The Fair Work Commission has awarded compensation to an employee who was sacked for refusing to give up her decade-long work-from-home arrangement. 

The right way to manage return-to-office mandates has been a significant debate among employers in the wake of the pandemic. 

In October last year, AHRI’s Hybrid & Flexible Working Practices in Australian Workplaces report revealed that mandated office days increased by 11 percentage points from 2022-2023. The research suggests most organisations are asking employees to return to the physical workspace for at least three days per week.

However, for employers who are upping their efforts to get people working on-site more often, the evolving legislative landscape around remote and flexible working has added several layers of complexity.

New laws coming from the Secure Jobs, Better Pay Bill, which came into effect in 2023, mean businesses now need to take extra care to consider the viability of flexible and remote work arrangements before refusing to accommodate them.

The importance of this consideration was underscored by a recent ruling by the Fair Work Commission (FWC), which concerned an employee who was unfairly dismissed for refusing to give up her long-term work-from-home arrangement.

Dismissal for refusing to work on-site was “unreasonable”

The employee in this case, an accounts assistant for a small construction company, claimed her full-time remote work arrangement had been in place since her employment start date in 2013, due to family care needs and her decision to homeschool her children. However, she was not able to produce a written contractual agreement to this effect.

In 2023, she was notified that her employer had decided her duties would be more effectively performed in the office. It disputed her claim that she had worked remotely for ten years, saying that the work-from-home arrangement began only with the COVID-19 pandemic.

The situation escalated when the employer proposed reducing her working hours and changing her role, which would have had a significant impact on her family’s financial situation and her children’s homeschooling. 

After she told the employer she could not accept these changes and work on-site full-time, it dismissed her for “performance issues due to working from home and unavailability at office in line with our department restructuring”.

When the employee brought her case before the FWC, she provided years’ worth of communications with her employer to back up her claim that she had worked from home throughout her employment. 

“It’s dangerous to link performance to working from home… It raises the risk of discrimination, because they could link that to caring responsibilities.” – Chris Hill, Principal at Onside Law

The FWC found no valid reason for the dismissal, noting the lack of evidence against the assistant’s performance. It also highlighted procedural deficiencies on the employer’s part, which were attributed to it being a small business with a lack of HR support. 

By the time this case was heard, the business in question had gone into liquidation, meaning that reinstatement was not an option. The Commission therefore ordered the employer to pay $5000 in compensation to the employee.

According to employment lawyer Chris Hill, Principal at Onside Law, this case is fairly unique given the longevity of the arrangement and the fact that the employer had gone into liquidation. However, the FWC’s ruling contains valuable lessons for HR on the importance of compliance and procedural fairness in changing the nature of employment.

One of the employer’s most significant missteps in this case was conflating the employee’s alleged performance issues with her working arrangements, he says.

“It’s dangerous to link performance to working from home… It raises the risk of discrimination, because they could link that to caring responsibilities [or other protected attributes].”

“Instead, if there are performance concerns, an employer might say, ‘You’re not processing enough invoices per day,’ for example – the focus should be on the output rather than why it might be that way.”

The long-term nature of the arrangement would have factored heavily into the request being considered unreasonable, he adds.

“The applicant was able to substantiate that there was effectively an agreement with the employer before COVID that she could perform her role most of the time fully from home. So it would be relevant for the Commission to look at why it worked so well for such a long time, even before anyone had ever heard of the pandemic, and now it’s not.”

Legal considerations around return to work mandates

For employers seeking to enforce a return to the office, it’s important to be attuned to the possibility of employee resistance, says Hill.

“Best practice [includes] things like giving a good amount of notice and consulting with employees or employee representatives,” he says.

In their consultations, they should make the reasoning behind the mandate clear; whether it’s fostering teamwork, enhancing productivity or other reasons, explaining the rationale can help mitigate resistance.

Possibly the most crucial consideration for employers is how they will respond if an employee refuses to comply with a return-to-work mandate, he says.

If an employee requests an individual flexible work arrangement, employers are legally required to consider the request if the employee is:

• Over 55
• Living with a disability
• Pregnant
• Caring for infants or school-aged children
• Carers (within the meaning of the Carer Recognition Act 2010 (Ch)), or
• Experiencing family and domestic violence, or caring for someone who is.

If an employer refuses a flexible work request from an employee with one or more of these attributes without reasonable business grounds, the matter can be taken to the FWC for arbitration.

However, even if the employee does not fall into one of the protected attribute categories, employers should still tread carefully when considering disciplinary action, says Hill. 

If the issue relates to performance, employers should follow the same performance management process for a remote worker as they would to an on-site worker, and avoid unnecessarily conflating performance issues with their working arrangements. 

If the issue relates to the feasibility of a role being performed remotely, care should be taken to establish whether adjustments or alternative arrangements could be made to accommodate the employee’s preference.

Demonstrating that these aspects have been given due consideration will go a long way in protecting your organisation from accusations of unfair dismissal, says Hill.

“Generally, there have been some other cases where the Commission has been supportive of employees being required to return to the office,” he says.

“But you need to make sure you give them a chance to explain why they can’t do it. Always give them a chance to respond, and have regard to their length of service and all other aspects of their employment before dismissing them.”

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