The Victorian Labor government has continued with its ‘world first’ legislation with its recently announced work from home laws joining the machete laws as ‘world firsts’.

In a press release issued this week, Premier Allan enthusiastically stated that if you can do your job from home, you’ll have the right to do so – no matter the size of your workplace.

This is the first major update into the design of the Allan Labor government’s world first work from home laws. And this update is all about fairness. The largest-ever Victorian government survey, with 37,485 responses, found three-quarters of employees said the right to work from home was ‘extremely’ important to them.

The announcement poses some critical questions which will need to be grappled with before the draft legislation comes before the Victorian Parliament in July this year followed by a staggered implementation date over 12 months depending on the size of the business.

The first is to determine who can ‘reasonably work from home’ – the expected statutory test. The categories of workers who can’t do their job from home are obvious: retail workers, emergency workers, hospitality workers, teachers, factory workers, tradespersons… Sadly, there aren’t as many people doing these jobs in Victoria nowadays as the real productive economy has been shredded and at the same time the Victorian public service ranks have ballooned with 75 per cent of workforce growth in Victoria in the public sector under the Andrews and Allan governments.

Then there are people who can reasonably do their jobs from home. These include the so-called ‘laptop classes’ who spend much time communicating with coworkers and supervisors and participating in internal team meetings with little outward-facing activity. This category of worker can reasonably work remotely. These workers typically occupy management and administrative roles in big business and government and already work from home two days or more a week and hence don’t need statutory protection.

There are also a range of knowledge workers and professionals who work in various businesses large and small such as accounting, media, law, consulting, education, and in creative fields who can and do already work from home and are either self-employed or do so with the concurrence and cooperation of their employers as part of the usual work place flexibility that sensible employees and responsible workers sort out amongst themselves in competitive markets without the need for intrusive and interfering state dictates. This is the environment I operate in. It works pretty well and continues to evolve with rapid technology and other improvements in hybrid work practice efficiencies.

So, who are these new laws seeking to protect?

It must be those who can work from home, but who are being forced under the yolk of oppressive employers to come into work when they should be working from home. This assessment won’t be made by employers, but by the government based largely on employees’ views, and if necessary, by a Tribunal or Court who will decide from the bench based on affidavits and legal submissions, whether they can do their job working two days a week from home. The legislation is not available yet but is expected to include a default entitlement to two out of five days Work-From-Home (WFH) irrespective of the size and type of business and a shifting of the onus to show ‘unjustifiable hardship’ onto the employer arising from the WFH entitlement.

In practice, will the reasonableness test be whether the worker can muddle through and do their job, albeit sub-optimally, or perform to an equivalent standard of performance and productivity as they can at the workplace? For some jobs the difference between poor, adequate, and good might be indiscernible and is not venue dependent, but in many businesses the differences are significant. It’s a fair bet an employer might have an informed view on this question.

The press release also says the reforms ‘are all about fairness’. Really?

How is fairness assessed and from whose perspective?

Is it solely from the workers’ perspective who hasn’t taken business risk and isn’t ultimately responsible for the business and its short, medium, and long-term viability, or from the business owner/employers’ viewpoint? Is it by reference to workers who can’t work from home because of the nature of the job they have, including their role within the same enterprise? Is it by reference to customers, suppliers, and other stakeholders who might stand to be adversely affected by a business having its workforce working from home two out of five days?

Comparing workers who work at a big bank or Commonwealth department with someone who works in a small business, as the press statements do, is facile. Big businesses have hundreds or thousands of workers who can be rostered in a way to cover in-office and out-of-office situations and have the depth of pocket to invest in technology and other hybrid work enablers. Critically, they are often insulated from competition as they are either government or private monopolies and don’t lose business through inefficiencies or service default, or they operate in oligopolistic industries with a small number of players who operate similarly on an even playing field. Small businesses, in contrast, operate in fragmented markets and need to be competitive, agile, and responsive to their customers or they go broke. Often the reward and income differential between owners and workers in small businesses is very slim with many business owners essentially earning a wage. How does ‘unjustifiable hardship’ get assessed in this situation? There are also pros and cons for workers who choose work in small business or big business. Workers make these choices based on a mix of remuneration, flexibility, and security considerations. Grafting a one size fits all WFH law over complex labour markets is bad policy.

The proposed laws have been roundly criticised as being anti-business and adding to an already high regulatory burden on small business. Victoria is already seen as a highly undesirable place to do business and invest, and these laws are unlikely to encourage further investment and led to increased employment.

We’ve seen since Covid significant increases in WFH and hybrid arrangements. This has delivered a mix of benefits and challenges. The jury is still out on whether this trend makes for better or worse productivity and international competitiveness. Time will tell. Even if the ultimate outcome on a macro and longer-term analysis is one of net benefit, every business must be assessed on its own merits and every worker must too. Some workers, depending on their experience, age, diligence, and critically their roles, can work equally effectively from home but some can’t. The same goes for owners, bosses and managers. This one-size-fits-all approach is intrusive and paternalistic and will likely dampen investment and enterprise and force flexibility in places where it’s not needed or not sensible.