Keeping Up with ESG in Australia – July 2026

Our monthly ESG bulletin provides a targeted snapshot of key developments we see as reflecting the “must know” trends in the Australian market. In this edition, we spotlight whistleblower regime developments and the Government’s new proposal for a criminal offence for failing to prevent modern slavery in supply chains.

Key highlights

1. In the Spotlight:
   1. Corporate whistleblower regime - appellate guidance and statutory review
   2. Proposed criminal offence for failing to prevent modern slavery in supply chains
2. Sustainable data centre investment
3. 50 episodes in: HSF Kramer ‘Third Wheel’ podcast on ESG in Australia
4. ESG enforcement and litigation update
   1. Domestic updates
      1. Ten Australians file case over Australian coal and gas exports at the United Nations 
      2. Ad Standards finds that Salmon Tasmania advertising breached Environmental Claims Code
   2. International updates
      1. New Zealand proposes to amend its Climate Change Response Act
      2. Greenpeace countersuit against Energy Transfer
      3. TotalEnergies ordered to identify and disclose measures to address climate risks resulting from Scope 3 emissions from the use of its oil and gas products
5. Victoria’s draft Adaptation Action Plans 2027-31
6. The Biodiversity Council releases report on nature-related impacts and dependencies of Australia's ASX200 companies
7. Queensland's review of its Environmental Offsets Framework
8. AASB releases internal staff paper including market observations on first wave of AASB S2 reporting
9. Victoria to legislate the right to work from home

In the Spotlight:

a. Corporate whistleblower regime - appellate guidance and statutory review

The corporate whistleblower regime has seen significant activity in recent months, with the Full Federal Court handing down the first appellate decision on the regime and Treasury commencing a long-awaited statutory review of Australia's tax and corporate whistleblowing laws.

The Full Federal Court of Australia has handed down the first appellate decision on the corporate whistleblower protection regime under Part 9.4AAA of the Corporations Act 2001 (Cth) (Corporations Act), in Reiche v Neometals Ltd [2026] FCAFC 53. The decision is significant as it clarifies when an employer's detrimental conduct (such as termination or redundancy) towards an employee will contravene the anti-victimisation provisions, and the requisite state of mind and causal connection required for liability to arise. The Full Federal Court (Snaden, Raper and Neskovcin JJ) unanimously dismissed Mr Reiche's appeal, which arose from the redundancy of his role as "Head of Recycling" at Neometals Limited following a significant management reorganisation.

• Requisite State of Mind: The Full Federal Court confirmed that a decision-maker does not need to know or understand that a disclosure attracts legal protection under the whistleblower regime, and there is no requirement that the decision-maker be familiar with the legislation or appreciate the legal consequences of what has been disclosed. Instead, a company may be exposed to liability where a decision-maker holds a subjective belief or suspicion that an alleged whistleblower has raised, is raising, or may raise concerns, and that those concerns relate to misconduct or an improper state of affairs within the company or a related entity.
• Causal Connection: The Full Court also confirmed that not every connection between a disclosure and a subsequent decision which has detrimental consequences for the alleged whistleblower will give rise to liability; the decision-maker's awareness of the disclosure must have been a substantial and operative factor. That is, something that actually moved them to act. If the disclosure was merely part of the background or was considered but did not materially influence the outcome, that will not be enough to establish a claim.

Mr Reiche has since filed an application for special leave to appeal to the High Court. For more information consider our Briefing Note.

Separately, Treasury has commenced a consultation to inform a review of the tax and corporate whistleblowing regimes which were reformed in 2019 by the Treasury Laws Amendment (Enhancing Whistleblower Protections) Act 2019 (Cth). The 2019 Act included a requirement for a review of the tax and corporate whistleblowing regimes to be undertaken as soon as practicable five years after the 2019 amendments commenced. The review will consider whether the tax and corporate whistleblowing regimes are fit for purpose, examining scope and coverage, access to justice for whistleblowers, administration and regulation, effectiveness in incentivising disclosers and disincentivising misconduct, and interactions with other regimes. The closing date for submissions is 29 July 2026.

b. Proposed criminal offence for failing to prevent modern slavery in supply chains

The Australian Government has announced reforms that would introduce criminal liability for large companies (>$100m revenue) that fail to prevent modern slavery in their supply chains, as well as civil penalties for those that do not comply with their existing reporting obligations in the Modern Slavery Act 2018 (Cth). Companies will not be liable where they can demonstrate that they have taken reasonable steps to prevent modern slavery, giving rise to an urgent need for businesses to review and update their human rights due diligence processes, including reviewing how steps are taken to address any issues found in that due diligence, and measuring how effective those steps have been.

