Unfair dismissal claim fails after employee refuses return to office direction

Executive Summary

The Fair Work Commission (FWC) has dismissed an unfair dismissal claim brought by a PaperCut employee who was terminated after refusing to comply with a return to office direction. The Commission found the direction to be lawful and reasonable and held that the employee's contract did not provide an unconditional entitlement to work from home.

The decision reinforces that employers may lawfully require employees to attend the workplace in accordance with contractual terms and workplace policies, and that refusal to comply with such directions may constitute a valid reason for dismissal.

Key Facts

• The employee was employed by PaperCut as a Melbourne based product engineer.
• His employment contract permitted working from home "in line with relevant PaperCut policy" and required him to "comply with such reasonable and lawful directions and policies" provided by the employer.
• Following the easing of COVID-19 restrictions, PaperCut introduced a staged return to office policy requiring employees to attend the workplace under a hybrid working model.
• The employee refused to comply with this policy, declined to agree to contractual changes clarifying the employer's right to require attendance, and did not provide any personal reasons for why he should not attend the office.
• After repeated requests and warnings, the employee's employment was terminated.
• The employee subsequently commenced unfair dismissal proceedings.

The Legal Issue

The primary issue before the FWC was whether the employee's dismissal was harsh, unjust, or unreasonable, meaning that it would constitute unfair dismissal under the Fair Work Act 2009 (Cth). To determine this, the Commission considered:

1. Whether PaperCut's direction requiring the employee to attend the workplace under a hybrid model was lawful and reasonable;

2. Whether the employee's contract conferred an entitlement to work from home; and

3. Whether the employee's refusal to comply with the direction constituted a valid reason for dismissal.

The Decision

The FWC dismissed the employee's unfair dismissal application. The Commission found that PaperCut's direction was lawful and reasonable in the circumstances.

The Commission determined that the employee's contract did not provide an unconditional right to work from home and that remote work was permitted only subject to company policy. PaperCut was entitled to introduce and enforce a subsequent return to office policy, and the employee's ongoing refusal to comply constituted a valid reason for dismissal.

The dismissal was not considered harsh, unjust, or unreasonable, taking into account the employer's consultation, warnings provided, and opportunity for the employee to comply prior to termination.

Key Takeaways for Employers

This decision confirms that employers may lawfully require employees to attend the workplace when such directions are supported by contractual terms and workplace policies. Contracts that permit working from home subject to policy do not automatically create a permanent or unconditional entitlement to remote work.

The ruling also highlights the importance of implementing return to office directions reasonably, including clear communication, consultation, and providing employees with warnings and the opportunity to comply. Where an employee refuses to comply with a lawful and reasonable direction, this may constitute a valid reason for dismissal.

Key Takeaways for Employees

Employees do not have an automatic or unconditional right to work from home, even if prior practice or contractual language permitted remote work. Flexible work arrangements are generally subject to company policies and lawful directions from the employer.

Refusing to comply with a lawful and reasonable direction, such as a hybrid or return to office requirement, can constitute a valid reason for dismissal. In this case, the employee provided no personal reason for not attending the office, contributing to the Commission finding the dismissal was not harsh, unjust, or unreasonable.

By contrast, in a 2025 Westpac case, an employee successfully challenged a return to office direction after formally requesting flexible work under the Fair Work Act for valid carer and personal circumstances.

The case underscores the importance for employees of providing clear reasons and engaging constructively when workplace directions change. Seeking clarification, communicating individual circumstances, and exploring compromise options can significantly reduce the risk of adverse employment outcomes.

Broader Implications

The FWC noted that on 25 February 2022, the Victorian Government removed its strong recommendation for employees to work from home, encouraging a return to the office as pandemic restrictions eased. This illustrates that the reasonableness of refusing to return to the workplace may be assessed differently in the post pandemic context.

If you are reviewing flexible work arrangements, updating employment contracts or policies, or assessing whether a direction provided by your employer is lawful and reasonable, Pointon Partners has extensive experience guiding both employers and employees through these issues. Please contact our Employment Law team for advice.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.