A recent Fair Work Commission (FWC) ruling involving Westpac Banking Corporation has sent a strong reminder to employers about how requests for flexible or work-from-home (WFH) arrangements must be handled.

In this case, a long-serving Westpac employee who had been working from home full time for five years was asked to return to the office. Having since moved further from Sydney and taken on school drop-off responsibilities, she requested to continue working from home full time. Westpac declined the request, requiring her to attend the office two days per week. The employee then took the matter to the Fair Work Commission (FWC), arguing that the bank’s refusal did not comply with the legal requirements under the Fair Work Act 2009.

The Commission agreed — finding that Westpac:

• Failed to properly consult with the employee before refusing;
• Did not respond in writing within 21 days of the request; and
• Could not demonstrate reasonable business grounds for the refusal.

As a result, the employee was granted permission to work from home full time. While the decision was specific to that case, it’s a clear warning for all employers, even if a business has legitimate operational reasons to prefer in-person work, the way a flexible work request is managed and documented can determine the outcome.

Understanding the Law

Under section 65 of the Fair Work Act, certain employees have the right to request flexible working arrangements, such as WFH, changed hours, or altered patterns of work. This includes employees who are:

• Parents or have caring responsibilities;
• Over 55 years old;
• Living with a disability;
• Experiencing family or domestic violence; or
• Providing care or support to someone affected by family or domestic violence.

Requests must be made in writing and include the reasons and proposed arrangement.

Employer Obligations

When a request is received, an employer must:

1. Discuss the request with the employee and genuinely try to reach an agreement;
2. Consider the consequences for the employee if the request is refused;
3. Provide a written response within 21 days, stating whether the request is approved or refused; and
4. If refusing, clearly outline the reasonable business grounds and how they apply to that employee’s role.

Failure to meet these steps, even if the refusal itself might have been reasonable, can lead to findings of non-compliance.

What Counts as “Reasonable Business Grounds”

Employers can refuse a WFH or flexible work request if there are sound operational reasons, such as:

• A significant loss in productivity or efficiency;
• Unreasonable costs associated with the change;
• The role cannot be effectively performed off-site; or
• The change would negatively impact team supervision, communication, or service delivery.

However, the Fair Work Commission expects specific, evidence-based reasons, not broad statements about teamwork or company culture. For example, an employer should be able to demonstrate how remote work would materially affect performance, customer outcomes, or safety.

When Employers Must Allow WFH

If there are no genuine business grounds to refuse, or if the employee has successfully worked from home for some time without issue, an employer may be required to approve the arrangement. In Westpac’s case, the employee had already proven her ability to perform effectively from home, and the bank’s evidence about collaboration and office culture wasn’t strong enough to justify refusal.

Best Practice Steps for Employers

To ensure compliance and fairness when handling flexible work requests:

1. Have a documented internal process for managing requests.
2. Train managers on their consultation and response obligations.
3. Engage in open discussion with the employee before deciding.
4. Keep written records of the decision-making process and reasons.
5. Tailor decisions to the individual’s role and situation – avoid blanket policies.
6. Respond in writing within 21 days, even if discussions are ongoing.

Key Takeaway

Working from home is not a guaranteed right, but employees do have the right to make a formal request, and employers must handle it lawfully and transparently.

The Westpac case shows that failing the process can be just as risky as making the wrong decision. A well-documented, consultative, and evidence-based approach remains the best protection for employers.

If you’d like help reviewing your company’s flexible work policy, creating compliant response templates, or training managers in this area, our team at Performance Advantage can assist.

If you want to know how to avoid expensive litigation like this and ensure your flexible working arrangement policies are up to date, call us on 0408 897 079 or at suzanne@performanceadvantage.com.au.