing their roles can be done from home and that a direction to attend the workplace amounts to discrimination or a breach of their new statutory WFH rights.
Employers urged to prepare – but not panic
With the exact drafting of the legislation still to come, Mr Makamure said employers should begin preparing now, while avoiding hasty over‑corrections.
“Because we don’t yet know precisely what form the legislation will take, employers should take a measured approach to these matters with a view to adopting a firmer position once we know exactly what is set out in the legislation,” he said.
He recommends employers:
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Conduct an audit of their workforce to understand which roles can genuinely be performed from home, and to what extent
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Seek legal advice on different “iterations” of their workforce structure and working patterns
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Start developing clearly articulated policies that spell out WFH expectations and requirements by role
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Consider updating or implementing enterprise agreements that reflect their specific operational needs once the detail of the reforms is clear
“Once more detail about the legislation is announced, further advice will be required to tailor the approach to individual workplaces,” Mr Makamure said.
Not simply ‘good’ or ‘bad’
Mr Makamure cautioned against framing the changes as either a win for workers or a loss for employers.
“I don’t think these changes can be viewed in a binary sense as positive or negative,” he said. “From an employer perspective, and subject to what the actual legislation ends up saying, it risks increased costs and difficulties managing staff in an already heavily regulated environment.”
“This may result in higher legal and insurance costs as the new law creates new causes of action which in turn create new areas of risk even where bona fide attempts are made at compliance.”
For employees – particularly those with caring responsibilities – the reforms could be transformative.
“From an employee perspective, especially those with family and carer responsibilities, there are real benefits in that it seeks to ensure that those employees to whom the amendments apply, can work from home, which may ease some of the pressures arising from the current economic climate,” he said.
“In turn, there is potential for those employee benefits to lead to improved workforce engagement, creating an upside for employers.”
A national test case in the making
While the legislation will initially apply only in Victoria, Mr Makamure expects its impact to extend well beyond state borders.
“If this proposal becomes law in Victoria, I expect it’ll only be a matter of time before other states and territories explore similar legislative reforms, so it’s an issue that all employers need to monitor and potentially seek professional advice on as 2026 progresses,” he said.
In the meantime, employers across the country are being urged to watch Victoria closely. The way the state manages the trade‑offs between flexibility, productivity, legal risk and employee wellbeing is likely to shape how – and where – Australians work long after the current proposal becomes law.
