The Papercut Decision And The Current Position On WFH

The FWC's Johnson v PaperCut Software decision has renewed debate about the limits of working from home rights. While some have compared it to Chandler v Westpac, the cases highlight that WFH outcomes depend on individual circumstances, contract terms and employer policies. The ruling underscores that no single case establishes a universal right to work from home.

The recent Fair Work Commission (FWC) decision in Mr Richard Johnson vPaperCut Software Pty Ltd [2026] FWC 178 (Papercut) has attracted considerable coverage focused on its apparent implications for the rights of employees working from home.

In short, in Papercut the dismissal of an employee who failed to follow a direction to return to work notwithstanding an apparent contractual right permitting him to work from home was held by Commissioner Connolly of the FWC to be not unfair, ostensibly reinforcing a right of employers to compel employees to return to working from the office.

Much of this coverage focused on what was asserted to be inconsistency between the decision in Karlene Chandler vWestpac Banking Corporation [2025] FWC 3115 (Westpac), which was heralded by some as establishing a universal right to work from home (or close to it), and the outcome in the more recent decision of Papercut.

It is important to put both Papercut and Westpac in perspective. Here are some matters to bear in mind when considering both decisions.

Papercut and Westpac are different types of cases

The decision in Westpac dealt with are quest for flexible working arrangements pursuant to section 65 of the Fair Work Act. The outcome was heavily dependent on the caring obligations of the applicant which enabled her to make such a request and pursue the matter to determination by the FWC.

The decision in Papercut was an unfair dismissal. The applicant in Papercut had neither requested a flexible work arrangement nor identified any personal reason why he could not comply with the policy and directions of the employer to return to the office. He was primarily relying upon an apparent contractual right to work from home.

WFH decisions turn on the circumstances of the case

There is a danger in declaring any one case as either establishing or negating the right of employees generally to work from home. Cases dealing with the issue of work from home, whether they deal with flexible working arrangement or unfair dismissal, very much turn on their own facts. No two cases are alike. While the outcome of any two such cases might appear to be inconsistent, when the differences in the factual scenarios and applicable principles are taken into account, it is more likely they can be reconciled. This is the situation with Westpac and Papercut - while they both arise from the underlying issue of work from home, they otherwise have little in common, and assertions of inconsistency have been, by and large, overstated.

Papercut and the "contractual right" to WFH

The Papercut decision has been said to confer upon employers aright to require employees to return to work even where the employee has a "contractual right" to work from home. The position is more nuanced than this.

The contractual right relied upon by the employee in Papercut (headed "Mobility" at Clause7 of the employment contract) was in the following terms:

"The Employee is permitted to work from their personal residence in item 1 of Schedule1 in line with relevant Papercut policy. The Employee may be required to work at other locations from time to time." (Emphasis added)

At paragraph 68 of Papercut Commissioner Connolly held:

"I am not persuaded that Mr Johnson's interpretation of the terms of his employment contract provide him any basis to reach a conclusion he had an unconditional right to work from home. Applying the principles relevant to the interpretation of employment contracts set out above at [56], my assessment is that, objectively viewed, a reasonable person would find these words to mean Papercut agreed he could work from home at the time the contract was entered into. The inclusion of the word "permitted" supports this being the correct conclusion, as something that Papercut allowed Mr Johnson to do."

At paragraph 70 Commissioner Connolly held that the use of the word "permitted" meant:

"Working from home, is something Papercut "allowed" him to do. It was not, however, as Mr Johnson believed, a "right" he was entitled to without caveat."

At paragraph 71 Commissioner Connolly continued:

"The words following," in line with relevant policy ", make it clear the permission was conditional. It was only permitted if it was consistent or in accordance with Papercut policy. In the event Papercut policy changed, working from home may no longer be allowed. The subsequent sentence further clarifies this fact, making it clear that the employer reserved the right to require Mr Johnson to work from other locations from time to time."

Commissioner Connolly further observed at paragraph 72:

"Clause 3 of the contract further reinforces this conclusion that it was acondition of Mr Johnson's contract that he was required to comply with all policies, rules and regulations from time to time provided by Papercut."

This analysis culminated in Commissioner Connolly determining, at paragraph 73:

"It follows from the above that I find, read as a whole, a reasonable person would objectively conclude the terms of Mr Johnson's contract allowed him to work from home provided it was consistent with Papercut's policy as determined by it." (Emphasis added)

The contractual right relied upon by the applicant in Papercut was held by the FWC to be a qualified right. It was conditional upon Papercut's policy permitting him to work from home.

As such, Papercut is not authority for abroad proposition that a contractual right to work from home can be overridden by the policy of an employer. Rather, the terms of the specific clause under consideration in the case was held to be qualified by the policy, which in this case had been amended to withdraw permission for the applicant to work from home.

Indeed, if the contractual right to work from home in Papercut had been found to be unqualified the outcome would, almost certainly, have been different. In such circumstances it is difficult to conceive how adirection from the employer to return to work from the office could have been held to be "lawful and reasonable".

Conclusion

When it comes to WFH cases, beware generalisations. While there is an understandable temptation to seek to distill an absolute one-size-fits-all conclusion on the WFH issue, the nature of such decisions can render that exercise one infutility.

Some factors that may assist an employee in arguing they should have a continued right to work from home include carer's responsibilities (specifically where undertaking those responsibilities are rendered extremely difficult by a requirement to work from the office), work from home arrangements that have been successfully undertaken for an extended period (maintaining aproven status quo), and an unqualified contractual right to work from home (as opposed to the right in Papercut that was held to be qualified).

It has been reported that the Papercut decision will be appealed to the Full Bench of the FWC. It will be a case to watch with interest, particularly if the Full Bench adopt adifferent interpretation on the relevant contractual clause in the applicant's employment agreement from that of Commissioner Connolly.

For further information please contact:

Michael Byrnes, Partner
Phone: + 61 2 9233 5544
Email: mjb@swaab.com.au

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.