Victorian WFH proposal will ‘steamroll’ small businesses, say advocates

The Victorian government’s proposal to legislate a legal right for employees to work from home two days a week has received significant backlash from the small-business community.

Editor’s note: This story first appeared on HR Leader’s sister brand, Accountants Daily.

The Council of Small Business Organisations Australia (COSBOA) has expressed strong opposition to the Victorian government’s work-from-home proposal for “lack of consultation”.

On Saturday, 2 August, the Victorian government announced it would move to introduce legislation that granted employees the right to work from home as it “worked for families”.

In a statement, Premier Jacinta Allan said: “Under this proposed law, if you can reasonably do your job from home, you will have the right to do so for at least two days a week – public sector or private sector.

“Working from home works for families, and it’s good for the economy.”

Allan also attributed the new legislation to popularity, saving families money, cutting congestion, encouraging more people to work and benefiting business, and was set to be scheduled for introduction to Parliament in 2026.

The move has already been labelled as “pure political theatre”.

Now, COSBOA has expressed strong opposition to the proposal and “condemned” the government’s failure to meaningfully consult with small-business representatives before announcing the “far-reaching policy”.

Matthew Addison, chair of COSBOA, said there were five main concerns the body had flagged, which were likely to have adverse effects on small businesses in Victoria, putting them under increased pressure in an already tough environment.

“This is yet another example of the Victorian government steamrolling small businesses without proper consultation,” he said.

“Small businesses are the backbone of Victoria’s economy, employing millions of Victorians, yet once again, we’ve been completely sidelined in the development of workplace policy that will fundamentally impact how we operate.”

According to COSBOA, the new legislation raised concerns such as an inadequate consultation process, disproportionate impacts on small businesses, a one-size-fits-all approach, economic uncertainty and that workplace flexibility already existed.

COSBOA said that it was excluded alongside other peak small-business bodies from the initial policy development phase, which represented a serious failure in the government’s consultation obligations to the small-business community.

It was also noted that the proposed legislation appeared to ignore the diverse nature of Victorian businesses, from manufacturing and retail to hospitality and professional services.

Many small businesses simply could not accommodate remote work arrangements due to the nature of their operations, customer service requirements, or security considerations.

In addition to this, Addison said the current Fair Work legislation already provides employees with the right to request flexible working arrangements, which include working from home.

“Small businesses regularly accommodate these requests where operationally feasible. Why is the Victorian government seeking to add complexity to an arrangement that already exists under the Fair Work Act?” he said.

“While we support workplace flexibility where it makes business sense, mandating a blanket right to work from home two days per week is regulatory overreach that will harm small-business competitiveness. This policy should be evaluated based on reliable evidence.”

COSBOA revealed it was urging the Victorian government to immediately engage in meaningful consultation with small-business peak bodies before proceeding with any legislation, conduct a comprehensive regulatory impact assessment specifically examining effects on small and medium enterprises and consider exemptions or modified arrangements for SMEs with fewer than 50 FTE employees.

It also called for the Victorian government to acknowledge that existing federal work laws already provided adequate flexibility mechanisms.

Addison said small businesses needed certainty and support, not additional red tape imposed without consultation.

“We urge the Premier to step back from this rushed approach and engage properly with the small-business community that creates jobs and drives economic growth across Victoria,” he said.