2023 Flexible Working Arrangement Changes for Australian Employers

Flexible work isn’t just a “nice to have” anymore. For many Australian small businesses, it’s a practical way to attract and retain good people, reduce turnover, and keep your operations running smoothly.

At the same time, flexibility can be tricky in a small team. One person shifting hours, working from home, or changing days can impact customer service, coverage, and the workloads of everyone else.

The changes to flexible working arrangements 2023 (introduced through amendments to the Fair Work Act) are designed to make it easier for eligible employees to request flexibility and to strengthen what’s expected of employers when responding. The big shift for small businesses is that these requests now come with clearer process obligations - and stronger dispute options if things aren’t handled properly.

Below, we’ll break down what changed, who it applies to, what “reasonable business grounds” really means in practice, and how you can update your systems so you stay compliant while still protecting the operational needs of your business.

What Actually Changed In 2023 (And Why Small Businesses Should Care)

The changes to flexible working arrangements 2023 strengthened the right to request flexible work under the National Employment Standards (NES) and introduced more robust obligations for employers when considering and responding to requests.

Even if you’ve handled flexible work requests informally in the past (“Sure, let’s try it”), the 2023 changes make it more important to treat these requests as a structured process with proper documentation.

Key Changes You Need To Know

• More employees are eligible to request flexible work (the categories expanded).
• You generally need to discuss the request with the employee and genuinely try to reach an agreement before refusing a request.
• Refusals need more detail, including the reasons and (in many cases) alternative arrangements you can offer.
• Disputes can escalate more easily, including to the Fair Work Commission (FWC), which can deal with disputes about flexible work requests in some circumstances.

For a small business, the practical implication is this: a flexible work request is no longer something you should “wing”. You’ll want a consistent approach that balances employee needs with the reality of running a lean operation.

Who Can Request Flexible Working Arrangements After The 2023 Changes?

Under the NES, eligible employees can request flexible working arrangements, including changes to:

• hours of work (start/finish times or total hours)
• patterns of work (days worked, split shifts, compressed weeks)
• location of work (e.g. working from home, hybrid work)

Eligibility Basics (The Usual Threshold Still Applies)

Generally, an employee can request flexible work if they have:

• completed at least 12 months of employment with you; or
• for casuals: been employed on a regular and systematic basis for at least 12 months and have a reasonable expectation of continuing employment.

This is a good moment to check your documentation is up to date - especially for casuals. If you’re not sure your casual arrangements are properly recorded, it’s worth reviewing your Employment Contract (Casual) approach and ensuring expectations are clear.

Expanded Categories Of Eligible Employees

The 2023 changes expanded who can make a request. While the details can be nuanced, common eligible categories include employees who are:

• parents, or have responsibility for the care, of a child of school age or younger
• carers (within the meaning of the Carer Recognition Act)
• people with disability
• 55 or older
• experiencing family and domestic violence
• providing care or support to an immediate family or household member experiencing family and domestic violence
• pregnant

If you employ a mix of full-time, part-time and casual workers, your best defence against confusion is having clear baseline terms in place (and a process for variations). Many small businesses use a tailored Employment Contract plus a set of internal policies to keep things consistent.

What You Must Do When You Receive A Flexible Work Request

When an eligible employee makes a request, your response shouldn’t be ad hoc. The 2023 changes expect employers to follow a genuine process, and that’s where a lot of small businesses can get caught out.

1. Treat The Request As A Formal Process (Even If You’re A “Handshake” Workplace)

A flexible work request should be in writing and should set out what change the employee wants and why (i.e. which eligibility category applies). In reality, employees may send an email or raise it in a meeting and then follow up in writing.

Internally, you should:

• log the date received
• schedule a discussion with the employee
• assess operational impacts (coverage, costs, supervision, quality, client needs)
• consider trial arrangements or alternatives
• prepare a written response within the required timeframe

2. Discuss The Request And Try To Reach Agreement

One of the most important changes is that employers are expected to actually engage with the employee and consider ways to make flexibility work - rather than defaulting to “we can’t accommodate that”.

In practice, a genuine discussion might cover:

• which parts of the request are essential and which parts are flexible
• whether a temporary arrangement would work (e.g. 3 months, then review)
• how you’ll measure success (performance, availability, response times)
• any changes you’ll need to make to rostering or shift coverage

If your business is roster-heavy (hospitality, retail, healthcare, trades scheduling), it’s worth tightening your rostering process so you can demonstrate consistency and fairness when considering flexibility. This is where having a clear approach to employee rostering really matters.

3. Respond In Writing Within 21 Days

You must give a written response within 21 days (unless a different timeframe applies under a modern award or enterprise agreement).

Your response should clearly state whether you:

• approve the request (as requested),
• approve it with changes (an alternative arrangement), or
• refuse the request (and why).

4. If You Refuse, Your Reasons Must Be Specific (And You Should Offer Alternatives Where Possible)

You can only refuse a request on reasonable business grounds (more on that below). Under the 2023 changes, your refusal needs to do more than simply state “operational requirements”. It should explain:

• the reasonable business grounds for refusal, and
• how those grounds apply to the specific request, and
• that you discussed the request with the employee, and
• any alternative arrangements you can offer (if available).

Tip: if you’re refusing, write as if a third party will read it later (because sometimes they do). A calm, factual explanation is your best protection.