The Australian Government will launch a consultation on the details of the new offence, including whether a deferred prosecution agreement mechanism will be available to companies and a possible remedies scheme for victims. This new regime represents a step-change in Australia’s approach to corporate accountability for modern slavery. It follows a number of recent reforms and investigations around the world targeting modern slavery in supply chains, including the reintroduction of the wide-reaching human rights due diligence obligations in the EU’s Corporate Sustainability Due Diligence Directive, and the US Trade Representative’s push for more countries to introduce import bans on goods manufactured using forced labour.

It also represents an extension of this new model for corporate liability, building on Australia’s relatively new ‘failure to prevent’ foreign bribery offence, as well as growing use of this mechanism for various forms of corporate liability in the UK. The Australian Government has not yet specified when it expects to introduce the new offence and penalties, but large companies should consider themselves on notice that modern slavery statements alone will no longer be sufficient to discharge their human rights obligations.

For further detail on increasing regulatory scrutiny over forced labour in global supply chains, particularly in the EU and UK, see our briefing.

Sustainable data centre investment

Australia's data centre sector is growing rapidly, driven by AI, cloud computing and a surging digital economy. As investment scales, expectations around sustainability, energy efficiency and social licence are also on the rise. Recent government policy, new industry frameworks and the development of sustainable finance taxonomies are collectively shaping the pathway for responsible growth.

The investment opportunity

The scale of opportunity in Australian digital infrastructure is significant. The Clean Energy Finance Corporation (CEFC) has projected that AI, cloud computing and digital infrastructure could attract between $85 to $135 billion in investment over the next decade, with data centre capacity expected to rise from 1.35 GW today, to between 4.7 GW - 7.4 GW by 2035. In 2025, data centre investment was already identified as a meaningful driver of business investment and GDP growth in Australia, with AI-enabled automation projected to contribute up to $600 billion to GDP by 2030.

This growth is underpinned by a sharp post-COVID rise in digital activity, with internet traffic growing by more than 20% annually since 2020. According to the CEFC, Australia is well-positioned to capture this investment, due to its access to clean energy and its growing data centre industry, which already compares favourably on efficiency metrics.

However, without additional renewable energy and storage, the Climate Council has projected that data centre expansion could lift New South Wales wholesale power prices by 26% and Victorian prices by 23% by 2035. Similarly, grid emissions across the National Electricity Market could increase by 14% (approximately 6 million tonnes of CO₂ annually). The CEFC has identified that the addition of 3.2 GW of renewable generation and 1.9 GW of battery storage by 2035 could mitigate these price increases and neutralise the additional emissions.

Government expectations: a social license framework

Earlier this year the Federal Government announced a set of expectations of data centre and AI infrastructure developers (Data Centre Expectations), signalling that proposals which are not closely aligned with national interests will not be prioritised in Commonwealth regulatory assessments. The expectations cover five key areas:

• National interest: Operators should consider Australia’s data sovereignty and national security, how to protect sensitive and personal data, and how to limit community impact; while proactively maintaining social license through open engagement with local communities.
• Energy transition: New data centres should not exert upward pressure on energy prices and must make a positive contribution to Australia's energy transition, including by securing new clean energy generation and storage, minimising emissions and supporting grid stability.
• Water efficiency: Facilities should adopt efficient cooling technologies, use non-potable water where possible, and engage proactively with water utilities and First Nations peoples in relation to location and sourcing decisions.
• Workforce and skills: Operators are expected to create fair, secure and well-paid jobs, invest in domestic workforce development, and collaborate with governments, unions and training providers.
• Research and local capability: Large-scale compute providers, including hyperscalers and neoclouds, should contribute to research and innovation, and enable access to compute for Australian start-ups, researchers and not-for-profits on favourable terms.

