On 26 June 2026, a decision was handed down in the Fair Work Commission for Rabin Gurung v Knauf Gypsum Pty Ltd [2026] FWC 2371 declined to order an employer to grant a Payroll Officer’s request to work from home on Mondays and Fridays.

Commissioner Matheson found that the employer had reasonable business grounds to refuse, because the employee could not credibly perform a complex payroll function while acting as primary carer for his two children, aged two and four.

The key takeaways from this matter were that:

• Previous work-from-home arrangements do not create an ongoing entitlement;
• Employers may reassess requests where circumstances have changed. Refusals should be supported by evidence, including operational requirements and documented performance concerns;
• Employers should genuinely consult with employees and consider reasonable alternative requirements before outright refusing requests;
• A late response will not necessarily invalidate a refusal if the employer otherwise complies with the substantive requirements of Section 65A of the Fair Work Act 2009 (Cth); and
• Clear written responses and evidence of reasonable business grounds remain critical to defending a refusal.

What happened

During the Covid-19 pandemic, the Employer implemented work-from-home arrangements. In May 2024, the Employer introduced a hybrid work policy under which the employee was approved to work from home on Mondays and Fridays. The policy, however, expressly provided that employees working under a hybrid arrangement could not also be the primary carer of primary school-aged or younger children during business hours.

The employee, a full-time payroll officer, requested a flexible working arrangement under section 65 of the Act to work from home every Monday and Friday so that he could care for his two children aged two and four, who remained at home in his care during those days.

In September 2025, the Employer decided to discontinue the hybrid work policy with effect from 1 January 2026.

Following the policy change, the employee submitted a formal flexible working request under section 65, seeking to continue working from home on Mondays and Fridays because he was now the primary carer for his children on those days.

The employer refused, citing the need for uninterrupted focus in payroll processing, a documented drop in performance, and unmet development targets.

After meeting with the employee on several occasions and proposing alternative arrangements, including:

• compressed hours;
• split shifts; and
• part-time work.

The Employer’s written response, although provided outside the 21-day period required by the Act, identified the reasonable business grounds for refusal, outlined the alternative arrangements, and considered and informed the employee of his dispute rights.

The employee declined each of the alternatives offered by the Employer. The employee then referred the dispute to the Commission under section 65B and 65C of the Act.

Why did the Refusal Hold Up?

On 26 June 2026, the Commission found that the employer had reasonable business grounds for refusing the request.

In particular, it accepted that:

• The employee’s payroll role required sustained concentration, accuracy, and minimal interruptions.
• Caring for two children aged two and four whilst working created a real risk of interruptions, errors, and reduced efficiency.
• The employer had identified genuine performance concerns supported by the employee’s recent performance review, including reduced attention to detail and the need for greater supervision.
• The employer had genuinely attempted to accommodate the employee by proposing several alternative working arrangements before refusing the request.

A late response was not fatal

Although the employer did not provide its written response within the 21-day period required by Section 65 of the Act, the Commission held that this did not invalidate the refusal.

The response ultimately contained the relevant information required by Section 65(6), and the Commission retains a broad discretion under Section 65 as to whether and what orders to make.

The Commission declined to make any order requiring the Employer to provide a further response, finding that the request had been adequately addressed despite the delay.

What this means for employers

The decision demonstrates that employers may lawfully refuse a flexible work request where reasonable business grounds are supported by evidence. In particular, employers should:

• consult genuinely with employees before making a decision
• identify and document operational or performance concerns relevant to the question
• consider and propose reasonable alternatives where possible
• ensure any written response complies with section 65A

Refusing a flexible work request is defensible where the objection is to the practical incompatibility of the work with the arrangement, not to caring responsibilities in the abstract.

Document the discussions, put real alternatives in writing, and make sure any performance concerns are recorded contemporaneously rather than assembled after the request arrives. Commissioner Matheson also encouraged the parties to keep negotiating.

If you are assessing a flexible work request or responding to a s 65B dispute, contact Sini Popovic, Senior Associate, Fariza Ali, Solicitor or Arkja Singh, Solicitor.

This information is general in nature and does not constitute legal advice.