Over the past decade, how and where work is performed has undergone a seismic shift, accelerated by technological advancements, changes in workforce demographics and the COVID-19 pandemic.

In Australia, flexibility in work arrangements has been enthusiastically embraced by employees, with employees demanding more control over how, where, and when they work. Many employees now expect flexibility, but employers retain the right to put reasonable limits in place.

The legal framework governing flexible work arrangements in Australia

In Australia, formal flexible work arrangements (FWA) are governed by various legislative and regulatory frameworks. The Fair Work Act 2009 (Cth) (FW Act) and industrial instruments provide a legal framework for formal work flexibility agreements. In particular, the FW Act provides employees with the right to request a FWA when they meet specific criteria.

Requesting and responding to a flexible work arrangement request

Employees have a statutory right to request a FWA if they have been employed for at least 12 months and one of the following applies:

• They are a parent or carer of a child under 18 years of age;
• They have a disability;
• They are aged 55 or older; or
• They are experiencing domestic violence.

Refusal of FWA by employers

The decision to refuse a request from an eligible employee for a FWA can only be made on reasonable business grounds after following the processes in the FW Act. To lawfully refuse a request for a FWA, an employer must:

1. Follow the correct procedure

• The employer must provide a formal, written response to the employee’s written request within 21 days.
• Before making a final decision, the employer must genuinely discuss the request with the employee and try to reach an agreement that might work for both parties.
• The employer should explore potential alternative arrangements that could accommodate the employee’s circumstances, even if the final arrangement is not the exact one requested.
• The employer must have regard to the impact a refusal would have on the employee’s circumstances and demonstrate this in their response.

2. Base the refusal on “reasonable business grounds”

• Employers can refuse a request for a FWA on reasonable business grounds, such as the impact on business productivity, the ability to meet customer demands, or the need for a certain staffing level. However, the refusal must be real, justify the refusal, and be explained in writing to the employee.
• The FW Act prohibits employers from discriminating against employees who request a FWA arrangement, whether or not that request is approved.

3. Provide a detailed written explanation

A written refusal must clearly state the specific reasonable business grounds the employer is relying on, and how they apply to the request. It should also mention any alternative changes the employer is willing to make and inform the employee of their right to dispute the refusal with the Fair Work Commission.

Modern Awards and Enterprise Agreements

Many employees in Australia are covered by Awards or Enterprise Agreements that contain additional provisions regarding flexible working arrangements. Employers should ensure they comply with the relevant provisions.

Work health and safety (WHS) laws

Employers have a duty to ensure home workspaces are safe, and other flexible arrangements such as compressed weeks, are otherwise safe, under the safety legislation in each jurisdiction.

This includes considerations such as:

• Ergonomics of home office setups;
• Mental health and wellbeing concerns;
• The risks associated with isolation or overwork; and
• Any personal issues that may arise at home, including the presence of animals and domestic violence in the home.

Employers should have a method for assessing risks for employees working from home, or working flexible rosters, and ensure employees are properly trained to identify and mitigate risks.

In the case of State of New South Wales (Western NSW Local Health District) v Knight [2023] NSWPICPD 63 (10 October 2023) an employee injured by a neighbour’s dog while working from home was awarded workers’ compensation, as the incident was deemed to have occurred ‘at work’.

How the courts and commissions are approaching FWA requests

In Terry Hutchinson v Cleanco Queensland Ltd [2025] FWC 2887 (13 October 2025), the Fair Work Commission upheld an employer’s refusal to make a temporary flexible work arrangement permanent, finding that the request for a flexible work arrangement was not sufficiently linked to the employee’s caring responsibilities. Further, the Fair Work Commission found that the arrangement would have posed a potential safety risk to another employee as they would be required to work alone at times.

In Paper Australia Pty Ltd t/a Opal Australian Paper v Anthony May [2025] FWCFB 224 (1 October 2025), the Fair Work Commission found that an employee’s right under the FW Act to request flexible working arrangements cannot be overridden by an enterprise agreement. In this case, a long-serving employee with caring responsibilities, had his long-standing informal flexible arrangement withdrawn when his employer cited rostering rules in the enterprise agreement. The Full Bench found that relying solely on the agreement’s fixed roster clause was not a “reasonable business ground” for refusal under the FW Act, and that the FW Act prevails where an enterprise agreement is inconsistent.

In the case of Application by The Support People Pty Ltd [2025] FWC 2628 (10 September 2025), an employer made an application to reduce the redundancy pay due to an employee on the basis that a reduced-hours office role was a reasonable alternative to a hybrid position. The Fair Work Commission refused the application, finding that the employer had not obtained ‘acceptable alternative employment’ for the employee.

Strategies for employers managing flexible work arrangements

Be deliberate about flexible work arrangements

The case law is clear that informal flexible work arrangements, particularly those that develop over time, can make a formal request for a flexible work arrangement difficult to refuse. Employers should ensure that policies and procedures are clear around flexible work arrangements and that employees do not create their own arrangements without clear approval.

Communicate and document

Employers should ensure that all agreements with employees allowing them to work flexibly, whether in a formal FWA or not, are documented in writing. This includes clear terms around:

• Work hours: Define expectations for availability and performance during remote work and define core hours during which employees are expected to be available, whether working from home or in the office.
• Location of work: Specify where employees are permitted to work.
• Equipment and resources: Clarify the responsibilities for providing equipment, technology, and resources.
• Technology and communication tools: Ensure employees have access to the tools they need to work efficiently, regardless of their location.
• Performance management: Adapt performance management processes to ensure that remote employees are held accountable for their work output and quality, rather than just time spent working.

Employers should schedule regular check-ins, team meetings, and virtual collaboration to bridge the gap between remote working employees, employees working flexible rosters, and the organisation.

Training, education and compliance

Employers should consider implementing training on common health and safety issues, such as:

• Mental health and wellbeing;
• Time management and self-discipline; and
• Ergonomics and safe working practices at home.

Ensure the employer has clearly defined reasonable business grounds before refusing a FWA request

Employers should ensure that any refusal to enter into a formal FWA with an employee can be substantiated by clear evidence of a reasonable business ground that is sufficiently specific.

This article was written by Danielle Flint, Partner, and Jasmyn Joseph, Law Graduate.