Big changes for Victorian businesses regarding WFH and NDAs

Two significant changes are foreshadowed in Victoria for work from home (WFH) and sexual harassment non-disclosure agreements (NDAs) . . . and employers are not happy Jacinta!

WFH

If the proposed legislation passes unamended:

1. rather than keeping the national right to request flexible working arrangements under s 65 of the Fair Work Act, eligible Victorian employees would be entitled to work from home (or another place not necessarily their residence!) for up to two days per week, on days and times of their choosing, unless their employer can demonstrate that doing so is not reasonable; and

2. the entitlement will commence for employees working for non-small business employers from 1 September 2026 and for small businesses (with fewer than 15 employees) from 1 July 2027.

“Eligible Employees” would only be those workers whose work can reasonably be performed from home and would exclude: probationary employees, apprentices, true casuals, employee like workers, road transport contractors, digital platform workers, employees who are parties to a services contract and other prescribed workers (presumably left open to address at a later stage).

Significantly, (and this is perhaps the only good news for employers) the term “Eligible Employees” will also exclude employees who are entitled to make a flexible working arrangements request under s 65 of the Fair Work Act and who would like to change their working arrangements because of those circumstances. But we can see a massive ‘loophole’ already in that an applicant may simply assert that they are seeking to work from home for reasons unrelated to those circumstances related to the s 65 application. Employees seeking to engage this presumptive entitlement would be required to write to their employer setting out the days and times they intend to work from home (unless it is impractical for them to do so).

The only way an employer can ‘resist’ such an application is to prove (within 21 days) that it is not reasonable to do so which is only available after the employer can demonstrate they also considered an equivalent arrangement.

Disputes will be handled by the Victorian Equal Opportunity and Human Rights Commission (VEOHRC) in the first instance, with unresolved disputes capable of proceeding to the Victorian Civil and Administrative Tribunal (VCAT).

Our Take

Wow. This is big and we fully understand why employers are so unhappy. Businesses will be concerned about these changes because employers will be required to pay any reasonable costs necessary to enable an employee to work from home. Yes, this was not a ‘misprint’. The employer has to pay for allowing an employee to work from home. Think computer hardware and software, plus cyber security etc.

The cynic in us says that this is just a political attempt to capitalize on the obvious sentiment that Peter Dutton faced when he spectacularly had to retreat from a proposed forced return to office! Others will argue this is just the new way of working, this is ‘reading the room’ and we should all just embrace it.

The current WFH arrangements under s 65 of the Fair Work Act seem to have the appropriate balance and the decisions reflect that. Some you win. Some you lose. Forcing a loss on employers to start with seems to have ‘swung the pendulum’ way too far. Time will tell what the finished product is, but we remain very concerned that the dispute settlement mechanism, regardless, will place an already overloaded system into further chaos. Having ongoing employment disputes and uncertainty serves no one. At the moment it takes between 25 to 30 weeks to get a hearing at VCAT. That basically means an employer may be fighting a matter for up to a year before getting anywhere (and paying for it while it happens). Ouch!

Action Items

• Stay Tuned - it hasn’t happened yet. This has to work its way through parliament. Some commentators are saying that the change is “unconstitutional” and suggesting that the government don’t really want the legislation to pass. Maybe lobby your employer group and local politician?

• Review - your existing flexible work and hybrid work policies. What would the proposed changes do to them?

• Tighten your PDs – work out what positions genuinely require workplace attendance and clearly document the operational reasons why in your PD (or equivalent). Wishy washy or so called ‘agile’ PDs help no one. Evidence and reliance on workplace attendance issues will be heavily scrutinized and with the presumptive effect very difficult to overcome.

• Budget forecast – work out what it would cost you to provide WFH to employees if exercise their entitlement. For most items 2 days is irrelevant. You can’t apportion hardware or software costs for 40%.

NDAs

The start date for unique NDA restrictions in a work-related harassment matter will commence in Victoria on 1 July 2026.

In summary, this legislation:

1. prohibits the use of an NDA unless it is requested by the victim or alleged victim of the conduct;

2. requires NDA information statements be provided to a worker before a worker can enter into a NDA;

3. requires review period before a worker can sign a NDA;

4. prohibits employers from pressuring workers to enter into a NDA;

5. allows workers with NDAs to discuss the content with certain people, such as police and medical and legal professionals; and

6. permits a worker to end a NDA 12 months after giving notice to the other party.

Our Take

This one makes good sense in all but one item. This change is broadly consistent with the Kate Jenkins Respect@Work recommendations and takes into account the various reasons (e.g. privacy, closure, confidentiality etc) why some people want an NDA and some don’t. However, allowing a party to withdraw from a NDA after agreeing to one doesn’t seem right to us.

Parties to disputes generally understand that a decision to end the dispute on agreed terms is ‘forever’ and in doing so many considerations such as financial compensation, working arrangements etc are put in place. It just doesn’t seem fair that one party and only the worker can then effectively renege on ‘the deal’.

Action Items

• Take Advice - if involved in a dispute, take advice early and work out what having or not having a NDA means for the situation.

• Train - your managers on this change. For many, they may be surprised that a NDA may no longer be the ‘usual’ way in which a dispute in resolved. The personal impact may be significant and should have a greater deterrent effect.

Edge Legal

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