July 12, 2026 · Offshore & Compliance

When “Reasonable to Work From Home” Meets “Reasonable to Send It Offshore”: What Victoria’s New WFH Law Means for Your Offshore Team

Author: Jason Mitchell

Last week, we wrote about Pascua v Doessel Group and the uncomfortable truth it exposed: an “overseas contractor” doing employee-shaped work from the Philippines can be found, in substance, to be an employee under the Fair Work Act, despite the label on the contract. That decision was about pulling work out of the reach of Australian employment protections. It failed.

Now Victoria has introduced a law that pushes from the opposite direction. On 16 June 2026, the Allan Government tabled the Equal Opportunity Amendment (Work from Home) Bill 2026 (Vic), described by employment lawyers as “the world’s most expansive statutory right to work from home.” If passed in its current form, it commences 1 September 2026 (1 July 2027 for employers with fewer than 15 staff).

Read side by side, these two developments tell a single story that every business running, or considering, an offshore team needs to understand.

What the Bill Actually Does

The Bill converts working from home from something you ask for into something you’re presumed to have. According to the Victorian Government Solicitor’s Office and the K&L Gates alert, the key mechanics are:

  • A statutory entitlement, not a request. Eligible employees whose roles can reasonably be performed remotely can work from home up to two days a week (pro rata for part-timers and regular casuals), on days and times of their choosing.
  • The burden flips to the employer. You can’t simply approve or reject. You must permit the arrangement unless it is not reasonable, and you must respond to a written notice within 21 days.
  • A closed list of refusal grounds. Inherent role requirements, a significant drop in productivity, safety, supervision and training impacts, customer-service or confidentiality harm, excessive financial cost, and impractical staffing changes. The words “significant” and “excessive” set a high bar.
  • Employers fund it. Where WFH is allowed, the employer must pay “reasonable costs,” meaning hardware, software, and secure system access.
  • Disputes go to the Victorian Equal Opportunity and Human Rights Commission for conciliation, then to VCAT, which can order an employer to permit WFH.

Business groups are not thrilled. The Victorian Chamber of Commerce and Industry warned the intervention is “sending a negative signal to employing businesses, with increasing reports of jobs being sent offshore.”

The Two Cases Are the Same Argument, Viewed From Opposite Ends

Pascua and the WFH Bill are both, at their core, about one question: can a role reasonably be performed away from the employer’s premises?

In Pascua, the firm’s whole model depended on the answer being “yes.” The paralegal work was so obviously remote-capable that it could be run from Manila, dressed up with an Australian phone system and a local email signature. The Commission agreed the work could be done remotely. That was precisely why it looked like ordinary employment done at a distance, and why the contractor label collapsed.

The WFH Bill now hands that same “can this be done remotely?” test to your onshore Victorian staff, and answers it in their favour by default. If a role can reasonably be performed from a home in Brunswick, the employee has a presumptive right to do it there two days a week, and you carry the burden of proving otherwise.

Here’s the bind for employers who lean on offshore contractors: you cannot comfortably argue both sides. If you have already offshored a function on the basis that it’s perfectly deliverable from another country, you have effectively conceded that the role can be performed remotely. That admission does two things at once:

  1. It undercuts any argument that the equivalent onshore role must be done in thMelbournee office, weakening your position under the WFH Bill.
  2. It strengthens the Pascua-style argument that your “offshore contractor” is doing employee work, just from further away.

The remote-capability of the work is now a live legal fact that cuts through both regimes. You can’t switch it on for cost savings and off for compliance..

Why the Chamber’s “Jobs Sent Offshore” Warning Is a Trap, Not a Loophole

The Chamber’s framing, that regulating WFH too hard sends jobs offshore, is a real economic signal. But as a compliance strategy it walks straight into the wall the original article described.

If an employer’s response to a Victorian WFH obligation is “fine, I’ll just replace the role with an offshore contractor,” they are:

  • Taking a role they’ve now publicly treated as remote-capable, and
  • Handing it to a worker doing employee-shaped work under a contractor label, and
  • Doing so as a national-system employer covered by the Fair Work Act.

That is the Pascua fact pattern with a fresh coat of paint. Recall the case history: Pascua v Doessel Group [2024] FWC 2669, upheld on appeal in Doessel Group v Pascua [2025] FWCFB 43, then $10,800 for unfair dismissal in [2025] FWC 1833. Three decisions, three losses for the employer. Offshoring to dodge a domestic entitlement doesn’t remove the exposure. It stacks a Fair Work misclassification risk on top of a Victorian WFH one.

