On 27 August 2026, a Full Bench of the Fair Work Commission (FWC) proposed Australia's first dedicated working from home clause for the Clerks – Private Sector Award 2020 (Clerks Award).
The proposal responds to the current difficulties employers and employees face when applying traditional award provisions to remote working arrangements. While the clause is currently confined to the Clerks Award, the proposal and discussion over it may foreshadow broader award reform in sectors where remote and hybrid work arrangements are common. If implemented, it is likely to result in more employment disputes, triggering claims under Employment Practices Liability (EPL) policies. This article discusses the issues employers may face and some practical steps employers can take to prepare for the likely changes.
Submissions on the draft clause closed on 17 September 2026 and its final form may still change. However, we expect it will be implemented in largely the current proposed form.
Does the proposed clause give employees a right to work from home?
The proposed clause would not create an entitlement to work from home.
The FWC rejected a proposal that would have expressly required employers to approve requests unless an employer had reasonable business grounds to refuse the request. Instead, the proposed clause adopts a facilitative model, allowing employers and employees to agree on working from home arrangements that suit their circumstances. Employers would continue to determine an employee's usual place of work and retain the ability to approve or refuse requests.
What are the key features of the proposed working from home clause?
The proposed clause would allow an employee to request, and an employer to approve, a working from home arrangement.
The key features are:
- Requesting a work from home arrangement – an employee may make a written request specifying the proposed working from home days and location.
- Flexibility in hours and breaks – the employer and employee may agree to vary certain ordinary-hours and break requirements and utilise existing award provisions concerning make-up time, spread of hours, shiftwork and time off instead of overtime.
- Written agreements and record keeping requirements – the arrangement must be recorded in writing, including the working from home days, location, award variations, commencement date and termination arrangements.
The agreement must be provided to the employee and retained as a time and wages record.
Employer obligations under the proposed working from home clause
Section 65 flexible work requests still apply
The proposed clause would sit alongside existing rights to request flexible working arrangements under section 65 of the Fair Work Act 2009 (Cth) (FW Act).
Eligible employees may still make requests under section 65. Where a request engages both provisions, employers should ensure they comply with the section 65 process, including consultation requirements, written responses and any requirement to establish reasonable business grounds for refusal.
A dedicated working from home clause would not displace existing obligations concerning hours of work, overtime, breaks, record keeping or the right to disconnect.
Working from home health and safety obligations
Employers should also remember that an employee's home is a workplace for health and safety purposes. This fact engages an employer’s duties to eliminate or reduce risks to physical and psychological health and safety so far as is reasonably practicable. Working from home arrangements should also address issues such as availability, hours of work, overtime recording, equipment, expenses, confidentiality, cybersecurity and appropriate review mechanisms.
Record keeping and underpayment risks
Employers must properly document these arrangements. Informal or undocumented arrangements can create significant risk. Breaches relating to hours, overtime, breaks and record keeping may lead to underpayment claims, penalties, regulatory action and associated legal costs.
Discrimination and flexible work requests
Employers should also ensure decisions concerning working from home requests are lawful and non-discriminatory, particularly where requests to work from home or have other flexible work arrangements involve caring responsibilities, disability or another protected attribute under state or federal discrimination law.
Five practical steps employers should take now
While the proposal has not yet been finalised, it reflects an increasing focus on ensuring remote work arrangements operate within a clear compliance framework and are appropriately documented.
Employers should now consider:
- auditing existing working from home arrangements, hours and records;
- reviewing policies and template agreements;
- determining when requests may also engage section 65 of the FW Act;
- documenting approval and refusal decisions; and
- implementing review mechanisms for ongoing arrangements.
What are the implications for employment practices liability (EPL) insurers?
More rights to work from home may lead to more claims under EPL policies involving allegations of discrimination, contraventions of the general protections provisions of the FW Act, or alleged contraventions of section 65 of the FW Act where no monetary relief or only civil penalties are sought, raising coverage and allocation issues. EPL underwriters may wish to assess whether prospective insureds have documented working from home policies, compliant time and wages records and clear processes for assessing and documenting requests, as deficiencies in these areas may indicate broader employment compliance risks.
Need advice on working from home policies or compliance obligations?
For assistance reviewing working from home arrangements, updating workplace policies or preparing compliant working from home agreements, please contact Gilchrist Connell’s Workplace Law team.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
[View Source]
