Two developments in Australian workplace law landed within weeks of each other in mid-2026, and the tension between them has direct implications for how HR teams document, communicate, and defend flexible-work decisions. The Fair Work Commission (FWC) upheld a council's refusal to grant a 55-year-old employee an extra work-from-home day, confirming that employers who build a defensible operational record can hold refusals under Section 65 of the Fair Work Act 2009. In parallel, the Victorian government introduced the Equal Opportunity Amendment (Work from Home) Bill 2026, proposing a statutory entitlement to two WFH days per week under state anti-discrimination law, a framework that the Australian Industry Group (Ai Group) and allied employer bodies are actively lobbying to withdraw.

For People and Culture leaders managing Victorian headcount, or advising boards on national policy settings, the practical question is no longer whether flexibility arrangements are contested terrain. It is which regulatory framework governs a given refusal, how the two regimes interact, and what the internal documentation trail needs to look like before a decision goes to the FWC or to the Victorian Civil and Administrative Tribunal (VCAT).

What the FWC actually decided

The Commission's reasoning turned on the reasonable business grounds test embedded in Section 65 of the Fair Work Act 2009. Being aged 55 or older is one of the qualifying circumstances that give an employee the right to make a formal flexible-work request under the National Employment Standards (NES). That right opens the door to a request; it does not compel approval. The council demonstrated that operational impact, supervision requirements, and team cohesion provided sufficient grounds to hold the line at three WFH days per week. The Commission accepted that reasoning.

The ruling sits within a pattern. Recent FWC decisions involving Knauf and AGL applied the same logic: where an employer can point to documented operational impact, role-specific supervision needs, or demonstrable collaboration costs, the Commission has been prepared to back refusals. The signal for HR is that eligibility under Section 65 of the Fair Work Act 2009 creates a procedural obligation on employers to engage genuinely with the request; it does not shift the substantive burden of proof toward granting it.

Victoria's bill changes the default

On 16 June 2026, the Victorian government introduced the Equal Opportunity Amendment (Work from Home) Bill 2026 to Parliament, with a commencement date targeted for 1 September 2026. The mechanism is an amendment to the Equal Opportunity Act 2010 (Vic), not a change to the federal Fair Work Act 2009. The Bill proposes a statutory entitlement for eligible employees to work from home two days per week, with employers required to cover reasonable costs and provide appropriate equipment.

The structural implication is material. If the Bill passes, refusals in Victoria would be constrained by a codified statutory test sitting within anti-discrimination law. Decision-making would need to be documented, reasoned, and evidence-based to a standard higher than what many organisations currently apply. Legal commentary from employment law practices including Kennedys and K&L Gates has noted that Victorian employers, including those with workforces spanning multiple states, would face an obligation set that differs materially from what applies under the federal framework alone.

Employer associations have registered their opposition. The Australian Industry Group (Ai Group) and the Business Council of Australia (BCA) have publicly called on the Allan Government to withdraw the Bill, characterising the legislation as disproportionate regulatory burden. That opposition has moved into formal channels: industry submissions to the Senate Standing Committee on Education and Employment inquiry closed in February 2026, and the Bill has attracted organised pushback from peak employer bodies.

The pincer for HR: two frameworks, one workforce

If both the Victorian Bill and the current FWC posture hold, HR teams with Victorian staff will be operating under two overlapping frameworks simultaneously:

• The federal Section 65 route under the Fair Work Act 2009, where the FWC continues to credit documented operational grounds for refusal and gives employers meaningful latitude when those grounds are specific and role-level.
• A Victorian statutory entitlement sitting inside anti-discrimination law under the Equal Opportunity Act 2010 (Vic) as amended, where the presumption tilts toward granting two WFH days and refusals require structured justification under a codified test.