The Constitutional Wrinkle

There’s a genuine open question about whether Victoria can even do this. As Australian Business Lawyers & Advisors note, Victoria referred its private-sector IR powersMelbourne to the Commonwealth in 1996, so most Victorian workers sit under the federal system. Whether a state can bolt a separate WFH right and enforcement regime onto the Equal Opportunity Act 2010 (Vic) without running into inconsistency with the Fair Work Act is, in their words, likely to “attract close legal scrutiny and potentially constitutional challenge.”

Even if the Victorian right is watered down or struck out, the federal misclassification exposure from Pascua doesn’t move an inch. It lives in the Fair Work Act and the High Court’s Personnel Contracting [2022] HCA 1 approach, substance over label. A business betting on a constitutional challenge to escape the WFH Bill is still fully exposed on the offshore-contractor front.

Will This Stay a Victoria Problem?

A direct copycat law elsewhere is a hard sell in the near term. The constitutional problem hanging over Victoria’s Bill would hang over any state that follows, since most states referred their private-sector industrial relations powers to the Commonwealth, so a state work from home statute risks colliding with section 26 of the Fair Work Act and section 109 of the Constitution. Employment lawyers already expect Victoria’s law to face a constitutional challenge, and any other state would inherit the same fragility, so most will wait and see whether it survives court before spending their own capital on it.

The more likely path is contagion through the federal system rather than fresh state laws. Lawyers have warned that workers outside Victoria will weaponise the Victorian standard in their own disputes. If a national employer lets Victorian staff work from home two days a week, it becomes hard to argue “reasonable business grounds” for refusing the identical role in Sydney or Brisbane. The bigger lever is the Fair Work Commission’s current consideration of a work from home term in the Clerks Private Sector Award, which would reach administrative workers nationwide in one move, with no other state needing to pass anything.

The takeaway is simple. Do not treat this as a Victorian-only issue a NSW or WA head office can ignore. The entitlement is likely to reach your onshore people wherever they sit, and the same logic that makes a role remote-capable for them is the logic that makes it look employment-like when it is done offshore under a contractor label. The exposure travels with the work, not with the postcode.

What This Means Practically: Five Things to Do Now

The through-line from our last article holds: structure, not paperwork, is what protects you. The WFH Bill just raises the stakes.

  1. Map your remote-capable roles once, honestly, and use that map consistently. The same role can’t be “office-essential” for a Victorian employee and “fully offshore-able” for a contractor. Inconsistency is now legally expensive on both sides.
  2. Audit offshore contractor arrangements against the five substance questions from Pascua: control, integration into systems, right to delegate, flat sub-award pay, and genuine commercial risk. If most point to “employee”, the WFH debate makes that role’s remote-capability undeniable.
  3. Build an evidence-based refusal framework for WFH notices. With a 21-day clock and a closed list of “significant” and “excessive” grounds, off-the-cuff refusals will not survive VEOHRC conciliation or VCAT.
  4. Don’t treat offshoring as a WFH release valve. Replacing a Victorian role with a misclassified offshore contractor swaps one liability for a worse, compounding one.
  5. Where you genuinely need offshore capability, structure it properly. That means either a real contracting relationship (the worker carries commercial risk, sets hours, serves multiple clients, can delegate) or an Employer of Record. Under an EOR, the provider lawfully employs the worker in their own jurisdiction, while your company holds a straightforward business-to-business relationship with the EOR and contracts for the worker’s labour. You direct the work day to day, but never become the worker’s employer, which is what closes the misclassification gap.

Where AUPY Fits In

This is exactly the terrain we work in. We’re a Paraguay-based consultancy built to help overseas businesses run offshore advisory, operational and project work cleanly. Part of that is acting as your Employer of Record, so we lawfully employ your offshore people here in their own jurisdiction, carry the payroll, tax and statutory obligations, and give you a straight business-to-business relationship rather than an employment one wearing a contractor’s coat.

If Victoria’s WFH Bill has you rethinking which roles sit where, and how your offshore contracts hold up under Pascua, that’s a conversation worth having before September. We can take those roles on as your EOR so the arrangement is structured correctly from the outset.

This article is general commentary on a published Fair Work Commission decision and a Bill currently before the Victorian Parliament. It isn’t legal advice, and the Bill may change before it passes. For specific concerns about your arrangements, talk to a qualified employment lawyer.

Sources used

The Pascua case and employment classification

The Victorian Work from Home Bill

State spread and national implications

Original article