What Counts As “Reasonable Business Grounds” In A Small Business?

This is often the make-or-break issue for employers. The law doesn’t expect you to approve every request, but it does expect you to have legitimate reasons for saying no.

“Reasonable business grounds” can include things like:

• significant cost to the business
• negative impact on efficiency or productivity
• negative impact on customer service (e.g. reduced coverage during peak periods)
• inability to reorganise work among existing employees
• inability to recruit a replacement or additional staff to cover the change

How This Plays Out In Real Life

Small businesses often rely on a few key people, so “reasonable business grounds” can be very real - but you still need to show your working.

For example, you might reasonably refuse a request if:

• your business needs physical onsite presence to deliver the service (e.g. clinic reception, onsite trades, in-store retail), and the employee wants fully remote work
• the employee’s requested days/hours would leave you without coverage during your busiest trading period
• approving the request would require you to pay penalties or additional staffing costs that are not commercially sustainable

However, before refusing, it’s smart to consider whether you could offer a modified option (for example, a trial period, partial work-from-home, or adjusted start/finish times on certain days). This “meet in the middle” approach is often what regulators expect to see from a genuine consultation process.

If changes to flexibility also affect your rosters, you’ll want to make sure any resulting schedule adjustments comply with your award/contract notice obligations - including the minimum notice period for shift changes where relevant.

How To Manage Flexible Work Requests Without Losing Control Of Your Operations

The best flexible work systems do two things at once:

• they give employees a fair, consistent process; and
• they protect the operational needs of the business.

Here’s a practical approach we often recommend to small businesses.

Create A Simple Internal Workflow

• Step 1: Employee submits request in writing.
• Step 2: You acknowledge receipt and set a meeting time.
• Step 3: You meet and discuss options (including alternatives).
• Step 4: You assess the request against operational requirements and the role’s key duties.
• Step 5: You confirm the outcome in writing within 21 days.
• Step 6: If approved, you document the change properly (variation letter / updated contract terms, and any policy reminders).
• Step 7: You schedule a review point (e.g. 4–12 weeks) to confirm the arrangement is working.

Be Careful With Informal “Trial Arrangements”

Trial flexibility can be a great option - but if you do it informally, it can become the “new normal” and lead to disputes later.

If you’re trialling a change, document:

• the start date and end date of the trial
• what “success” looks like (KPIs, responsiveness, coverage)
• how you’ll manage communication and handovers
• how you’ll handle a return to previous arrangements if the trial doesn’t work

Align Flexibility With Rosters, Shift Changes And Coverage Rules

If your team works on rotating rosters, you’ll want to ensure your rostering system can flex without breaching award obligations or creating inconsistent treatment across staff.

As a rule, make sure you have a clear, written process for changing employee rosters so flexibility doesn’t turn into last-minute changes that expose you to complaints or underpayment risk.

What Documents And Policies Should You Update After The 2023 Changes?

The 2023 changes are a good prompt to tighten your employment documents. Even if your business is already accommodating flexible work, having clear documents will reduce misunderstandings and help you stay consistent (especially as you hire more people).

Key Documents To Consider

• Employment Contracts: Your base terms matter because flexibility is often a variation of hours, location, or patterns of work. If your contracts are vague, it’s harder to manage expectations later. Many small businesses review their Employment Contract templates when flexibility becomes a standard part of how they operate.
• Workplace Policies: A clear policy can set out how requests are made, how you assess them, and how you handle review periods. It also helps you be consistent across the team. This is often included within a broader Workplace Policy framework (especially if you’re also managing hybrid work, device use, confidentiality and performance expectations).
• Rostering / Shift Change Processes: If flexibility affects shifts, make sure you can still comply with notice obligations and consult where required under any applicable award or enterprise agreement. A lot of disputes start with “I was told my hours would be flexible” but there’s no consistent process to implement it.

Don’t Forget The “People Risks” (Not Just The Legal Risks)

Flexible work requests often involve sensitive personal circumstances (like caring responsibilities or family and domestic violence). Even when you can’t approve a request, your process should be respectful and confidential.

From a risk perspective, also be mindful of:

• discrimination risks (e.g. treating a request differently due to pregnancy or family responsibilities)
• adverse action risks (e.g. punishing someone for making a workplace right request)
• team culture issues if staff feel flexibility decisions are inconsistent or unfair

Consistency, documentation, and a clear rationale are the practical tools that help you avoid these issues.

Key Takeaways

• The changes to flexible working arrangements in 2023 strengthened employees’ rights to request flexibility and increased what’s expected of employers when responding.
• Eligibility categories expanded, so you may see more requests - especially around caring responsibilities, pregnancy, disability, and family and domestic violence situations.
• You generally need to respond in writing within 21 days and you should genuinely discuss the request and try to reach agreement before refusing.
• You can refuse requests only on reasonable business grounds, and your refusal should clearly explain why those grounds apply to the specific request (and outline alternatives where possible).
• Small businesses should protect themselves by using a consistent internal process, keeping good records, and updating contracts and policies so flexible work doesn’t become unclear or inconsistent.

The information in this article is general only and is not legal advice. If you’d like help reviewing your processes or updating your employment documents to reflect the changes to flexible working arrangements in 2023, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.