I’m working from home today: Lessons from Louise v Metcash

Background

The Fair Work Commission has made orders requiring an employer to grant an employee’s request for an exemption from its return to the office mandate.

Catherine Louise was employed by Metcash Trading Limited (Metcash) on a full-time basis in an administrative capacity. She had worked remotely since commencing employment with Metcash during the COVID-19 pandemic. In late 2024, Metcash directed that certain employees work from the office at least three days a week (Direction). The Direction applied to Ms Louise.

Ms Louise sought an exemption from the Direction on the basis that she had a teenage daughter with cystic fibrosis and wished to minimise the risk of being exposed to pathogens in the workplace and bringing those into her household, endangering her daughter.

Metcash declined the request on the basis that “in person connection, team collaboration and making opportunities for regular knowledge sharing are vital to help [Metcash] move forward as a business” and Metcash needed Ms Louise in the office to participate. Metcash offered to modify the Direction to only require Ms Louise to attend the office two days a week, subject to the caveat that she also attended at other times as directed (such as for business critical meetings).

Ms Louise did not accept this proposal and applied to the Fair Work Commission to deal with a dispute about her request for flexible working arrangements.

Commissioner Sloan determined that Metcash had not validly refused the request under s 65A of the Fair Work Act 2009 (Cth) (Act) and made an order requiring Metcash to grant Ms Louise’s request to be exempt from the Direction.

Decision of the Fair Work Commission

An employee to whom any of the circumstances in section 65(1A) apply may request flexible working arrangements if they would like to change their working arrangements because of those circumstances. To be a valid request under the Act, the change requested by the employee must relate to those circumstances. Commissioner Sloan found that Ms Louise’s request was validly made as it was made “because of” her circumstance as a parent of a school aged child, and because her request for an exemption to the Direction “related to” that circumstance.

An employer can only refuse a request if all of the requirements under s 65A(3) are met, being that:

• the employer has held discussions with the employee and genuinely tried to reach agreement;
• those discussions have not resulted in agreement;
• the employer has considered the consequences of the refusal for the employee; and
• the refusal is on reasonable business grounds.

There was no dispute that Metcash had discussed Ms Louise’s request with her and had genuinely tried to reach agreement with her on changes to her working arrangements to accommodate her circumstances and the parties had not reached agreement.

However, Commissioner Sloan found that Metcash did not have regard to the consequences of the refusal for Ms Louise, and that the refusal was not based on reasonable business grounds.

While the Commissioner accepted that Metcash had acknowledged Ms Louise’s personal circumstances and offered a variation to the Direction, the Commissioner held that Metcash fell short of demonstrating “a real appreciation or acceptance of the reasons advanced by Ms Louise for her request, or any acknowledgement of the consequences for her of the request being refused.” The Commissioner observed that this was largely because Metcash had been focused on challenging the validity of the basis on which the request was sought. In this respect, Commissioner Sloan found that Metcash had failed to adduce any evidence to demonstrate how its interest in having employees comply with the Direction outweighed Ms Louise’s interests in wanting to reduce the risk of introducing pathogens into her home.

In support of its argument that its refusal was based on reasonable business grounds, Metcash referred to the decision of Shane Gration v Bendigo Bank (Gration), where Commissioner Platt held that the employer’s refusal of an employee’s request to be exempt from a direction to return to the office due to the need to take care of his daughter, was made on reasonable business grounds. However, the Commission distinguished that case from the present situation, noting that the employer in that case had led evidence as to why it had determined to require employees to return to the office and the resulting benefits that would flow to the business and its employees, and had offered to provide flexibility to allow the employee to provide care for his daughter.

Metcash submitted that its refusal of Ms Louise’s request was based on reasonable business grounds including the need to foster collaboration, improve working relationships and improve employee health and wellbeing by promoting connection. Metcash argued that these reasons were designed to increase the business’ performance which was in the interests of all stakeholders of Metcash. However, the Commissioner found that Metcash had not adduced any evidence to establish these business grounds and as a result there was therefore no evidentiary basis on which the Commission could accept that the refusal was based on reasonable business grounds.

Metcash relied on the terms of Ms Louise’s offer of employment which described Ms Louise’s “location” as “Macquarie Park” and provided that Ms Louise agreed to work from other locations as directed by Metcash. Commissioner Sloan found that the terms of the offer of employment did not assist Metcash, and noted that the purpose of flexible working arrangements is to accommodate the circumstances of individual employees and that may well require a departure from the terms of the employee’s contract.

What does this decision mean for employers?

As businesses wind back remote work arrangements introduced during the COVID-19 pandemic, requests for flexible working arrangements have become an increasingly common avenue for employees seeking to retain remote working arrangements.

The decision highlights the importance of consultation with employees and the need for careful consideration of the consequences for an employee of refusing a flexible work arrangement request. It also reinforces the importance of documented, credible evidence of reasonable business grounds to justify any refusal. Employers should be mindful that relying solely on standard policies or contractual terms may not be sufficient where an employee’s personal circumstances warrant flexibility. In the event that an employee makes an application to the Fair Work Commission, employers should be prepared to adduce evidence as to why there are reasonable business grounds to require employees to work from the office.

Gadens Workplace Advisory and Disputes team is able to assist you with any queries you have in respect of considering and managing requests for flexible working arrangements and advising on how best to mitigate risks.

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Authored by:

George Haros, Partner
Emma Anderson, Special Counsel
Vishmitha De Alwis, Associate