Hybrid work is facing new pressures
Since the COVID-19 pandemic, many workplaces are encouraging employees to return to the office to reinforce the importance of collaborative, face-to-face work and promote a positive workplace culture.
As a result, many workplaces are implementing and re-examining their internal hybrid work models and flexible working policies to ensure they align with the current work landscape post-COVID-19.
As organisations reassess hybrid working models, disputes are increasingly being heard before the Fair Work Commission.
The outcomes of these matters provide timely guidance on how employment practices are being scrutinised and where risk is emerging from an EPL perspective.
Two recent decisions, Johnson v PaperCut Software Pty Ltd [2026] FWC 178 (Johnson v PaperCut)and Chandler v Westpac Banking Corporation [2025] FWC 3115 (Chandler v Westpac), illustrate how the Commission is approaching flexible work disputes and, importantly, what this means for employers navigating this shifting landscape.
Johnson v PaperCut: When employer direction prevails
In Johnson v PaperCut, the Commission considered an unfair dismissal claim brought by an employee who refused to comply with a direction to attend the office three days per week. The employee argued that his contract entitled him to work from home on a full-time basis and that the employer’s directive was inconsistent with those terms.
The Commission ultimately found in favour of the employer.
Central to its reasoning was the fact that PaperCut had implemented a clearly communicated hybrid working policy and had provided employees, including Mr Johnson, with sufficient time and opportunity to transition back into the office.
The evidence demonstrated repeated and consistent communication regarding expectations, as well as clear warnings that failure to comply could result in termination.
Importantly, the employee had not made any formal request for flexible work or identified personal circumstances that would justify an exception to the policy.
The Commission also placed significant weight on the contractual framework.
While the contract contemplated that the employee may work from home, this was expressed as a permission rather than an absolute entitlement.
The employer retained the ability to direct where work was to be performed, provided those directions were lawful and reasonable. In this context, the return-to-office requirement was found to fall squarely within that scope.
This decision reinforces that flexible work arrangements will not be treated as an inherent right unless expressly guaranteed. They remain subject to operational requirements, provided the employer’s approach is reasonable, well-communicated and consistently applied.
Chandler v Westpac: When process determines outcome
By contrast, Chandler v Westpac demonstrates the risks that arise when process and reasoning fall short.
In that matter, the employee sought a flexible working arrangement which was ultimately refused by the employer. The issue before the Commission was whether that refusal was based on reasonable business grounds, as required under the legislative framework.
The Commission found in favour of the employee, concluding that the employer had not sufficiently substantiated its decision.
While operational concerns were raised, there was a lack of detailed evidence demonstrating how the requested arrangement would adversely impact the business. The process undertaken was also found to be lacking in substance, with insufficient engagement and consideration of the employee’s circumstances.
This decision highlights that employers cannot rely on broad or generic assertions when refusing flexible work requests.
There must be a demonstrable and evidence-based rationale, supported by a genuine and meaningful assessment process.
Without this, employers expose themselves to challenge, even where there may be legitimate operational concerns.
Lessons from the FWC
Taken together, these decisions underscore a consistent approach by the Commission. Outcomes are dictated by the quality of the process, the clarity of communication, and the evidence available to support the position taken.
From an EPL risk perspective, these developments are significant.
Many claims do not turn on complex legal arguments but instead on whether the employer followed a fair and defensible process.
Gaps between policy and practice, inadequate documentation, and failure to properly engage with employees can potentially increase exposure risks.
EPL claims on the rise and the role of claims advocacy
The Commission has seen a significant increase in filings in recent years, particularly in unfair dismissal and adverse action claims.
In the Commission President’s statement regarding reforms in November 2025, he referred to an increase in filings in 2024-25 of 24% above the 5 year average.
As a result of the increased workload on the Commission, changes have been introduced in respect of adverse action claims involving dismissal.
The Commission now requires more detail in applications regarding contraventions, any jurisdictional issues to be raised and clearly articulated earlier by employers and any request for representation to be accompanied by detailed reasons.
Early notification to insurers and appropriate legal advice assists employers to be in the best position to respond to these claims.
Lockton’s financial lines claims advocacy team take an active role stepping in early to better protect our clients’ position, driving the claim and facilitating proactive engagement with insurers to help deliver the best possible coverage outcome. If you’d like to discuss EPL best practice further, we’re here to help.
Contents of this publication are provided for general information only. It is not intended to be interpreted as advice on which you should rely and may not necessarily be suitable for you. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. Lockton arranges the insurance and is not the insurer. While the content contributors have taken reasonable care in compiling the information presented, we do not warrant that the information is correct. Any insurance cover is subject to the terms, conditions and exclusions of the policy. For full details refer to the specific policy wordings and/or Product Disclosure Statements available from Lockton on request.
