Banking on policy: Westpac’s refusal of a flexible work arrangement bounces
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I am a partner in our International HR Services Group in Sydney where I advise our clients on the full spectrum of employment and industrial law issues.
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Australia
I am an Associate in our International HR Services Group in Sydney, where I advise on the full spectrum of employment and industrial law issues.
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Flexible working arrangements (FWAs) allow eligible employees to request changes to their standard working arrangements (such as hours, patterns and/or locations of work) to help balance work with other aspects of their lives. A request for an FWA must be made in writing, explain the details of the changes requested and rationale for the requested change.
On 20 October 2025, the Fair Work Commission found that Westpac Banking Corporation did not have reasonable business grounds for its refusal of a long-serving employee’s request for an FWA to work remotely from her home 5 days per week. The Commission ordered [1] that the bank grant the FWA.
Although the particular circumstances of each employee will be relevant to an employer’s consideration of a request for an FWA, this decision does mean employers will need to think beyond the applicability of a hybrid working policy and a desire for effective communication between teams & stakeholders as sufficient reasons for refusal.
Background
Ms Chandler, a part-time employee in Westpac's Mortgage Operations, Certifications and Settlements Team, had been employed by Westpac since 2002. Ms Chandler had an extensive history of working remotely, including remotely full-time for a period and a different period when she was required to attend a corporate office one day per month.
Westpac’s Hybrid Working Model policy requires employees to attend a corporate office 2 days each week. The closest corporate offices to Ms Chandler's residence and children’s school (where she was solely responsible for drop off and pick up) were approximately 2 hours’ travel away. In December 2024, Ms Chandler sought approval to work at a (closer) bank branch (not a corporate office) 2 days per week. This was initially approved but later reversed. On 17 January 2025, she requested an FWA to work entirely remotely from her home.
Procedural requirements
The Commission found that Westpac did not comply with several requirements of the Fair Work Act 2009 when responding to Ms Chandler’s FWA request, being:
- failing to provide a reason when denying the FWA request;
- failing to discuss the request with Ms Chandler or genuinely try to reach agreement about making changes to her working arrangements; and
- not having regard to the consequences of the refusal for Ms Chandler.
Reasonable business grounds
Despite these procedural inadequacies, Westpac relied substantially on having reasonable business grounds for refusing the request, specifically that the requested arrangements would likely result in a significant loss in efficiency and productivity or have a significant negative impact on customer service.
Westpac also alleged its hybrid work policy was important for enabling effective management of its large workforce and cited benefits of office attendance including fostering collaboration, meaningful engagement with stakeholders, and effective team communication. Westpac accepted that it was not mandatory for an individual to be in office to achieve a particular work function but asserted that the ability of teams to work together effectively was much greater if there was a certain level of face-to-face interaction.
However, the Commission concluded that the evidence did not establish that there were reasonable business grounds for the refusal. It found that Westpac’s evidence as to the benefits was generalised and insufficient to establish reasonable business grounds. The Commission was persuaded that team collaboration was unlikely to be adversely affected in circumstances where Ms Chandler’s team was constructed in such a way that face-to-face contact was not an ordinary part of the job. Critically also, the Commission considered there was no question that Ms Chandler's work could be performed completely remotely as she had already been doing so for a number of years very successfully.
On that basis the Commission ordered Westpac to grant Ms Chandler's FWA request.
Takeaways
This decision serves as an important reminder to employers about their obligations when responding to FWA requests. In particular:
(a) Employers must:
- respond to all FWA requests within 21 days;
- provide detailed reasons for refusal;
- discuss the request with the employee and genuinely try to reach agreement; and
- have regard to the consequences of refusal for the employee.
(b) If refusing a request on reasonable business grounds:
- Generalised assertions about business needs which are not supported by evidence will be insufficient. Broad statements about collaboration, productivity and customer service will not constitute reasonable business grounds without specific evidence demonstrating how the particular employee's remote work would cause significant loss or negative impact.
- Consider the employee’s past performance/employment circumstances. Where an employee has successfully worked remotely for an extended period with high performance, this will likely weigh heavily against arguments that office attendance is necessary for that employee’s performance in the role. If an employer wishes to rely on past performance, it should ensure that it is regularly assessing specific measurements of performance both in office and remotely.
[1] Karlene Chandler v Westpac Banking Corporation [2025] FWC 3115
