The nuanced conversation about workplace flexibility just got harder, and small businesses will pay the price, warns DLPA CEO Karlie Cremin after Westpac ruling.
What’s happening: The Fair Work Commission ruled in October 2025 that Westpac Banking Corporation did not have reasonable business grounds for refusing employee Karlene Chandler’s request to work remotely five days per week.
Why this matters: While the decision reinforces existing legal frameworks, workplace experts warn it highlights the critical importance of rigorous documentation and genuine consultation when declining work-from-home requests, particularly for small businesses operating on tight margins.
The recent Westpac flexible work ruling should worry every Australian employer, according to Karlie Cremin, CEO of DLPA (Dynamic Leadership Programs Australia) and Crestcom ANZ. But her concern isn’t about flexibility itself.
“What frustrates me most about the Westpac case isn’t the outcome itself, it’s that their weak defence has effectively shut down the nuanced conversation we desperately need about workplace flexibility,” Cremin states.
The Fair Work Commission found in October 2025 that Westpac did not have reasonable business grounds when refusing part-time employee Karlene Chandler’s request to work from home full-time. The Commission concluded that Westpac’s evidence as to the benefits of office attendance was generalised and insufficient to establish reasonable business grounds.
System-wide impact
Cremin, who works with organisations navigating hybrid work arrangements, argues that individual productivity claims miss broader organisational impacts.
“I constantly hear employees declare, ‘I’m much more productive at home.’ Even if that were true, which research increasingly shows it rarely is, this claim only considers individual output. What about the system-wide impact?” she asks.
“While you may feel more productive in your home office, the broader organisation almost always experiences friction. Communication lags. Spontaneous problem-solving disappears. Knowledge transfer slows to a crawl.”
Deputy President Roberts acknowledged that Westpac accepted it was not mandatory for an individual to be in office to achieve a particular work function, but the bank asserted that teams work together more effectively with face-to-face interaction. However, the Commission found that the evidence did not establish reasonable business grounds, particularly as Chandler’s team was constructed so that face-to-face contact was not an ordinary part of their work.
Workplace law experts say the case puts all Australian employers on notice that company policy alone cannot justify denying flexible arrangements.
Recent research from DLPA with the Australian HR Institute found that remote or isolated work ranks as the third most common cause of psychosocial hazard complaints in Australian workplaces.
Mutual flexibility
“Genuine flexibility means both parties, employer and employee, are flexible to an equal degree,” Cremin emphasises. “The problems arise when that balance tips.”
She points to rising unemployment and increasing redundancies as creating pressure on flexibility arrangements. “When business needs change, a lack of clear agreements will hinder responsiveness. Workforces will push back on assumed rights.”
Chandler, who had been employed by Westpac since 2002, had an extensive history of working remotely, including full-time remote work for periods and attending a corporate office just one day per month at other times. The Commission was persuaded that team collaboration was unlikely to be adversely affected, as the employee had consistently met performance expectations whilst working from home.
Two-tier workplaces
“We see the highest erosion of performance and the greatest increase in risk when the majority work in-office whilst a small percentage operates remotely,” Cremin observes. “It creates a two-tier system that breeds resentment and communication breakdowns.”
The Westpac case centred on specific circumstances. Chandler’s closest corporate offices were approximately two hours’ travel away from her residence and her children’s school, where she was solely responsible for drop-off and pick-up. She initially sought approval to work at a closer bank branch two days per week, which was approved but later reversed.
Documentation matters
“The Westpac ruling has made the path forward more difficult, but not impossible,” Cremin states. “Organisations must now be far more rigorous in documenting business needs and demonstrating genuine consultation. Small businesses, in particular, need to seek proper legal advice before declining requests.”
The case underscores that the connection between the employee’s circumstances and the flexibility requested must be explicit and well-documented. The decision reinforces employers’ obligations to genuinely engage with flexible work requests and provide detailed, individualised justifications for refusals.
Cremin warns that employees also need to recognise flexibility isn’t one-sided. “It requires mutual accommodation, clear agreements, and honest acknowledgement of how individual arrangements impact team performance.”
The debate reflects a broader societal shift about employment expectations. Research shows that hybrid working continues to empower employees, with most CEOs of white-collar businesses believing in its long-term benefits. Almost two-thirds of workers want to see work-from-anywhere models retained, and 50 per cent want the right to choose their work location, according to 2024 research from Ecosystm.
“The conversation we need isn’t about whether flexibility should exist -it should,” Cremin concludes. “It’s about how we structure it fairly, document it properly, and ensure it serves both business sustainability and employee wellbeing. Westpac’s lazy legal strategy has made that conversation significantly harder, and small businesses and their employees will pay the price.”
For businesses navigating these challenges, experts emphasise the importance of providing genuine, individualised assessments when refusing flexibility rather than relying solely on broad policy statements.
Related: What the Westpac WFH case means for SMEs dealing with flexible work requests
