Failure to comply with workplace flexibility policy sees unfair dismissal case tossed

An employee’s unfair dismissal case was dropped after he was fired for not complying with a “lawful and reasonable” directive from his employer to work three days in the office.

Richard Johnson commenced employment with Victoria-based software provider, PaperCut Software, on 4 April 2022 and was terminated on 20 June 2025.

Johnson made an unfair dismissal application claiming that his termination was unreasonable.

The hearing’s point of contention was whether PaperCut’s directive to relocate Johnson’s primary location of work from his personal residence to the office was “lawful and reasonable”.

On 19 January 2026, Fair Work Commission commissioner Scott Connolly upheld Johnson’s termination, finding that Johnson had failed to comply with company policy despite being given numerous opportunities to do so.

Hybrid work policy

During the hearing held on 27 October 2024, the commission noted that on 25 February 2022, Victoria’s government removed its strong recommendation for workers to primarily work from home, encouraging a return to the office, as the nation emerged from the pandemic.

The commissioner heard that Johnson’s employer allowed its workers to “work from both home and employer premises as possible and appropriate as a hybrid workplace”.

The commission heard that PaperCut developed and implemented a return to hybrid work policy and model after staff engagement and consultation, and hybrid work trials.

The policy was formally introduced in August 2023, prescribing a staged transition for all relevant employees to work three days a week in the office by January 2025.

Contract variation proposal

On 5 August 2022, PaperCut sought to vary Johnson’s contract, to clarify that his primary place of employment was the office and he would be permitted to work from home “in line with relevant PaperCut policy”.

Johnson did not accept the proposed variation, giving evidence that previous managers told him that he “did not have to” come into the office, while not intentionally, allowing him to work remotely.

Five meetings

On 19 December 2024, Johnson attended a meeting during which he was advised by his employer that his work location would change from his personal residence to the office, effective from 1 January 2025.

The hearing heard that five meetings were held between Johnson and PaperCut between 13 January 2025 and 19 June 2025, and during this time, correspondence was exchanged between the solicitors for the parties in an attempt to resolve Johnson’s non-attendance in the office.

Through these meetings, PaperCut directed Johnson to follow the return to office transition plan, which provided that he work in the office three days per week.

After seeking legal advice, on 16 January 2025, Johnson told his employers that he was of the view that this directive was a breach of his contract of employment.

The commission heard that throughout all meetings, Johnson maintained that their directive was not lawful and on 30 May, his solicitors reiterated this position to PaperCut and were seeking that no further disciplinary action take place based on the directive.

Warning letters

PaperCut submitted that following their meeting on 5 March 2025, Johnson did not attend the office as directed, leading to a warning letter being issued on 20 May 2025.

This letter advised him that “if he did not meet the three days in office requirement over the next three weeks, he would face disciplinary action up to and including the termination of his employment”.

Commissioner Connolly heard that Johnson had only attended the office for one day after 20 May 2025.

Following another meeting on 11 June 2025, Johnson was issued a final warning letter enforcing that he was to attend the office three days per week “immediately and consistently” from the next day (12 June 2025) – reinforcing that failure to do so may lead to termination.

Johnson attended the office for less than three days over the next week.

One final meeting was held on 19 June 2025, where Johnson was dismissed for failure to comply with his employer’s work policy as directed.

The following day (20 June 2025), his employment was terminated.

‘Arbitrary and capricious’ or ‘reasonable’

Johnson submitted that PaperCut’s direction for him to work three days per week was “not reasonable because it was arbitrary and capricious and not made on reasonable business grounds”.

However, the commission was satisfied that his employer’s directive was lawful and was within the scope of his employment contract.

Johnson’s employment contract contained a clause which provided that he was “permitted” to work from home “in line with relevant PaperCut policy”. During the hearing, he gave evidence that he was of the belief that this meant he was able to perform his work remotely.

Commissioner Connolly looked into the definition of the word “permitted”, finding that in the context of Johnson’s contract, working from home was something that his employer “allowed” him to do, and was not, as Johnson believed, a “right” that he was entitled to without caveat.

“Mr Johnson was required to comply with the reasonable directions of his employer. He refused to do so. As a result, he was dismissed”, the commissioner said.

Upon consideration of all evidence presented to her, the commissioner found that the dismissal was not harsh, unjust, or unreasonable and hence was not unfair – dismissing the application.

The case citation: Mr Richard Johnson v PaperCut Software Pty Ltd (U2025/11325).