The Fair Work Commission (the Commission) has handed down an important decision about employees working from home (WFH) under the Clerks Private Sector Award 2020 (the Clerks Award).
On 27 August 2026, a Full Bench of the Commission determined that the Clerks Award should be varied to include a term specifically directed to facilitating WFH arrangements under existing award provisions. The new draft term that the Commission has proposed will give employees a right to request WFH arrangements but does not impose specific timeframes for employers to respond, nor does it impose a limited set of reasons on which employers can decline the request.
Why is this important for employers?
In reaching its decision to vary the Clerks Award to include a WFH arrangements provision, the Commission found that the evidence before it demonstrated that WFH arrangements are already widespread amongst employees performing clerical duties and that in reality the existing provisions of the Clerks Award are not operating as an impediment to WFH arrangements. The Commission expressed a view, however, that it considered it likely that existing WFH arrangements are non-compliant with particular provisions of the Clerks Award, particularly in relation to the requirement for ordinary hours to be worked continuously, and the requirements regarding the timing and duration of rest and meal breaks.
The Commission’s proposed term is intended to resolve these matters by facilitating agreed arrangements for the operation of existing provisions to be modified when employees are WFH. In the meantime, employers should be mindful of non-compliance risks in circumstances where employees working from home are setting their own working hours and should seek advice if they are concerned about underpayment risks.
Clerks Award “appropriate vehicle” to assess modern award regulation and WFH
The Modern Awards Review Final Report 2023–24 published in July 2024 identified that facilitating access to WFH arrangements in the Clerks Award required priority consideration.
The Clerks Award covers, subject to certain exception outlined in clause 4.3 and 4.4 of the award, private sector employers throughout Australia in relation to employees wholly or principally engaged in ‘clerical work’ which is defined to include “recording, typing, calculating, invoicing, billing, charging, checking, receiving and answering calls, cash handling, operating a telephone or switchboard, attending a reception desk and administrative duties of a clerical nature.”
The existing terms of the award were developed at a time when clerical work was primarily performed in office environments and don’t match how employees are actually working in practice when they work from home.
Research data on existing WFH arrangements
The Commission considered its own published research (including a data profile of characteristics of employees covered by the Clerks Award and a Swinbourne University survey), as well as submissions and evidence from unions and employer groups, and made the following findings in respect of the extent and characteristics of current WFH arrangements:
- WFH arrangements are widespread;
- Employees WFH are likely to be predominantly female;
- Most employee requests for WFH arrangements are approved in whole or in part;
- A significant proportion of WFH arrangements are employer-initiated;
- About two thirds of employees WFH work half or less of their hours at home, while about a third work more than half their hours at home;
- There is some unmet demand on the part of employees to work from home;
- Significant reasons for approving WFH requests include productivity/efficiency; improved work engagement; pregnancy, childcare, or other caring responsibilities; disability and health issues; and over 55 years of age;
- Employers give a range of reasons for the refusal of WFH requests which appear to be business-related and reasonable;
- Employees derive a range of personal and financial benefits from WFH;
- There is a mixed picture as to whether WFH has a positive, negative or neutral effect on productivity, with a hybrid model being the optimum;
- Employees WFH often have flexibility to set their own working hours;
- Employees WFH often choose to work their hours outside the spread of ordinary hours prescribed by the Clerks Award; and
- Most employers and employees do not consider variations to the Clerks Award necessary to make it easier for employees to access WFH arrangements.
Non-compliance with certain award provisions
The Commission’s research findings also highlight that it is likely that existing WFH arrangements are non-compliant with certain award provisions about:
- continuous hours of work (clause 13.6(a));
- the timing and duration of rest and meal breaks (clauses 15.2 and 15.3); and
- the employer’s discretion over when ordinary hours are worked (clause 13.6(b)).
Non-compliance with award provisions can create the potential for underpayments to arise.
However, employers should also take note of an existing provision of the Clerks Award, clause 21.1(c), that provides that hours worked by a (non-shift worker) employee outside the spread of ordinary hours only attract the obligation for the employer to pay overtime rates if the hours are worked ‘at the direction of the employer’.
Data supports establishing a “simple” right to request pathway
The Commission held that inserting a new provision into the Clerks Award compelling employers to allow employees to WFH in a wider range of circumstances is not justified.
Instead, the Commission has determined that there is benefit in adopting an award provision that establishes a “visible mechanism” for employees to request WFH arrangements. This would potentially give confidence to employees who want to work from home but who lack the confidence to make a request, without significantly adding to employers’ compliance obligations.
The proposed term, Clause 5A, provides that an individual employee “may request”, and an employer “may agree”, to an arrangement permitting the employee to work from home. The term does not set a timeframe for employers to respond to the request but does contain a number of safeguards for employees such as that it operates only upon request by an existing employee, must be made without coercion or duress, and must record in writing the details of the arrangement including the WFH days, the location where the work is to be performed, and whether any existing award terms will be modified to facilitate the arrangement.
The WFH request would constitute a workplace right for the purpose of the general protections in the FW Act (as is the right to request flexible working arrangements under section 65), and a dispute in relation to the request would be a dispute about a matter arising under the Clerks Award and therefore be subject to the dispute resolution procedure in clause 40 of the award.
What happens next?
The Commission has published a draft term with its decision and submissions on the draft term are due by 5.00 pm (AEST) on 17 September 2026.
Once determined, the agreed term will be incorporated into the Clerks Award.
The new term may also serve as a model for incorporation into other modern awards.
Practical takeaways for employers
In the meantime, employers should use this decision as a prompt to:
- review existing WFH arrangements for any potential compliance issues, particularly around continuous hours and breaks;
- ensure there is a written record of WFH patterns and any agreed variations (the draft clause contemplates this being kept as a time and wages record);
- be clear about when work outside ordinary hours is authorised or directed, and ensure time recording supports the distinction (given overtime principles remain);
- avoid assuming that WFH justifies a broader spread of ordinary hours (the Commission specifically declined to vary the spread of ordinary hours); and
- ensure policies and manager practices align with the right to disconnect, particularly for WFH cohorts.
If you need advice about working from home arrangements or award compliance, please reach out to our friendly team.
