Working (entirely) from home: Not a right ‘without caveat’

An employer has an implied contractual right to give employees lawful and reasonable directions, including about where they work. But what happens where an employment agreement permits working from home and an employee refuses to work from the office? In a recent case, the Fair Work Commission upheld an employer’s dismissal of an employee who insisted on working entirely from home, rejecting the worker’s claim that he held a contractual right to work from home. This article explores the issues.

Richard Johnson v PaperCut Software Pty Ltd [2026] FWC 178 (19 January 2026)

The employee’s employment agreement permitted work from his personal residence ‘in line with PaperCut's policy’ and acknowledged he ‘may be required to work at other locations from time to time,’ while requiring compliance with ‘reasonable and lawful directions and all policies, rules and regulations.’ PaperCut initially allowed mostly remote work, but after government guidance in response to the COVID-19 pandemic shifted, it introduced a hybrid policy in August 2023 requiring three days in‑office work by January 2024.

The employee participated in consultation about the change. PaperCut attempted to vary his contract in August 2022 to add the office as a work location, but he refused, insisting he could work ‘100% from home.’ In December 2024, PaperCut confirmed a 1 January 2025 shift to office‑based work with transitional options.

The employee maintained the direction breached his contract. PaperCut responded it was ‘confident its requirement was not a breach of his contract,’ stating the contract ‘operates by reference to company policy, and as such, we maintain that our requirement for in office attendance is both lawful and reasonable.’ Despite warnings, the employee intended to work solely from home. After repeated meetings and a final warning, he attended once in three weeks and was dismissed.

Commissioner Connolly found no basis for an ‘unconditional’ right to work from home: ‘Working from home, is something PaperCut “allowed” him to do.’ ‘It was not, however, as [the worker] believed, a “right” he was entitled to without caveat.’ Commissioner Connolly held the direction reasonable and concluded there was ‘no other real or reasonable option but to bring his employment to an end.’

Lessons for employers

Employers should always assess the reasonableness of any direction issued to employees requiring them to return to the office. When seeking to impose ‘return to the office’ mandates, an employer should check whether an employee’s employment agreement permits the change or limits the employer’s flexibility. Employers should also comply with any consultation obligations in an applicable industrial instrument.

Employers also need to consider any wording in policies and procedures governing home-based working arrangements. If those policies have contractual force, the employer’s rights could be constrained. An employer must also consider whether an employee has a protected attribute (such as family/carer responsibilities or a disability) which could give rise to discrimination or adverse action claims if the employer unilaterally changes their work location. Employers may then face an employee requesting flexible work arrangements under the Fair Work Act 2009 (Cth).

If your business applies these lessons, it can, cautiously, direct employees to work from the office. However, to mitigate risk of exposure to claims, an employer should seek employment law advice before dismissing an employee for failure to comply with a direction to work from the office.

Our Workplace Law team is available to assist you.