In line with these expectations, the Commonwealth now requires all data centre services it procures to meet a five-star National Australian Built Environment Rating System (NABERS) rating (equivalent to a PUE of 1.34).

Incoming requirements for data centres

Prime Minister Albanese has recently announced new Australian Standards for AI, building on the above Data Centre Expectations. Requirements will include "a legal obligation [for Data Centres] to underwrite their own new power supply, pay their full share of connection costs so energy bills are not impacted, reduce power when needed to strengthen the grid, and be as water efficient as possible".

The announcement indicated the Federal Government’s intention to work with States and Territories to address location of data centres, and input of local communities. It is not yet clear what mechanisms are proposed to address this in light of the different planning and regulatory regimes applicable in each jurisdiction.

The Albanese Government will move to immediately institute an Office of AI within the Prime Minister’s office and to legislate these standards in 2027. The Australian Standards for AI will largely target new data centres used for AI inference processing and model training.

50 episodes in: HSF Kramer ‘Third Wheel’ podcast on ESG in Australia

After a brief hiatus, HSF Kramer is re-launching its ‘Third Wheel’ podcast series. In each episode different HSF Kramer teams take the wheel to de-brief on topical ESG matters from across Australia.

Tune into our two newly released episodes where we reflect on and explore early trends from the first round of climate reporting disclosures.

In episode 50 we share our initial observations, highlight recurring hurdles or challenges, and point to areas where reporting is already showing real progress. 

In episode 51 we unpack key takeaways from the first round of sustainability reporting and explore how they can be applied in practice for future reporters. We also take a closer look at ASIC’s early observations and share our perspective on what these mean, and how companies can consider them going forward.

These episodes, along with our past editions, are available here.

ESG enforcement and litigation update

a. Domestic updates

i. Ten Australians file case over Australian coal and gas exports at the United Nations 

On 20 June 2026, ten Australian citizens filed a communication against the Australian Government before the United Nations Human Rights Committee (UNHRC). Labelled as the ‘Hard Truths’ case, it is the first claim filed in an international court or body against a country for climate harm since the International Court of Justice’s advisory opinion last year that states have a legal duty to prevent significant climate harm. The communication alleges that Australia's ongoing support for fossil fuel production is driving climate harms that violate Australians’ rights to life, privacy, family and home, and First Nations peoples' rights to culture.

The claimants include First Nations leaders, young people, people living with disability and chronic illness, and community advocates - each alleging specific climate-related harms including bushfires, extreme heat, flooding and toxic algal blooms affecting their homes and cultural practices. 

The claimants are seeking relief from the UNHRC, by way of: 

1. Declaration that Australia’s continuing acts and omissions related to the production of fossil fuels for export are incompatible with its human rights obligations to prevent a global average temperature increase of 1.5°C above preindustrial levels. 
2. Declaration that Australia is violating the claimants’ human rights. 
3. Recommendation that Australia establish a process to review the compatibility of its fossil fuel exports with pathways to limit warming to 1.5°C. 
4. Recommendation that Australia urgently and rapidly implement a plan to phase out the production of fossil fuels for export to the extent necessary to ensure alignment with a 1.5°C pathway. 

Recommendation that Australia pause approvals for fossil fuel production projects for export until it complies with recommendations (c) and (d) above.

ii. Ad Standards finds that Salmon Tasmania advertising breached Environmental Claims Code

The Australian Ad Standards Community Panel (Panel) has published a decision in relation to an advertising campaign run by Salmon Tasmania showing that the fishing pens used by the advertiser do not disturb the underwater environment. A complaint was received on the grounds that the ad made untrue claims about the impact of salmon farming on the marine environment, including about the accuracy of the footage filmed beneath the salmon pens. The Panel found that the advertisement was in breach of section 2.1 of the Australian Association of National Advertisers’ Environmental Claims Code, as the advertisement created an overall impression that would likely mislead the target customer by suggesting the conditions under one Nubeena salmon pen are representative of all salmon pens. This is because the Panel deemed the intention of the ad to be to correct prevailing misconceptions about the impact such salmon farms have on the environment and ocean floor, as the target customer would have been community members who are unsure of, or have concerns about, the environmental impact of salmon farming in general. While Salmon Tasmania has confirmed it has removed the advertisement from all media channels, it has also reportedly sought an independent review of the Ad Standards decision.

