You should be able to wear whatever you want, so long as it's not deliberately provocative to those around you. Whilst this will be somewhat culture sensitive, basic guidelines would be:
- No bad language (swear words, poor grammar ;)).
- Not sexually provocative (i.e. ensure your co-workers can focus on their work, rather than solely on you).
- Appropriate for your role (i.e. take any local health and safety concerns into account; e.g. don't wear a tie if working with a lathe).
Pro Reduced Stress
Laundry is no one's favourite chore, and by removing the restriction of clothing from a small subset of the employee's wardrobe which would need to be washed, ironed and/or polished you free up their free time, giving them more opportunity to destress and thus be more mentally prepared on returning to work.
Whilst some people may work better in smart attire, that doesn't work for everyone. By not forcing a whole group to adhere to one groups preference, you're giving your employees freedom, which is shown to be one of the major factors in employee contentment; giving your company employee motivation for not additional expense.