Under the National Employment Standards (NES) set out in the Fair Work Act 2009 (Cth), eligible Australian employees have a statutory right to request flexible working arrangements, including working from home (WFH). This guide outlines the latest 2026 Fair Work Commission (FWC) precedents on "reasonable business grounds" for refusing requests, providing HR leaders with actionable steps to ensure full compliance.

AI-driven dispute surge: Why FWC scrutiny demands robust documentation

Rising Tribunal Caseloads

Data from the Fair Work Commission (FWC) indicates a 70% surge in tribunal applications over recent years. This mounting caseload is largely driven by litigants utilising generative AI tools to rapidly draft and lodge detailed claims in a matter of minutes.

"On the Papers" Reviews

To address mounting caseloads and streamline dispute resolution, the Workplace Relations Legislation Amendment (Building Cooperative Workplaces No. 1) Act 2026 took effect on 7 July 2026. Among other procedural streamlining measures, the legislation allows the FWC to determine certain dismissal-related matters "on the papers"—by written submissions alone without formal hearings, provided both parties consent. While section 65A flexible work disputes still follow conciliation and arbitration pathways, the tribunal's overall shift towards stricter written evidence means HR teams must ensure all refusal documentation is legally robust from the outset.

HR Takeaway

To successfully navigate FWC scrutiny under these streamlined dispute-resolution pathways, Australian employers must substantiate every refusal with contemporaneous, verifiable operational evidence. As the tribunal relies heavily on initial written submissions, maintaining accurate records from the start is essential for HR teams.

FWC Flexible Work Precedents: Lessons from recent WFH refusal rulings

Under section 65A of the Fair Work Act 2009 (Cth), Australian employers can only refuse a flexible working arrangement request on "reasonable business grounds"—statutorily defined to include excessive cost, loss of efficiency or productivity, inability to reorganise existing staff or recruit new personnel, and significant negative impact on customer service—and only after genuine consultation. Recent rulings by the Fair Work Commission (FWC) clarify where these legal boundaries now sit.

Precedent 1: Gurung v Knauf Gypsum Pty Ltd [2026] FWC 2371 — Documented Performance Metrics & Operational Risk

• Case Context: The employer refused a full-time Payroll Officer's request to work remotely while acting as the primary carer for young children during working hours.

• FWC Finding: The FWC upheld the employer's refusal. The employer successfully presented objective evidence showing a marked drop in performance and attention to detail on previous WFH days, proving that uninterrupted focus was required for complex payroll duties.

• Key Lesson for HR: Refusals based on efficiency or productivity losses must be backed by concrete, documented performance data and objective operational risk, rather than subjective assumptions about carer responsibilities.

Precedent 2: Aoyama v FLSA Holdings Pty Ltd [2025] FWC 524 — Unsubstantiated Concerns & Vague Customer Claims

• Case Context: The employer refused an employee's request for an additional WFH day, citing general concerns regarding customer responsiveness, professional perception, and working with a child present.

• FWC Finding: The FWC rejected the employer's arguments as "imprecise and lacking a supportive basis" because the employee consistently met all KPI targets. The Commission ordered the employer to grant the extra WFH day.

• Key Lesson for HR: Speculative assertions about "potential customer impact" carry zero legal weight. Employers must demonstrate actual, measurable detriment to business operations to substantiate a refusal.

Precedent 3: Kliffen v Reapit Employment Services Pty Ltd [2026] FWC 1766 — The Limits of Generic "Team Culture" Arguments

• Case Context: An employer attempted to mandate a full return to the office, citing "team cohesion and workplace culture" to refuse a flexible work request from a long-serving employee with carer responsibilities and a long commute.

• FWC Finding: The FWC found general culture arguments unpersuasive given the employee's proven track record of effective remote work. Using its arbitration powers, the FWC imposed a balanced hybrid compromise (one designated office day per fortnight).

• Key Lesson for HR: Blanket return-to-office policies and generic claims about "culture" will fail under FWC scrutiny. Employers must genuinely explore alternative compromises (such as hybrid models or trial periods) before issuing an outright refusal.

Key Takeaways for Australian HR Leaders

• A refusal can no longer rely on broad company policy or subjective managerial preferences.

• Every refusal notice must contain tailored, evidence-backed business reasons linked to specific role requirements and performance records.
  
  

3 Actionable Steps for Drafting a Compliant Refusal Notice

1. Document the mandatory consultation process

The Fair Work Act 2009 mandates that employers genuinely discuss the request with the employee before issuing a refusal. HR must record meeting dates, key discussion points, and any counter-proposals directly within the formal refusal notice to prove that genuine consultation occurred prior to making a final decision.

2. Detail specific reasonable business grounds with objective data

Explicitly link the refusal to statutory reasonable business grounds under section 65A(5)—such as clear financial cost, lack of capacity to reorganise work, or operational inefficiency. Employers must embed concrete performance metrics, work logs, or objective operational data directly into the response to substantiate why the request cannot be accommodated.

3. Provide a written response within 21 days (and outline alternatives)

Under the NES, employers must issue a written response within 21 days of receiving the request. The notice must explicitly detail any reasonable business grounds for refusal and set out alternative working arrangements offered (such as a hybrid trial or modified hours). While recent precedent (Gurung v Knauf Gypsum) confirmed that a delayed response does not automatically invalidate a refusal if substantive statutory grounds are met, strict adherence to the 21-day window remains best practice to minimise legal risks.

The rapid release of Fair Work Commission (FWC) decisions in 2026 confirms that defending a WFH refusal relies entirely on the quality of your documented evidence. To navigate increasing FWC scrutiny, Australian employers must proactively formalise internal consultation protocols, audit position descriptions, and secure clear operational data long before a dispute arises.

Official sources:

• Federal Register of Legislation — Fair Work Act 2009

• Fair Work Ombudsman — Building Cooperative Workplaces reforms

• Fair Work Ombudsman — Flexible working arrangements