b. International updates

i. New Zealand proposes to amend its Climate Change Response Act

On 12 May 2026, the New Zealand Government announced its plans to amend the Climate Change Response Act 2002 to prevent findings of tortious liability for greenhouse gas emissions. The Climate Change Response (Tort Liability) Amendment Bill passed its first reading on 2 July 2026 and sits before a select committee, with submissions closing 30 July 2026.

In practice, the amendment would stop the ongoing tort-based claims in Smith v Fonterra brought by climate activist Mike Smith against seven major emitters. The trial is currently set for the High Court in April 2027, having been reinstated by the Supreme Court in 2024.

However, the Bill faces several issues. Mr Smith has filed judicial review proceedings challenging the lawfulness of the Government's decision-making process. In addition, the New Zealand Labour Party has committed to repeal the legislation if it wins November's general election. The Government also voted in favour of the UN General Assembly’s resolution to endorse the International Court of Justice's 2025 climate change advisory opinion. 

Given this uncertain landscape, New Zealand businesses are closely watching the Bill’s progress and continuing to consider its potential consequences for how climate-related risk is assessed, disclosed and priced.

ii. Greenpeace countersuit against Energy Transfer

The District Court of Amsterdam has allowed Greenpeace’s countersuit against Energy Transfer.

The complex litigation is a response to a lawsuit by Energy Transfer against Greenpeace in the US. It concerns claims by Energy Transfer that Greenpeace and other groups engaged in trespass, nuisance and deprivation of property access in relation to an Energy Transfer pipeline during 2016-2017. Ultimately, the US litigation resulted in the Greenpeace defendants being held liable for more than US$345 million.

Greenpeace, a company established in Amsterdam, brought an action in the District Court of Amsterdam seeking declaratory judgment that the US lawsuits brought by Energy Transfer constitute a "SLAPP” (strategic lawsuit against public participation), contrary to Dutch law which implements EU Directive 2024/1069.

In the Amsterdam District Court, Energy Transfer argued that the Dutch court did not have jurisdiction to hear the claim or, alternatively, that the proceedings should be stayed until the US proceedings are decided (and, thereafter, dismissed for want of jurisdiction).

The Amsterdam District Court rejected Energy Transfer’s contentions and permitted the Dutch case to proceed. 

The District Court held that EU Directive 2024/1069 (the “SLAPP Directive”) did not directly apply to the proceedings so as to confer jurisdiction. However, the Court held that it otherwise had jurisdiction under the relevant rules of civil procedure, on the basis that Greenpeace (a Dutch company) suffered reputational damage in the Netherlands sufficient to enliven the Court's jurisdiction.

The effect of the District Court’s ruling is that the Dutch case can proceed on its merits. The District Court has given Energy Transfer until mid-July to file its defence on the merits.

iii. TotalEnergies ordered to identify and disclose measures to address climate risks resulting from Scope 3 emissions from the use of its oil and gas products

On 25 June 2026, a Paris Court ordered TotalEnergies to update its legally mandated vigilance plan to identify and disclose the steps it is taking to mitigate climate risks linked to Scope 3 emissions from the downstream use of its oil and gas products. The proceedings were brought by a group of NGOs, which sought orders requiring TotalEnergies to identify climate-related risks and harms arising from its activities and to adopt measures to reduce its greenhouse gas emissions in line with the Paris Agreement. The Court, however, declined to order the more prescriptive relief sought, including orders requiring TotalEnergies to halt or limit overseas exploration and production or to adopt binding emissions targets. 

