Menka Michaelides runs a tight ship at Pro Repair Auto Care Centre in Melbourne's inner suburbs. She manages staff schedules, occupational health and safety obligations, and the daily logistical pressures that come with running a trade-based small business. Now she is bracing for what she describes as a policy that will make all of that considerably harder.
The Allan government this week confirmed it will not carve out an exemption for small businesses in its landmark plan to legislate a two-day-per-week work-from-home right for eligible Victorian workers. Despite earlier indicating that small businesses could be spared from the new laws, the government has confirmed they would apply to the 1.3 million Victorians who work for small employers. The legislation is expected to be introduced to the Victorian parliament in July, with the right to be enshrined via the state's Equal Opportunity Act.
For Michaelides, the policy draws an uncomfortable line straight through her payroll. "It's going to create a two-tier situation where the admin staff have the ability and the right to work from home," she said, fearing the new laws will lead to exactly that kind of divided workforce. Blue-collar staff, who must attend the workshop in person, would watch their colleagues work remotely with no equivalent entitlement. That imbalance, she argues, breeds resentment and adds bureaucratic complexity to an already stretched operation.
Her concerns extend beyond morale. Under the proposed framework, employers would carry responsibility for ensuring their workers have a safe home workspace, a compliance obligation Michaelides says she has no practical way to meet. "We are a safe business, we have occupational health and safety standards," she told AAP. "But how can I ensure that happens at home? I can't control that. Yet we're going to be liable for that."
Premier Jacinta Allan has pushed back firmly against those concerns. "If you can work from home for a small business, you deserve the same rights as someone working for a big bank. Not everyone can work from home, but everyone can benefit," Allan said. The government argues the arrangement saves Australians on average $110 a week, or $5,308 every year, and that the practical benefits to families, particularly women, carers and parents, justify the policy's scope.
The question of who actually qualifies for the entitlement remains one of the central unresolved tensions. The policy only applies to workers who can "reasonably" do their job from home, though the extent of who falls into that category is not yet clear. Swinburne human resource management expert Peter Holland illustrated the ambiguity: "You cannot be the checkout person in a small shop and expect to work from home, but if you're a back-office person do you need to be at work every day?"
Holland, speaking to AAP, offered a broader perspective on the significance of the reform. He suggested the mandate would primarily target employers who are "a bit recalcitrant," and compared the reforms to Australia introducing paid maternity leave in 1973 and superannuation in 1992, arguing small businesses could ultimately benefit from providing flexibility in a tight labour market. The historical comparison is instructive: both of those changes faced fierce industry opposition before becoming standard features of Australian working life.
There is, however, a legitimate legal question sitting underneath all of this. There are still question marks around how the right would be enforced, with legal groups warning the plan could be subject to a High Court challenge because Victoria, like other states, ceded its industrial relations powers to the Commonwealth decades ago. Premier Allan has repeatedly pushed back against those concerns, pointing to advice about an "explicit provision" in the Fair Work Act for state-based anti-discrimination laws, and saying: "We have advice that it is constitutionally valid."
Peak business bodies remain sceptical. The Victorian Chamber of Commerce and Industry argued the legislation was "unnecessary" given the vast majority of businesses already provided flexible working arrangements, adding: "Business argues these matters must rightly be left for negotiation and agreement at the enterprise level." The Victorian Chamber of Commerce and Industry has also raised concerns that the policy could damage productivity and exacerbate workplace mental health issues through detachment from the office environment.
Politically, the terrain is less straightforward for the Opposition than it might appear. The federal Liberal Party's plan to recall public servants to the office full-time backfired in the lead-up to last year's federal election, ultimately causing the party to drop its plan before polling day — an about-face that could make it difficult for the state Liberal Party to oppose measures enshrining new WFH rights. Opposition Leader Jess Wilson has said she supports working from home but has demanded more detail from the government before the legislation reaches the floor of the Victorian parliament.
The debate playing out in Victoria reflects a genuine and unresolved tension in modern labour policy. The case for statutory flexibility rights is real: more than a third of Australian workers already work from home regularly, and the equity arguments for women and carers carry weight. But a one-size-fits-all mandate applied to businesses as varied as a law firm and an auto workshop raises fair questions about proportionality. The test for the Allan government will be whether the legislation's design, still being worked through via public consultation, can accommodate that diversity without placing disproportionate burdens on the small operators who have the least capacity to absorb them. The public consultation process remains open for Victorians and businesses to have their say.