Rather you issuing the letter, I recommend obtaining application from the employee to work from home. Tell him to write clearly what terms and conditions he is ready to oblige. On receipt of the letter, get it approved by the approving authority and issue the approval letter. In this letter, write under conditions this permission could get revoked.
By the way, have you devised the method to mark the employee's attendance? WFH is fine but then occasionally differences crop up on the attendance.