The Court held that emissions arising from the use of the group's products and services form part of the emissions resulting from their activities for the purposes of the vigilance law. It based this conclusion on the inherent link between oil and gas production and the subsequent combustion of those products by end users, observing that the extraction, refining and marketing of a barrel of oil inevitably leads to its combustion and the release of a measurable quantity of CO₂. Accordingly, the Court found that TotalEnergies' vigilance plan was incomplete and ordered the company to revise the plan within six months by incorporating Scope 3 emissions into its risk mapping together with measures addressing those risks. The proceedings have been adjourned until January 2027, when the Court will review the revised plan and consider whether the measures adopted are adequate.

The decision is likely to be of broader significance for emissions-intensive sectors, particularly where a substantial proportion of emissions arise from the use of products by customers rather than from a company's own operations. It demonstrates the willingness of courts to treat downstream emissions as relevant to corporate climate due diligence obligations, even where companies are not held directly responsible for all end-user emissions.

Victoria’s draft Adaptation Action Plans 2027-31

The Victorian Government is preparing its second set of Adaptation Action Plans (AAPs). AAPs are system-based planning mechanisms established under the Climate Action Act 2017 (Vic) (the Act), which set out proposed 'climate change adaptation actions' that the government will take in the ensuing five-year period. 'Climate change adaptation actions' are intended to address the risks presented by climate change whilst maximising the opportunities created by decisive and timely action. Under the Act, the Victorian Government is required to renew and build upon the AAPs every five years, for eight statewide systems that are "vulnerable to the impacts of climate change or vital to building Victoria's climate resilience".

The eight statewide systems that AAPs are being prepared for are:

• Built Environment: relates to cities, towns and regional areas;
• Education and Training: relates to the services engaged in education and training, including future workplace needs;
• Energy: relates to generation, storage, distribution, transmission of energy;
• Health and Human Services: relates to the prevention of disease resulting from or associated with food, water or the environment;
• Natural Environment: relates to land-based and aquatic ecosystems;
• Primary Production: relates to agriculture, infrastructure, productive fisheries, plantation forestry, workforce and communities;
• Transport: relates to transport networks, facilities, operations, vehicles and services; and
• Water Cycle: relates to water supply, sewerage, drainage and flood management.

 Notably, the Draft Energy AAP includes actions directed at driving greater investment in climate-resilient energy infrastructure. The Built Environment AAP also addresses climate resilience, including an action to embed climate risk in built environment decision-making processes to ensure that development outcomes respond to current and future climate hazards. The 2027-31 Adaptation Action Plans were open for public submission on the Engage Victoria website.

The Biodiversity Council releases report on nature-related impacts and dependencies of Australia's ASX200 companies

The Biodiversity Council has published Cracking the Code: Using Nature Data to Understand the Impact of the ASX200, a report assessing the nature-related impacts and dependencies of Australia’s 200 largest listed companies.

Key findings

Drawing on three assessment tools (GIST Impact, MSCI and S&P), the report finds that utilities, energy, materials, industrials and consumer staples consistently rank as the highest-impact sectors for biodiversity loss, driven primarily by greenhouse gas emissions, water consumption and land use pressures. Sectors that appear to have lower impact when assessed on direct operations, such as financials, IT and consumer staples, still exert significant influence on nature through their capital allocation, energy and water demand. The report acknowledges that while certain sectors tend on average to be more impactful, company-specific factors play a significant role in determining nature-related impacts.

Recommendations

The report sets out recommended actions for companies and investors. For investors, capital allocation, investment stewardship, policy advocacy and company-specific engagement were identified as the primary levers for addressing nature-related risk. The report notes that effective stewardship may target systemic leverage points, such as policy advocacy for stronger nature laws or government investment in nature opportunities, rather than focusing solely on the highest direct-impact companies.

For companies, recommended actions include assessing biodiversity impacts across operations, supply chains and financial exposures, prioritising material risks using consistent methods, setting time-bound targets following the mitigation hierarchy, and aligning disclosures with the TNFD framework. The report cautions that nature-positive initiatives undertaken without corresponding efforts to understand and address a company’s underlying business impacts risk being characterised as greenwashing.

