He's using a reductio ad absurdem arguement. He takes the principle of "a company valuing productivity over happiness" and extends it to an absurd degree to argue that company's shouldn't prohibit telecommuting in order to increase productivity. It's a pretty stupid argument that is equivalent to saying companies shouldn't do things that are in their own self-interest.
You're right that I'm using reductio ad absurdum, but my goal is to call into question the idea that productivity is all that matters. If we're going to argue things based solely on productivity, then all sorts of absurd policies become viable (Adderall, not hiring pregnant women, not hiring people with disabilities)
You're wrong. Policies like you listed are not viable because of either government regulation or the mere fact that a company will not be able to hire and retain good people if it treats them like shit. You offer an absurd and totally unrealistic situation.
It's also naive to expect companies to be concerned with anything other that making a profit. At any moment, another company can come in and implement changes that the first company was unwilling to make and undercut it's business.
