The commute time is time spent for work, but having no productivity. A one hour commute on a 40 hour week means 20% of time wasted unproductively. The employee needs to calculate the commute in his salary options, even if the company isn’t directly paying for it.
So a rational company would only reject remote work, if the on site productivity is so much higher than the remote productivity, that it offsets the commute loss. For the shop floor that is a no brainer. For office work it is indicative of terrible management.