Precision and proof — lessons from the FWC on enforcing return-to-office mandates

The Fair Work Commission (FWC) has made recent decisions regarding the competing issues of work-from-home (WFH) and employer mandates to return to the office. These decisions show that FWC decision-makers will place significant weight on the facts of each WFH related dispute. In the absence of any significant precedent or legislation providing a right to WFH, each case will be determined based on an assessment of the merits of each party’s position.

This case note explores two recent FWC decisions:

1.  Johnson v PaperCut Software Pty Ltd [2026] FWC 178; and
2. Chandler v Westpac Banking Corporation [2025] FWC 3115.

These decisions show employers that:

• control over an employee’s WFH rights can be managed through well-drafted employment contracts; and
• changes to individual WFH rights for employees require careful consideration.

Johnson v PaperCut Software Pty Ltd

Background

Johnson and PaperCut entered into a contract of employment around the time of the Victorian Government WFH mandates, and it stated:

“Clause 3. Duties

The Employee agrees to carry out the Duties during the Employee’s employment with PaperCut and to:

a) perform the Duties and comply with such reasonable and lawful directions and all policies, rules and regulations from time to time provided by PaperCut…

Clause 7. Mobility

The Employee is permitted to work from their personal residence in item 1 of Schedule 1 in line with relevant PaperCut policy. The Employee may be required to work at other locations from time to time.”

In or around August 2023, and following the end of the Victorian Government WFH mandates, PaperCut, after consultation with its staff (including Johnson), trialled before ultimately commencing the PaperCut policy. PaperCut aimed to transition all staff to three full days of in-office attendance by January 2025.

In December 2024, Johnson informed PaperCut that he would not comply with the PaperCut Policy as it was in breach of Clause 7 ‘Mobility’  of his employment contract. Johnson did not make a flexible work arrangement (FWA) request under section 65 of the Fair Work Act 2009 (Cth) (Act).

Following multiple meetings and written warnings from PaperCut to abide by the PaperCut policy, Johnson was dismissed by PaperCut on 19 June 2025 for failure to comply with a legal direction.

There was no dispute between the parties that Johnson did not comply with the directions given to him by PaperCut. Rather, Johnson alleged that the directions given to him by PaperCut to comply with its hybrid work policy contravened his employment contract and were unlawful.

The decision ultimately fell to Commissioner Connolly’s interpretation of the contract and whether PaperCut’s enforcement of the PaperCut policy contravened the contract.

Johnson’s position

Johnson argued, among other things, that the words “permitted […] in line with relevant policy” under clause 7 of the contract did not place any limits on his right to work from home and that the clause does not contemplate this policy changing. Further, he argued any changes to the PaperCut policy requiring in-office attendance would not be lawful as it would be inconsistent with the contract.

PaperCut’s position

PaperCut argued that Johnson agreed under the contract to “comply with such reasonable and lawful directions and all policies, rules and regulations from time to time provided by PaperCut”. PaperCut argued that at the time the contract was made, Johnson was permitted to WFH, subject to two conditions. First, the permission was subject to the PaperCut Policy and secondly, that Johnson may be required to work at other locations.

Decision

Commissioner Connolly found the direction given to Johnson by PaperCut involved no illegality. The FWC found that a reasonable person, when reading the contract objectively, would find that PaperCut permitted Johnson to WFH at the time the contract was made. The FWC found that the inclusion of the word ‘permitted’ by PaperCut in the contract meant WFH was something PaperCut allowed Johnson to do; it did not afford him a right he was entitled to without limitation.

The result was that Johnson’s dismissal was not unfair, and he was not awarded compensation. Johnson has now appealed the decision. The hearing is set to take place in April 2026.

Chandler v Westpac Banking Corporation

Background

Chandler was employed by Westpac in 2002 on a part-time contract across five days per week on the basis that her employment would be performed permanently from Westpac’s corporate office in Sydney.

In 2017, Chandler began working remotely, where she was only required to attend the Sydney office one day per week. Between the period of mid-2018 until August 2022, Chandler worked permanently remotely. In August 2022, Chandler and Westpac entered an agreement whereby she was required to attend the Sydney office one day per month.

In 2021, Chandler and her partner moved to a residence in Wilton, around two hours’ travel from Westpac’s Sydney corporate office.

Westpac’s Hybrid Working Model (Westpac Policy) stated that employees are required to attend a corporate office two days each week.

Chandler made a Flexible Work Arrangement (FWA) request to Westpac in January 2025 that she be allowed to WFH to allow her to care for and attend school drop-offs for her two six-year-old children. Following the refusal by Westpac of that request, Chandler proposed to work from the Westpac Bowral branch two days per week rather than the Westpac corporate office in Sydney. Westpac refused that request.

Decision

In our article titled ‘Navigating the complex path of refusing flexible working arrangement requests’, we highlighted that the Act places strict requirements on employers when they receive a FWA request.

The FWC found that Westpac failed to comply with the requirements under section 65A of the Act. Among other things, it did not respond to Chandler within 21 days of her making the request, nor did it discuss the request with Chandler. Deputy President Roberts stated that the reasons Westpac provided to Chandler for refusing her request were “cursory at best”.

Westpac argued that Chandler’s request would result in a significant loss in efficiency and productivity that would impact customer service. It further argued that the Westpac Policy was ‘measured’ and was needed to effectively manage its large workforce.

The FWC ultimately rejected Westpac’s arguments and found that, whilst working remotely for a number of years, Chandler and her team had regularly met or exceeded deadlines and that Chandler had high individual performance ratings.

Deputy President Roberts found that “Westpac has permitted remote working arrangements for [Chandler] over an extended period” and that a majority of Chandler’s team members work interstate, resulting in a majority of team interactions, such as team meetings, occurring online.

The FWC held that Westpac did not rely on a reasonable business ground for its refusal of the request and ordered that Westpac grant Chandler’s flexible working request.

Lessons for employers

As foreshadowed, while these decisions by the FWC do not embed a WFH right for employees, the decisions also don’t allow for employers to unilaterally remove WFH arrangements without considering FWA requests if made, or the impacts that changes to WFH policies may have on individuals.

Employers should ensure that:

• Employment contracts are drafted with appropriate precision with respect to the requirement for employees to comply with company policies, as varied from time to time.
• Employment contracts are drafted to ensure WFH is only ‘permitted’, and it is at the discretion of the employer.
• FWA requests are responded to appropriately, with attention given to the requirements under section 65A of the Act.
• If they exist, WFH policies are discretionary, but when applied, they are applied consistently across the relevant workforce.

Contact us

If you are an employer seeking legal advice regarding WFH policies and other FWA requests, please contact a member of our Workplace Relations group.