Smart work/work smart/work remotely
Solution 1:
I would say no, it's not correct to use "smart working". As well as Edwin's correct observation re pushing the bounds, I have only heard "smart working" to mean "efficient working". In the sense of "work smarter, not harder". I.e. rather than just putting in more effort/time, optimise your approach.
If you mean working from home instead of your usual place of work, "working remotely" or "remote working" is indeed correct.