Queensland's review of its Environmental Offsets Framework

The office of Queensland's Minister for the Environment and Tourism (the Minister) has released a discussion paper on the state's Environmental Offsets Framework (Discussion Paper). The Discussion Paper invites feedback to inform the government’s review of the Environmental Offsets Act 2014 (Qld), the Environmental Offsets Regulation 2014 (Qld), and the Environmental Offsets Policy (together, the EO Framework). The EO Framework establishes the rules, conditions, and regulation for environmental offsets in Queensland. Environmental offsets are used to "compensate for unavoidable significant impacts on prescribed environmental matters, such as highly valuable species and ecosystems", and may be required as a condition of an approval where a development involves a prescribed activity.

 The Discussion Paper sets out three focus areas for reform:

1. Unlocking the Offsets Account

The Offsets Account has received over $129.2 million in total financial settlement payments since its establishment in 2014, with over 90 per cent of offset conditions fulfilled through financial settlements. However, the government has experienced challenges in delivering financial settlement offset projects, driven by limitations in land supply, competition with environmental markets, increasing land values and difficulties in securing landholder commitment over long timeframes. To address these issues, the Discussion Paper proposes several solutions, including:

• improving engagement with the land sector;
• partnering with entities such as Natural Resource Management Groups to deliver offset projects at scale; and
•  supporting the development of an advanced offset market and expanded protected area estate.

2. Reforming the Financial Offset Calculator

The Discussion Paper states that Queensland's environmental offset delivery has "lagged behind the pace and scale of development impacts, resulting in net environmental loss and significant financial liability for the state", attributing this to deficiencies in the method of calculating financial settlement offsets. These deficiencies include:

• outdated on-ground management and landholder incentive costs;
• 'sliding scale' discounts that reduce funds available for offset delivery;
• insufficient offset area multipliers; and
• the absence of contingency margins for uncertainties such as natural disasters.

 The Discussion Paper seeks stakeholder feedback to inform its review of the financial offset calculator, which it proposes to undertake this year.

3. Improving Regulation

The Discussion Paper identifies several regulatory issues within the EO Framework, including:

• outdated and unclear legislation;
• inconsistent and complex rules for locating offset sites;
• unnecessary procedural delays; and
• restrictive requirements for indirect offsets. 

The regulatory deficiencies have contributed to significant delays and added costs for proponents and government alike. Proposed reforms include improving consistency in the rules for locating offset sites, streamlining payment processes for State infrastructure projects, enabling Environmental Offset Protection Areas and advanced offsets to be used for Commonwealth offsets, and removing inflexible requirements for connectivity offsets.

Public submissions on the Discussion Paper via the Queensland Government's In the Loop Engagement Hub are now closed. We will continue to monitor developments arising from the EO Framework review.

AASB releases internal staff paper including market observations on first wave of AASB S2 reporting

Australia’s first wave of mandatory climate-related financial disclosures has begun to reveal how Group 1 entities are navigating the new AASB S2 requirements. The AASB has released an implementation monitoring update reviewing disclosures from 33 Group 1 listed entities with 31 December 2025 year-ends and examining broader market commentary by major professional services firms to assess how reporting practices are evolving.

Overall, the report suggests that, while reporting quality and consistency have improved compared to earlier voluntary climate-related disclosures, significant variability remains across the market in report length, structure, and depth of disclosure.

Key observations include:

• Climate-related risks are being disclosed more consistently than opportunities: all 33 reviewed entities reported at least one climate-related risk, while only 79% identified opportunities.
• Time horizons remain an area of entity judgement: Entities are adopting different approaches to defining short-, medium- and long-term periods, and the link between disclosed time horizons and strategic planning cycles was often not clearly articulated.
• Scenario analysis remains diverse: While most entities relied on recognised external frameworks, including the IPCC, NGFS and IEA, there was significant variation in the extent to which scenario analyses were qualitative or quantitative, the number of scenarios and temperature outcomes adopted, and the clarity with which their relevance to assessing resilience was explained.
• Disclosure of anticipated financial effects remains an area of developing practice: While all reviewed entities provided qualitative disclosures regarding climate-related risks and opportunities, only 64% provided a quantitative assessment, reflecting factors including measurement uncertainty and the difficulty of isolating climate-related effects from broader business outcomes.
• Relief from Scope 3 emissions reporting was common: 91% of entities relied upon first-year transition relief from Scope 3 GHG emissions reporting requirements, although 25% of those entities voluntarily provided Scope 3 information.
• Trends in structure and presentation are emerging: 85% of the reviewed entities incorporated disclosures within their annual reports, with 94% structuring those disclosures around a four-pillar sequence (Strategy, Governance, Risk Management and Metrics and Targets). Longer reports did not necessarily produce clearer disclosure outcomes, particularly where material information was not clearly distinguished from voluntary disclosure content.

