Victoria a ‘litmus test’ for new workplace laws

Legal and professional concerns remain as Victoria prepares to become the first jurisdiction in Australia to legislate the right to work from home.

The proposed legislation, which outlines that any employee with the capacity to work from home will be able to do so two days a week, regardless of the size of the business they work for, has received its fair share of criticism.

According to business groups, Victorian productivity and investment could be crippled; similarly, legal experts warn that employment lawsuits will put pressure on already overwhelmed systems.

Data released late last year revealed the number of lodged applications with the Fair Work Commission in 2024–25 increased by almost 50 per cent compared to 2020–21, which is 24 per cent higher than the five-year average.

In addition, a 25.5 per cent increase in general federal law filings and a 64 per cent increase in filings in the migration jurisdiction were identified within the Federal Circuit and Family Court of Australia.

Tinashe Makamure, special counsel in the insurance and health practice at national law firm Barry Nilsson, outlined that the entitlements have “family and care responsibilities at its core, the protection for which is already enshrined in the Equal Opportunity Act 2019 and further bolstered by the recent amendments to the Fair Work Act 2009 – enabling the Fair Work Commission to deal with disputes relating to flexible work arrangements”.

He said: “While we will have to wait and see what form the legislation takes, it lends itself to forum shopping with scope for new general protections and discrimination claims.”

According to Makamure, performance management will also present an issue. Makamure outlined that the direction of underperforming employees to work in the office as a means of management is a common practice, and further suggested that the workplace amendments “run the risk of causing legitimate performance and conduct measures to be unlawful”.

“As a flow-on effect, any further increase in workplace-based claims will likely push up the cost of Employment Practices Liability Insurance (EPLI) policies, creating yet another financial burden for business owners and employers in what is an already heavily regulated and complex regulatory environment,” he said.

This follows strong criticism from a variety of groups; as reported recently, the Victorian Regional Chamber Alliance (VRCA) noted the loss of autonomy small businesses face under the projected legislation and suggested it was an example of “over-governance that further muddles the structure of industry”.

Makamure said: “If this proposal becomes law in Victoria, I expect it’ll only be a matter of time before other states and territories explore similar legislative reforms, so it’s an issue that all employers need to monitor and potentially seek professional advice on as 2026 progresses.”

The bill is planned to be introduced to the Victorian Parliament in July.