Victoria’s work from home plan will drive away jobs, big business warns

2 weeks ago 2

Victoria’s biggest employers have urged the state government to abandon plans to make working from home a legal right, warning it will drive jobs and investment interstate and deepen divisions between workers.

In a searing submission, seen by The Age, the Business Council of Australia (BCA) has lashed the Allan government’s plan to legislate a right to work from home at least two days a week, claiming the change strayed into federal territory and would expose employers to legal uncertainty.

At Labor’s state conference in August, Premier Jacinta Allan announced plans to legislate the right to work from home.

The lobby group, which represents Australia’s largest companies across sectors, including manufacturing, infrastructure, mining and retail, also said the policy could exacerbate “existing economic challenges” and risked driving jobs across state borders.

“Implementing rigid mandates risks driving investment away from Victoria, further exacerbating existing economic challenges,” the submission said.

In August, Premier Jacinta Allan unveiled the work-from-home proposal at Labor’s state conference, pitching it as a nation-leading reform to embed pandemic-era flexibility into law.

The announcement received widespread support from unions and family groups and came after the May federal election where workplace flexibility emerged as a key battleground.

Bran Black, Business Council of Australia chief executive, said the policy risked “harming morale, organisational cohesion, and economic fairness”.

The federal Coalition initially campaigned heavily against remote work – particularly among Commonwealth public servants – framing it as a drag on productivity, but was forced to retreat on its plan following a fierce backlash from voters, particularly professional women.

Seizing on the federal Coalition’s backflip, Allan has vowed to enshrine flexible work in law, arguing the policy would cut congestion, support working women, carers and people with a disability and save workers time and money commuting.

A Resolve Political Monitor survey conducted for this masthead in August showed a whopping 83 per cent of Labor voters and nearly two-thirds of uncommitted voters supported the right to work from home being enshrined in law.

The policy fuelled a surge in popular support for Labor, with primary support climbing from a critical low of 22 per cent at the start of the year to 32 per cent.

But the policy pledge was heavily criticised by employer groups including the Victorian Chamber of Commerce and Industry, the Australian Industry Group and members of the premier’s business advisory over fears it would impact productivity and confidence in Victoria.

On Monday, the Allan government began consultation with groups including the Business Council of Australia, which pleaded with Labor to axe the plan.

The BCA said about one-third of workers already have some form of work flexibility and that any legislated change would unfairly advantage office workers at the expense of nurses, teachers, tradies and emergency workers who have face-to-face roles that must be done at the workplace.

“This legislation could advantage office-based professionals, who may benefit from legislated flexibility, while offering little for front-line, service, and essential workers, who cannot perform their jobs remotely,” Business Council chief executive Bran Black said.

“The proposed policy could create an arbitrary distinction that risks harming morale, organisational cohesion, and economic fairness.”

Another key concern raised by the BCA – whose members employ more than 250,000 Victorians – is that the new laws risked driving jobs interstate.

While business investment in Victoria has remained steady in recent years, Victoria has repeatedly recorded above-average unemployment and sluggish economic growth.

Black said mandating the right to work from home during such economic “headwinds” would “drive investment and jobs away from the state at a time they’re needed most”.

Opposition leader Brad Battin has called on Labor to explain how it will implement the work-from-home policy.

“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,” Black told The Age.

“Victoria needs policies that build confidence, attract capital, and create more jobs.”

In its submission, the employer group also said there was “no persuasive evidence” that a statutory right to work from home would improve productivity and questioned how a state-based right to work from home would overlap with national employment laws.

“We urge the Victorian government to withdraw this proposal and, instead, focus on measures that will increase the likelihood of attracting investment.”

So far, the state opposition has stopped short of criticising the policy with Opposition Leader Brad Battin saying the Coalition would review the legislation. By contrast, shadow industrial relations minister Tim Wilson has lashed the work-from-home proposal as “professional apartheid” echoing concerns the policy would hurt frontline workers who cannot work remotely.

On Tuesday, Battin reiterated the Coalition support for flexible work rights, but called on Allan “to ensure her plans won’t drive jobs and investment interstate”.

“Any legislation needs to be workable and not overly prescriptive,” he said.

A Victorian government spokesperson said the state’s biggest companies were already operating mandated work-from-home days and advertised the fact.

“It is no surprise that an organisation run by a Liberal [Bran Black] hates work from home,” the spokesperson said. “Work-from-home works for families and it’s good for the economy – it saves families money, means more people are in the workforce – and it even cuts congestion.”

The Department of Premier and Cabinet is undertaking consultation on the proposed laws which will be debated in parliament next year

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