FWC confirms hybrid work direction may be lawful and reasonable

When an unfair dismissal claim is made under the Fair Work Act 2009 (Cth), the Fair Work Commission (FWC) must determine whether there was a valid reason for the dismissal related to the employee’s capacity or conduct. Where a dismissal arises from an employee’s failure to comply with an employer’s direction, the FWC must consider whether the direction was lawful and reasonable, having regard to the proper construction of the employment contract and the surrounding circumstances in which the direction is given.

In Johnson v PaperCut Software Pty Ltd (2026), the FWC considered whether an employee’s refusal to comply with an employer’s hybrid work policy constituted a valid reason for dismissal. The policy required office attendance 3 days per week, and the employee’s contract permitted working from home subject to company policy.

The FWC concluded that the employee’s repeated failure to comply with a lawful and reasonable direction constituted a valid reason for dismissal.

In determining this, the FWC took into account the following:

where an employee’s employment contract permits the employee to work from home in line with company policy, this does not confer an unconditional or ongoing right to work remotely;
where an employment contract provides that an employee may be required to work at other locations from time to time, a direction to attend the office may fall within the scope of the contract; and
a direction to attend the office pursuant to a hybrid work policy may be both lawful and reasonable where:
- the policy is developed following employee consultation;
- the transition is staged over time; and
- the employee is given notice of, and multiple opportunities to comply with, the direction; and
an employee’s subjective belief of his contractual entitlement to work remotely does not render a direction unlawful or unreasonable.

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