Hired to work from home, sacked for refusing three office days

What happened

Richard Johnson started work with PaperCut, a Melbourne software company, on 4 April 2022. His 28-page contract said he was 'permitted to work from their personal residence … in line with relevant PaperCut policy', and that he 'may be required to work at other locations from time to time'. Another clause required him to follow reasonable and lawful directions and 'all policies, rules and regulations from time to time provided by PaperCut'.

Mr Johnson gave evidence that he had been told during recruitment the job would not need office attendance except for occasional workshops or events. In August 2022 PaperCut asked him to agree to a variation naming the office as his place of work. He did not agree, then or later. PaperCut had never raised any concern about his conduct or performance.

Meanwhile PaperCut consulted its staff, including Mr Johnson, and in August 2023 introduced a hybrid work policy that phased in office attendance, reaching three days a week by January 2025.

The direction and the warnings

On 19 December 2024 PaperCut told Mr Johnson his primary work location would change from his home to the office from 1 January 2025. He objected that this breached his contract, and the change was put on hold. On 13 January 2025 PaperCut said it had legal advice it was not a breach and that he must comply by 1 February. Mr Johnson got his own advice, which said the opposite, and gave it to PaperCut, which held its position.

At a meeting on 5 March 2025 Mr Johnson confirmed he would not follow the transition plan or the hybrid policy. On 20 May he was given a final warning; he attended the office only one day after that. On 11 June he was told he would be dismissed if he did not attend three days a week starting the next day, 12 June. He did not, and was dismissed at a meeting on 19 June; his employment ended the next day. He brought an unfair dismissal claim, seeking reinstatement.

The legal test

In deciding whether a dismissal was 'harsh, unjust or unreasonable', the Commission must take into account the matters listed in s 387 of the Fair Work Act 2009 (Cth). The key question in this case was whether there was a valid reason related to the worker's conduct or capacity, which means a reason that is 'sound, defensible, or well founded'. Others include whether the worker was told the reason and could respond.

Refusing an employer's instruction can be a valid reason, but only if the instruction was lawful and reasonable. A direction is lawful if it falls within the scope of the employment contract and involves nothing illegal. Whether it is reasonable is a question of fact and balance, looking at the contract and all the circumstances.

Mr Johnson admitted refusing to attend the office. His case was that the direction was unlawful because his contract gave him a right to work from home, so refusing it could not be a valid reason. He also argued that dismissal was disproportionate for a good performer, and that PaperCut could have asked a court to decide what the contract meant.

What the Commission decided

Commissioner Connolly read the contract objectively, as a reasonable person would. The key word was 'permitted'. Working from home was something PaperCut 'allowed' him to do. The words 'in line with relevant policy' made that permission conditional, so if the policy changed, working from home might no longer be allowed. Because the words were not ambiguous, what Mr Johnson said he was told at recruitment, and PaperCut's attempts to vary the contract, did not change their meaning.

The direction was therefore lawful. It was also reasonable: PaperCut had consulted staff, phased the change in, explained its position and given Mr Johnson many chances and time to comply. The Commissioner rejected the argument that an employer must justify to each worker why it wants them at a particular workplace. The fact that seven other employees were allowed to work from home did not change the result.

The Commissioner accepted that Mr Johnson genuinely believed he was right, but found there was no sound basis for that belief. His refusal left PaperCut with 'no other real or reasonable option' but to end his employment, and he had been warned clearly what would happen. The dismissal was not harsh, unjust or unreasonable, and the application was dismissed.

What this means for you

This case does not mean every worker can be ordered back to the office; it turned on one contract's wording. Read your contract closely: words like 'permitted', 'in line with policy' or 'from time to time' may give the employer room to change the arrangement. A clause that fixes your place of work at home may be a different matter.

Refusing a direction while you dispute it is risky. If you have personal reasons why office attendance is hard for you, such as caring responsibilities, a disability or being 55 or older, and you have worked for the employer for at least 12 months, you may be able to make a written request for flexible working under s 65, which an employer can refuse only on reasonable business grounds. PaperCut pointed out that Mr Johnson made no such request. If you think a direction is unlawful, consider getting advice early, before a warning becomes a dismissal. If you are dismissed, an unfair dismissal application must be lodged within 21 days after the dismissal takes effect.