The report ultimately emphasises that, while compliance with AASB S2 is underway, market expectations and reporting practices continue to evolve. For entities preparing their first sustainability disclosures, the AASB's findings offer useful insight into both emerging reporting norms and areas where significant diversity in practice persists across the market.

Victoria to legislate the right to work from home

On 17 June 2026, the Victorian Government introduced the Equal Opportunity Amendment (Work from Home) Bill 2026 (Vic) (EO Bill) into the Legislative Assembly. The EO Bill proposes to amend the Equal Opportunity Act 2010 (Vic) to enact a right to work from home for most permanent and regular casual employees (excluding, among others, employees who are on probation or undertaking an apprenticeship, traineeship, internship, graduate program, work experience program or similar program). If passed, this will represent a significant new compliance obligation for Victorian employers, with greater rights for employees compared to the existing Federal framework.

The EO Bill provides for commencement on 1 September 2026 for employers with 15 or more employees, and 1 July 2027 for employers with fewer than 15 employees. The proposed right would entitle eligible employees to work from home for up to two days per week, pro-rated for those working fewer than 38 hours. Notably, no ‘reason’ is required to access the right, unlike the Fair Work Act 2009 (Cth) framework which limits flexible working requests to employees with specific qualifying circumstances.

Employers who receive a written work from home notice must respond in writing within 21 days, either confirming the arrangement, offering an alternative, or refusing on the basis that it would not be ‘reasonable’. ‘Reasonableness’ can only be assessed by reference to an exhaustive list of factors that set a high bar, being:

• the inherent requirements of the role;
• the impact on the employer, including if working from home would have:
• a significant decrease in productivity or efficiency; 
• an adverse impact on any person's safety;
• a significant adverse impact on supervision, training or professional development;
• a significant adverse impact on the capacity to build relationships with stakeholders, clients, or customers; 
• a significant adverse impact on customer service outcomes;
• a significant adverse impact on confidentiality or data protection; 
• excessive financial costs;
• whether it would require impractical working arrangement changes or new hirings; and
• any prescribed matters.

Employers must also cover the reasonable costs of enabling home working, including essential equipment, hardware, software and secure IT system access. Questions around constitutional validity, particularly given Victoria's referral of most workplace law-making powers to the Commonwealth, remain unresolved and are likely to be the subject of ongoing debate as the EO Bill progresses.

With the proposed commencement date approaching, employers should consider:

• reviewing role-based expectations around on-site presence and documenting the rationale clearly;
• updating working from home, cybersecurity and acceptable use policies;
• considering any health and safety steps such as risk assessments and implementation of controls required to accommodate home working; 
• engaging IT teams to identify and address any technical barriers to home working and ensuring confidentiality and cyber security controls are effective;
• assessing consultation obligations under enterprise agreements or other employee instruments that may be triggered by policy changes;
• considering how the Victorian framework interacts with flexible working arrangements across other Australian jurisdictions.

For a detailed analysis of the EO Bill's provisions, see our full Briefing Note: Australia: Victoria to legislate the right to work from home: how will it work for employers?

For clients with a presence in the United Kingdom, South African Development Community or Asia, we also publish trackers of ESG publications and developments for these regions at ESG Notes.

ESG thought leadership

To read more of our ESG thought leadership, please see:

• The Third Wheel Podcast Series: ESG in Australia
• ESG Notes and Climate Change Notes,
• ESG, Sustainability and Responsible Business offering
• Unlocking ESG Investment in Australia