Flexible work arrangements continue to be one of the biggest challenges facing Australian employers. While many businesses have embraced hybrid work, there is often uncertainty about when an employer can lawfully refuse a working-from-home request. A recent Fair Work Commission decision provides valuable guidance and reinforces an important message for business owners – Flexibility must be balanced with the operational needs of the business.

The Fair Work decision

In a recent case involving Macedon Ranges Shire Council, an employee sought to increase his existing working-from-home arrangement from three days per week to four. The employee relied on personal circumstances, including age and fatigue, to support his request. However, the Council refused the application, explaining that regular office attendance was necessary to support

  • Knowledge sharing across the team
  • Collaboration and problem-solving
  • Mentoring and coaching opportunities
  • Team connection and culture
  • Effective service delivery

The Fair Work Commission agreed, finding these were reasonable business grounds for refusing the request. For employers, this is an important reminder that while employees may have a right to request flexible working arrangements, they do not have an automatic right to work from home.

Why this matters for business owners

Since COVID-19, many organisations have shifted towards hybrid work. While flexibility has become an important attraction and retention tool, businesses are now asking an equally important question.

  • How do we maintain productivity, capability and culture if our people are rarely together?
  • This recent decision acknowledges something many business owners experience every day – some of the most valuable work happens outside scheduled meetings.
  • It happens when a new employee overhears an experienced colleague solve a complex problem.
  • It happens when a manager provides immediate coaching after a difficult customer interaction.
  • It happens when teams collaborate, share ideas and learn from each other’s experience.

These moments cannot always be replicated through video calls.

Knowledge sharing is a business asset

One of the strongest aspects of this decision is the Commission’s recognition that knowledge sharing is a legitimate operational requirement. Every business holds valuable organisational knowledge. Without opportunities to transfer that knowledge, organisations can face

  • Reduced productivity
  • Inconsistent decision-making
  • Increased training costs
  • Slower development of new employees
  • Greater reliance on key individuals
  • Increased business risk when experienced employees leave

For growing businesses, protecting this knowledge is critical. If employees spend most of their time working remotely, informal learning opportunities naturally reduce. Over time, this can impact performance, customer service and organisational capability.

Flexible work requests still require genuine consideration

This decision is not a licence to reject every flexible work request. Australian employers remain legally required to genuinely consider requests made under the Fair Work Act, particularly where employees have caring responsibilities, a disability, are over 55 years of age or meet other eligibility requirements.

The key lesson is that decisions must be based on reasonable business grounds, not personal preference. Business owners should be able to clearly explain

  • Why attendance in the workplace is important.
  • What operational impacts the proposed arrangement would create.
  • How collaboration, supervision or customer service may be affected.
  • Whether alternative arrangements have been explored.

Employers who simply respond “We don’t allow working from home” may expose themselves to unnecessary legal risk.

Is your hybrid work policy still fit for purpose?

Many businesses introduced hybrid work arrangements during the pandemic without formally reviewing their policies. Now is an ideal time to ask

  • Does our flexible work policy reflect how our business actually operates?
  • Have we clearly identified which roles genuinely require workplace attendance?
  • Can our managers confidently assess flexible work requests?
  • Are decisions being applied consistently across the business?
  • Are we protecting organisational knowledge and developing future leaders?

Having clear policies and documented decision-making processes not only supports compliance but also creates greater consistency and transparency for employees.

Practical tips for employers

If you receive a request for additional working-from-home days

  • Consider the request on its individual merits.
  • Consult with the employee before making a decision.
  • Assess the operational impact on the business and the broader team.
  • Document your reasons carefully.
  • Explore whether a compromise or trial arrangement is appropriate.
  • Ensure your decision aligns with your Flexible Work Policy and the Fair Work Act.

The bottom line

This Fair Work Commission decision is a timely reminder that good business decisions and employee flexibility are not mutually exclusive. Flexible work remains an important part of modern employment, but businesses are equally entitled to protect collaboration, mentoring, knowledge transfer and organisational capability. The strongest employers are those who balance flexibility with clear operational needs, communicate their reasoning openly and make decisions that are fair, consistent and well documented.

If your business hasn’t reviewed its Flexible Work Policy, Hybrid Work Framework or manager guidelines recently, now is the time. Having clear processes in place will help you confidently manage requests, reduce legal risk and support a productive, connected workforce.

Need help managing Flexible Work requests?

Navigating flexible work requests can be challenging, particularly as businesses strive to balance employee wellbeing with operational requirements. Every request should be considered on its own merits, and having the right policies, documentation and decision-making framework in place is essential.

At HR Cornerstone, we help businesses develop practical, legally compliant flexible work and hybrid work policies, train managers to confidently manage requests, and provide advice when complex situations arise. If you’d like to review your current approach or need support responding to a flexible work request, we’d be happy to help. Contact our team today for practical HR advice that protects your business while supporting a positive workplace culture.