For multi-state employers, the operational risk is inconsistent handling. A refusal that survives scrutiny in Sydney under the federal framework may not hold in Melbourne once the Victorian regime commences. The internal governance question is whether flexible-work policy is set nationally to the strictest applicable standard, or split by jurisdiction with documented rules for which framework governs which employee population. Both approaches carry compliance risk; neither eliminates it. The Australian HR Institute (AHRI) has consistently advised member organisations that jurisdictional overlaps in employment law require explicit policy architecture, not just manager discretion.

Where retention pressure concentrates

The FWC ruling is operationally neutral in its reasoning, and that has workforce-planning implications worth modelling. Employees aged 55 and over are one of the qualifying categories under Section 65 of the Fair Work Act 2009, alongside carers, employees with disability, and those experiencing family or domestic violence. The Commission's recent willingness to back refusals confirms that being in an eligible category does not, in practice, translate to a guaranteed flexibility outcome.

For HR, this creates a retention risk rather than a compliance question. If the FWC continues to defer to employer reasoning, candidates over 50 assessing an offer will look past the statutory language to the employer's actual practice: how many requests have been refused, on what grounds, and in which teams. Employer-brand exposure sits with the practice, not the policy document. Organisations that document refusals carelessly, or apply them inconsistently across similar roles, create avoidable risk on both the compliance and attraction fronts.

Workforce planners running pay and flexibility benchmarks for Victorian operations specifically should model a scenario where two WFH days become the market floor from September 2026, not the market ceiling. That reframing has direct consequences for how compensating differentials work when a candidate compares offers across state lines. A Sydney-based role without a formal WFH entitlement may look materially different against a Melbourne-based role carrying a statutory two-day guarantee.

What to tighten now

Regardless of whether the Victorian Bill passes in its current form, the FWC line of decisions has already raised the evidentiary bar. HR teams that want refusals to hold up at the Fair Work Commission or at VCAT should be tightening three things now:

• Role-level operational rationale. Generic return-to-office statements are the weakest ground under the reasonable business grounds test. Documented, role-specific reasoning about supervision requirements, collaboration dependencies, or task-interruption cost is what the Commission has been crediting in recent decisions.
• Consultation trail. Section 65 of the Fair Work Act 2009 requires genuine discussion with the employee before a refusal is issued. Records of that conversation, alternatives considered, and reasons why alternatives were not viable are the documents tribunals examine first.
• Consistency across comparable requests. A refusal is more defensible when the employer can demonstrate the same operational test was applied to comparable roles, not selective treatment that could suggest discriminatory intent under the Age Discrimination Act 2004 or the relevant state equal opportunity framework.

The Victorian Bill, if it commences on 1 September 2026, will import a statutory test that codifies much of what the FWC has been asking employers to do informally. Organisations that build the process discipline now, role-level reasoning, documented consultation, cross-role consistency, will not need to retrofit it under regulatory pressure after the Bill commences. The Australian HR Institute (AHRI) Certification framework covers exactly this kind of policy architecture as a core competency for senior practitioners.

Key takeaways for HR and People leaders

• The FWC has upheld employer refusals of flexible-work requests where operational grounds are role-specific and documented, including for employees over 55 qualifying under Section 65 of the Fair Work Act 2009.
• Victoria's Equal Opportunity Amendment (Work from Home) Bill 2026 proposes a statutory entitlement to two WFH days per week under state anti-discrimination law, with commencement targeted for 1 September 2026.
• The Australian Industry Group (Ai Group) and the Business Council of Australia (BCA) are lobbying against the Victorian Bill; the legislative outcome is not settled.
• Multi-state employers face a material split between the federal Fair Work Act 2009 framework and a possible Victorian regime, and should determine now whether to standardise nationally to the strictest applicable standard or manage by jurisdiction with explicit policy rules.
• Under the Age Discrimination Act 2004, inconsistent application of flexible-work refusals across comparable roles carries discrimination risk independent of either the FWC or Victorian framework.
• The evidentiary quality of refusal decisions, specifically role-level reasoning, consultation records, and cross-role consistency, is the single largest determinant of whether a refusal survives review under either framework.