The Business Council is urging the Victorian Government to abandon its plan to legislate a mandatory entitlement for employees to work from home two days a week, warning it will further damage the state's economy and risk jobs leaving the state.
Business Council Chief Executive Bran Black said the proposal risks both jobs and investment in Victoria, making the state less competitive.
"Victoria is already facing a number of economic headwinds, and the proposal for a one-size-fits-all mandate will drive investment and jobs away from the state at a time they're needed most," Mr Black said.
"Achieving the right level of flexibility is done at the workplace level, in discussions between employers and employees, and there are already existing federal laws that provide rights for workers to request the flexibility they need.
"Around one third of workers already have some form of working from home arrangement, and there's no evidence that existing laws aren't working.
"All this mandate will do is add more red tape and make it less likely that businesses will choose to invest in Victoria, and BCA analysis shows Victoria is already the most challenging place to do business in Australia."
The BCA believes a mandate has the following risks:
- Economic: Victoria has endured the highest unemployment rate in the nation for 15 of the last 17 months, and multifactor productivity growth was just 0.1 per cent last year. The BCA's Regulation Rumble 2024 found Victoria was the hardest place to do business in Australia, particularly due to higher payroll taxes and cumbersome licensing regimes. New workplace mandates will only deter investment when the state most needs job creation.
- Loss of true flexibility: Flexible work is best negotiated between employers and employees, tailored to individual needs and workplace realities. A blanket mandate risks undermining the trust-based arrangements already in place.
- Frontline worker divide: Many jobs, including teaching, nursing, construction, manufacturing, and emergency services, cannot be done from home. This proposal would benefit office-based workers and not essential frontline workers.
- Duplication and red tape: The Commonwealth Fair Work Act already provides a right to request flexible work, and adding new state legislation creates duplication, confusion, and legal uncertainty.
- Jurisdictional overreach: Workplace relations is a Commonwealth responsibility, raising serious questions about whether Victoria has the power to legislate such a right. It may also be prevented under section 109 of the Australian Constitution. In these circumstances, creating new state-specific workplace laws creates uncertainty as to their ongoing effect, and that deters investment.
"Victoria needs policies that build confidence, attract capital, and create more jobs," Mr Black said.
"If this law proceeds, it would likely see businesses - especially those operating across multiple states - choose to invest elsewhere, taking Victorian jobs with them."
