World’s first work-from-home law delayed in Australia after business backlash

The world’s first law giving eligible workers a legal right to work from home has been delayed in Australia’s Victoria state after fierce opposition from business groups and calls for further consultation.

The legislation was due to take effect on September 1, giving eligible workers whose jobs can reasonably be performed remotely the right to work from home for two days a week. Its implementation has now been pushed back to July 1, 2027.

Victoria Premier Ben Carroll announced the delay on Tuesday, just weeks before the law was due to come into force. He said the government would continue consulting the business community and intended to pass the legislation before the state’s November election.

“I want to be very clear – I support work from home, I support flexible work. It is good for working families,” Carroll told reporters in Melbourne.

“But equally though, we need to make sure that our economy, everyone, knows it’s a partnership between working families and the business community and the government.”

What did Victoria’s work-from-home law propose?

The proposed legislation, introduced under former Labor Premier Jacinta Allan, would amend Victoria’s Equal Opportunity Act to establish a legal right to work from home for two days a week where it is reasonable to do so.

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The proposal would cover full-time, part-time and regular casual employees whose jobs can be performed remotely. It would also apply regardless of the size of the workplace.

Victoria had described the legislation as a world-first move to make flexible work a legal right rather than something that depends solely on an employer’s discretion.

Smaller businesses were already due to receive additional time to comply. Workplaces with fewer than 15 employees would have until July 2027 to prepare for the changes.

For larger employers, however, the law was scheduled to take effect on September 1 this year.

Why are businesses opposed?

Business groups have argued that making work-from-home rights part of the law would increase regulatory costs and make it harder for companies to manage their workforces.

The Victorian Chamber of Commerce and Industry warned that the proposed rules could raise costs, affect hiring and encourage jobs and investment to move to other Australian states.

The Council of Small Business Organisations Australia also criticised the proposal, arguing that it would create additional compliance requirements for small businesses.

A wider group of business organisations has called on the Victorian government to abandon the legislation altogether. They argue that employers and workers should be able to negotiate flexible working arrangements without a new legal entitlement.

The Business Council of Australia has similarly argued that workplace flexibility already exists and that Victoria should instead focus on economic recovery, job creation and improving living standards.

Why is the law being delayed now?

The delay comes after a change in Victoria’s leadership and ahead of a closely watched state election in November.

Carroll replaced Allan as premier last month and has sought to reset the Labor government’s relationship with the business community.

The government faces a stronger challenge from conservative and right-wing opponents, making business confidence and the state’s economic performance politically sensitive issues.

Carroll has nevertheless said he remains committed to flexible work and intends to retain the legislation while allowing more time for consultation with businesses.

He has described the relationship between workers, businesses and government as a partnership and said he wants Victoria to remain an attractive destination for businesses and investors.

Melbourne’s office problem

The debate has particular significance for Melbourne, which has struggled to bring employees back to offices since the Covid-19 pandemic.

Victoria endured some of the world’s longest Covid-19 lockdowns, accelerating the adoption of remote and hybrid working.

Melbourne now has the highest office vacancy rate among Australia’s capital cities, adding to pressure on policymakers to revive activity in the city centre.

The city is home to major employers including miners BHP Group and Rio Tinto, as well as lenders National Australia Bank and ANZ Group Holdings.

Business groups have argued that a legal right to work from home could further reduce demand for office space and hurt businesses that depend on workers returning to central Melbourne.

What happens next?

The Victorian government has not abandoned its proposed work-from-home rights.

Instead, it has scrapped the September 1 start date and pushed implementation back to July 1, 2027.

Carroll said the government would continue discussions with the business community and remained open to changes to the legislation.

That leaves the government facing a difficult balancing act: protecting workers’ access to flexible working arrangements while addressing employers’ concerns over costs, regulation and the impact on Victoria’s economy.

The decision also highlights the broader global debate over the future of work. While many companies have adopted hybrid working arrangements since the pandemic, governments and employers continue to disagree over how much flexibility workers should have as a legal right.

For Victoria, the question is no longer simply whether employees should be allowed to work from home. It is whether that flexibility should become an enforceable right — and how far governments should go in making it one.

With inputs from agencies.