Building a Strong Business through Working from home

How to make work from home work for your company

Employers seeking to gain an edge in the great recruitment and retention race are increasingly offering employees the ability to work from home. The benefits of work from home arrangements for employees are manifold and include no commute, improved ability to meet other commitments such as caring for children or elderly parents, ability to choose hours of work, improved morale and an associated increase in productivity.

For employers the benefits include reduced costs in office space and energy consumption, improved productivity and skills retention. Trusting people to work in their own environment to their own schedule also significantly boosts staff morale and is likely to encourage staff to stay with your company longer.

However, making it possible for staff to work from home is not as simple as giving them a desk, an internet connection, a phone and a laptop. Companies wanting to offer work from home benefits or expand their current offering have a range of factors to consider such as:

  • The management approach for dealing with home workers and monitoring their performance
  • Ascertaining whether a particular job is suitable as a work from home position
  • The costs involved in training work-from-home employees
  • The costs involved in setting up communication links and home work stations which meet health and safety requirements
  • Ensuring occupational health and safety standards are maintained over the long term
  • Potential information security problems
  • Maintaining staff development, training and skill levels
  • The risk of social isolation and a breakdown in communication among home workers
Potential advantages Potential disadvantages
  • Improved work life balance for employees
  • Employees can dictate days and hours of work
  • Improved return to work rates after parental leave
  • Reduced staff turnover
  • Increased staff morale and loyalty
  • Increased productivity
  • Reduced on-site space pressures
  • Not all employees enjoy working from home, they may miss working in a team and the motivation which comes from being with colleagues
  • Potential isolation
  • Fewer opportunities for mentoring and on-the-job learning
  • High cost of set up and ongoing costs associated with communication and infrastructure maintenance
  • Security of information
  • Potential loss or dilution of corporate culture


Under the Fair Work Act 2009, which came into effect in 2010, employees with carer responsibilities have the right to ask for flexible work arrangements, including the ability to work from home. An employer can only refuse the request on reasonable business grounds and must be able to explain how the business would suffer if an employee wasn’t on site.

In making a decision on this, employees should consider: an employee’s personal circumstances and why they are making the request; the employee’s role, clearly some positions lend themselves more easily than others to work from home opportunities; the effect on the business and the consequences for both the employer and the employee if the right to work from home is denied.

You should also think about how often you would like the employee to work from home and how often you would like them on site. It is not unreasonable to request an employee to make regular visits to the workplace and these visits will enable you to better manage their performance and their morale.

Once you have weighed up the pros and cons of enabling an employee to work from home you’ll need to formalise your decision by either explaining to the employee why you won’t be granting the request or by granting the request and preparing a document which outlines the terms and conditions of the work from home arrangement. Under the Fair Work Act employers must provide a written response which either accepts or declines an employee’s request for flexible work within 21 days.

If you decide to proceed with the request to work from home you’ll need to draw up a document which details the change in working arrangements. Ensure the document you draw up is provisional and subject to change so you can make adjustments when necessary (for example after a 6 or 12 week review period) and that it clearly describes working days and hours, responsibilities, on-site days and so on.

Keeping employees safe

In 2006 Telstra employee Dale Hargreaves fell down the stairs at home twice while on a break from work. In 2011 the Administrative Appeals Tribunal found that she was injured in the course of employment and was eligible for financial compensation.

The same tribunal also found that the depression and anxiety Ms Hargreaves developed after having to change her return to work plans was cause for further compensation.

Telstra was required to pay all the medical and treatment costs associated with the conditions, weekly compensation payments as well as all the costs related to the legal action. This is a terrifying prospect for employers and could arguably be used as a case against allowing employees to work from home.

Harmers Workplace Lawyers, senior associate, Kristin Ramsey says employers often approve flexible work arrangements without giving thought to the potential risks involved.

“It is important for employers to evaluate potential risks and exposures when considering and granting such requests, as health and safety obligations apply the same way to work performed at home as they do to work performed in the office.”

“It is often a delicate balancing act between providing flexible working options and minimising legal risks to the business. The crux of the issue is deciding whether the benefit to the employee outweighs the potential risks to the business, and whether such risks can be properly managed,” Ms Ramsey said.

To avoid a repeat of the Telstra case commercial law firm Freehills recommends companies take a cautious and considered approach to implementing work from home practices.

Freehills says employers should:

  • Bear in mind the fact that employees cannot, as part of a flexible work agreement, be asked to waive their legal right to workers’ compensation
  • Carefully consider whether the arrangement is reasonable taking into account the requirements of the role, the type of flexibility requested and any obstacles to success
  • Document the decision-making process and, if it is decided to reject the request, be prepared to justify this decision
  • Ensure a risk assessment of the home working environment is completed before the arrangement commences. Some employers allow employees to perform a self-assessment while others send someone to inspect the home office. The ‘working area’ should be clearly defined as part of this assessment
  • Make clear the employee’s ongoing obligations with respect to identifying hazards and risks, complying with policies and procedures (including wearing appropriate clothes and holding the handrail while on stairs) while working from home and reporting any incidents
  • Consider whether it is desirable to ‘trial’ the arrangement. This allows you to assess whether the arrangement is likely to be successful before committing to it on a long term basis. Periodic reviews and termination of the arrangement with notice should also be considered
  • Communicate the details of the arrangement to the employee in writing and require the employee to sign-off on the terms agreed. This will include details regarding sharing of costs, performance monitoring and confidentiality issues
  • Set a broader policy for irregular remote work or work from home, to ensure all staff take appropriate precautions when working away from the office. This policy may be part of the policy that applies to the issue of work related tools such as laptops, Blackberries or iPhones.¹

1 This list was written by Kathryn Bion, Solicitor and Kate Jenkins, Partner, Melbourne and Harold Downes, Partner, Brisbane from the corporate law firm Freehills.

This Better Workplace Bulletin was First Published in June 2012