Publications

In a significant decision for employers managing hybrid work models (and for employees who work, or seek to work, flexibly), the Fair Work Commission (FWC) has ruled that Westpac Banking Corporation failed to comply with its obligations under the Fair Work Act 2009 (Cth) (FWA) when refusing an employee’s request to work remotely for caring reasons.

Deputy President Roberts found that Westpac did not genuinely engage with the employee, Ms Karlene Chandler, before refusing her request, and that its decision lacked reasonable business grounds. The FWC ordered Westpac to grant the arrangement, reinforcing that procedural compliance and substantive justification are essential when responding to flexible work requests.

Background

Ms Karlene Chandler had a long history of working remotely during her employment with Westpac. From 2017, when she was part of Westpac’s Change Team, she attended the corporate office only one day per week. In mid-2018, she moved to the Discharges Team and worked remotely full-time until commencing maternity leave in February 2019. On returning in April 2021, she continued to work from home on a full-time basis until August 2022.

At that time, an arrangement was introduced requiring her to attend Westpac’s Kogarah corporate office one day per month. This reflected an agreed accommodation of her family responsibilities. Later, Westpac implemented a Hybrid Working Model requiring all staff to attend a corporate office two days per week. The nearest offices to Ms Chandler’s home were at Kogarah and Parramatta, each around two hours’ travel from her children’s school.

The flexible work request

In December 2024, Ms Chandler sought approval to perform her in-office days at the Bowral branch, significantly closer to her home and children’s school. The request was approved by Acting Senior Operations Manager Mr Brand as a short-term “olive branch” to assist her transition back to office-based work.

In January 2025, however, Senior Operations Manager Mr Potts reversed that approval. On 17 January 2025, Ms Chandler lodged a formal request under section 65 of the FWA seeking to perform her in-office days at Bowral instead of Kogarah.

On 18 March 2025, Team Leader Ms Foote advised that her request had been refused by Mr Potts. No reasons were given at that time. When Ms Chandler sought clarification, Mr Potts replied by email citing Westpac’s hybrid work policy and stating that “working from home is no substitution for childcare” and that remote arrangements “may change at Westpac’s discretion.”

Further correspondence followed. On 14 April 2025, Executive Manager Ms Higgins wrote to the Finance Sector Union (FSU), which represented Ms Chandler, requesting further information and suggesting a phased return to corporate attendance. Westpac proposed that Ms Chandler attend one day per week at a corporate office and one day in a branch, progressing to two days at a corporate office by January 2026.

Statutory framework

Section 65 of the FWA allows eligible employees to request flexible working arrangements due to certain personal circumstances, including parental responsibilities. Section 65A sets out the requirements for responding to such requests.

Under section 65A(1), an employer must provide a written response within 21 days. That response must state whether the request is granted, refused, or varied by agreement. Critically, under section 65A(3), an employer may refuse a request only if they have:

• discussed the request with the employee;
• genuinely tried to reach an agreement;
• had regard to the consequences of refusal; and
• based the refusal on reasonable business grounds.

Subsection 65A(6) further requires that if a request is refused, the written response must include the reasons for refusal, the business grounds relied upon, and information about the employee’s right to challenge the decision under section 65B.

Reasonable business grounds are defined broadly and can include cost implications, impacts on efficiency or customer service, or the impracticality of altering other employees’ arrangements. However, as previous authorities have shown, a mere assertion of policy or managerial discretion will not satisfy the requirement to demonstrate reasonable business grounds.

The FWC’s findings

Deputy President Roberts found that Westpac’s handling of Ms Chandler’s request failed to comply with the statutory requirements. In particular, Westpac did not provide its decision in writing within the 21-day timeframe and did not adequately engage in discussions aimed at reaching an agreement.

The initial refusal email from Mr Potts did not identify any reasonable business grounds as required by section 65A(6). Instead, it simply referred to Westpac’s policy and contained a generalised comment about childcare, which the FWC found to be “dismissive of the applicant’s genuine attempt to reconcile her work and family responsibilities.”

Westpac later attempted to remedy these deficiencies by engaging with the FSU and proposing phased alternatives. However, the FWC concluded that these later discussions could not retrospectively cure the procedural defects in its initial response. The statutory process requires genuine consultation and a compliant written response within 21 days, both of which were lacking.

The FWC held that Westpac’s refusal was not based on demonstrably reasonable business grounds. No evidence was presented to show that Ms Chandler working from the Bowral branch would cause operational difficulty, inefficiency, or impact customer service. Instead, Westpac’s refusal appeared to rely on adherence to policy for its own sake.

Outcome and implications

The FWC found that Westpac had breached section 65A of the FWA and ordered the bank to reconsider Ms Chandler’s request in compliance with the statutory framework.

This decision reinforces the FWC’s expectations that employers must take flexible work requests seriously and handle them in a procedurally correct and substantively fair manner. As the FWC has observed, “the statutory right to request flexible working arrangements is intended to promote genuine discussion and accommodation of employees’ circumstances, not to be dismissed by rote reference to policy.”

The decision offers several important lessons for employers managing flexible work requests. Employers must provide a written response within the statutory 21-day period, ensuring that the employee is informed of the outcome and the reasons for it without unnecessary delay. Equally important is the requirement for genuine engagement. The legislation expects a real discussion between employer and employee, focused on exploring possible accommodations and reaching a workable agreement where practicable.

The case emphasises the importance of providing detailed and transparent reasoning. Where a request is refused, an employer must clearly articulate the reasonable business grounds relied upon and explain how those grounds apply to the employee’s specific circumstances. A generic or formulaic reference to policy is insufficient. As this case illustrates, reliance on a broad hybrid work policy, without demonstrating a genuine operational need for strict adherence, will not satisfy the statutory standard.

Ultimately, the decision reinforces that even large organisations with well-established hybrid working frameworks must apply those policies flexibly and lawfully. Employers are required to approach each request on its merits, with a clear focus on procedural fairness, transparent communication, and substantive consideration of the employee’s personal situation.

The case serves as a timely reminder that procedural compliance and genuine fairness are not merely formalities under the FWA but are central to the legislative intent behind flexible work provisions. Employers who treat the process as a meaningful dialogue, rather than a policy-driven formality, are far more likely to comply with the FWA and maintain constructive, sustainable working relationships with their employees.

This article was published on 29 October by Carroll & O’Dea Lawyers and is based on the relevant state of the law (legislation, regulations and case law) at that date for the jurisdiction in which it is published. Please note this article does not constitute legal advice. If you ever need legal advice or want to discuss a legal problem, please contact us to see if we can help. You can reach us on 1800 059 278 or via the Contact us page on our website.