Australia: Return-To-Office Mandates: Are Employers Still in Control?

Authors: Greg Robertson & Aatish Budhwani

A recent decision of the Fair Work Commission has confirmed that a direction by an employer to an employee to work in the office rather than at home can be a reasonable and lawful direction. But other Fair Work Commission rulings clarify that where the employee is making a request under statutory flexible work provisions, employers must strictly follow statutory procedures and provide evidence-based reasons when refusing a flexible work request to work from home. In such cases, an employee’s request can only be lawfully refused if all legal preconditions are met.

Introduction

As organisations continue to refine post-pandemic working models, the implementation of return-to-office directives has become a point of tension. The Victorian Government has foreshadowed legislation providing for a right to work from home on two days a week, and in the Federal sphere, one of the minor parties is planning on introducing a bill to the same effect. For employers, a key question arises: Can an employee lawfully refuse a direction to return to the workplace?

In a decision on 19 January 2026 (Johnson v PaperCut Software Pty Ltd [2026] FWC 178), Mr Johnson claimed he had been unfairly dismissed when he refused a direction by his employer to return to work in the office. Mr Johnson had originally been permitted to work from home (during the Covid pandemic), and his contract stated “The Employee is permitted to work from their personal residence in item 1 of Schedule 1 in line with relevant PaperCut policy. The Employee may be required to work at other locations from time to time.” As the State emerged from the pandemic, PaperCut introduced a hybrid work policy requiring employees to work in the office on three days per week. Mr Johnson refused to attend the office, and after many fruitless discussions and repeated warnings, the company terminated his employment. The employee in his unfair dismissal application argued the termination was unfair because his contract allowed him to work from home, but the Commission noted that the clause referred to working from home being subject to company policy, and while the company had initially “allowed” him to work from home, it “was not, however, as Mr Johnson believed, a ‘right’ he was entitled to without caveat.” The Commission looked at the extensive steps the company had taken to explain the change of policy and the consequences of refusing to comply and found that the dismissal was not unfair.

While employers thus retain the right to issue reasonable and lawful directions, this authority must be counterbalanced with an employee’s statutory right to request flexible working arrangements. Two other recent Fair Work Commission decisions, Louise v Metcash Trading Ltd [2025] FWC 2090 and Collins v Intersystems Australia Pty Ltd [2025] FWC 1976, illustrate this dynamic.

The Legislative Framework: An Overview of Section 65

Section 65 of the Fair Work Act 2009 (Cth) grants employees the right to request a change to their working arrangements, which includes work location, provided they are in one of several prescribed circumstances. These circumstances are set out in s 65(1A) and include the employee being pregnant; being the parent, or having responsibility for the care, of a child who is of school age or younger; having a disability; being 55 or older; being a “carer” of other defined categories of people; or experiencing family and domestic violence.

Under section 65A, an employer must provide a written response within 21 days. An employer may only refuse a request if several cumulative preconditions are satisfied. These are that the employer has discussed the request with the employee and genuinely tried to reach an agreement; that no such agreement was reached; that the employer has had regard to the consequences of the refusal for the employee; and that the refusal is based on reasonable business grounds.

Case Study 1: Louise v Metcash Trading Ltd [2025] FWC 2090

In this case, the employer issued a direction requiring corporate employees to attend the office for a minimum of three days per week. The Applicant, Catherine Louise, had worked remotely from commencement in 2020. She requested a full exemption from this direction on the basis of her circumstances as a parent of a teenage daughter with cystic fibrosis. Her stated goal was to minimise the risk of bringing pathogens into the household, thereby endangering her daughter’s health.

Metcash refused the request for a full exemption but offered a modified arrangement requiring two days of office attendance. This was not accepted by Ms Louise, who subsequently filed a dispute. The Commission made an order requiring Metcash to grant Ms Louise’s request. In its reasoning, the Commission made several key findings.

First, it was satisfied that Ms Louise’s request was validly made under section 65. It found a sufficient nexus between her request to work from home and her circumstances as a parent. The request was made because of her daughter’s condition and related to it. The Applicant led medical evidence, which supported the objective of infection minimisation.

Second, and importantly, the Commission found that Metcash had not established that its refusal was on reasonable business grounds. The Commissioner observed that Metcash “led no evidence to support those submissions.” The company’s assertions regarding the benefits of in-person collaboration were not supported by any evidence specific to the Applicant’s role or circumstances. The Commissioner noted the absence of any “evidentiary basis on which I could determine… whether the Office Direction would achieve the objectives.”

Finally, the Commission was not satisfied that Metcash had properly had regard to the consequences of the refusal for the employee. This case emphasises that the relevant enquiry is not merely whether the return-to-office direction was reasonable, but whether the employer complied with the specific statutory process for refusing a flexible work request under section 65A.

Case Study 2: Collins v Intersystems Australia Pty Ltd [2025] FWC 1976

In this case, the Respondent employer mandated a full return to the workplace five days per week. The Applicant, Paul Collins, sought to maintain a hybrid arrangement, working from home two days per week. He based his request on his responsibilities as a parent of school-aged children and a desire for work-life balance.

Intersystems refused the request for two days but offered an alternative of one day working from home per week. The Applicant rejected this alternative and filed a dispute. The Commission dismissed the application. It found that Mr Collins’s request was not validly made under section 65 of the Act, and as a consequence, the Commission lacked jurisdiction to deal with the dispute. The primary failing was the absence of the requisite nexus between the employee’s circumstances and the change sought.

The Commissioner stated, “the evidence does not demonstrate that he is required to work from home two days per week in order to meet those responsibilities.” It was noted that during cross-examination, the Applicant conceded he had no specific caring duties during core business hours and that existing flexible start and finish times adequately managed school logistics. The written request itself was found to merely express a preference to continue a pre-existing pattern, without articulating how the change specifically related to his parental responsibilities.

The Commissioner further found that even if the request had been valid, the employer had established reasonable business grounds for refusal. Intersystems led evidence, including user survey data indicating a decline in customer satisfaction, to support its position that in-person attendance was required to facilitate collaboration, mentoring, and improved service delivery. The employer was also found to have genuinely tried to reach agreement by offering alternative flexible arrangements.

Key Takeaways for Employers

• Where there are no section 65 considerations

1) Ensure any directions to return to working in the office are reasonable and supported by the contract of employment and proper policy. Ensure that any termination of an employee who refuses to work in the office is both fair and reasonable, for example, engage in proper consultation with the employee and ensure that the employee understands the impact of refusal.

• Where there are section 65 considerations

2) Follow the section 65A process strictly: A refusal is only valid if you discuss the request, genuinely try to reach agreement, consider the consequences for the employee, and base your refusal on reasonable business grounds. Missing any step makes your refusal unlawful.

3) Ensure the employee establishes a clear “nexus”. A valid request must clearly connect the desired change (e.g. working from home) to the employee’s prescribed circumstance (for example, caring for a child). Vague preferences are insufficient.

4) Always document and provide evidence for your “reasonable business grounds”. Generic claims about collaboration or productivity are not enough. You must provide specific, role-related evidence to justify why the flexible arrangement cannot be accommodated.

5) Propose and discuss genuine alternatives. Offering a counter-proposal demonstrates you have tried to reach an agreement and can help form a defensible position if a dispute arises.