When Flexible Work Requests Fall Short: Lessons from the FWC’s Costco Ruling

The recent Fair Work Commission (FWC) decision in Tracey Smith v Costco Wholesale Australia Pty Ltd – [2025] FWC 2691 is a sobering reminder that not every application for flexible working arrangements under section 65 of the Fair Work Act 2009 (Cth) will succeed. The case highlights the evidentiary burden on employees seeking to rely on statutory rights to alter their working arrangements, particularly when those requests are based on carer responsibilities or age.

The Background

Tracey Smith, a maintenance assistant at Costco’s Canberra warehouse, had enjoyed a flexible schedule since 2018. Her shifts typically ran from 6am to 2:30pm Monday to Thursday, and 6am to 12:30pm on Sundays. In April 2025, she sought to compress her hours into four days, starting earlier in the mornings so that she could free up Thursdays.

When Flexible Work Requests Fall Short: Lessons from the FWC’s Costco Ruling

Her stated reasons were twofold: caring responsibilities for her infant grandson, and the need to support her partner, who had ongoing health issues following a workplace injury. Additionally, Smith noted she was over 55 years old, which qualifies as a circumstance under section 65(1A)(d) of the Act.

Costco’s Refusal

Costco rejected the proposal, albeit belatedly. Its reasons were practical:

• A 4am start would leave her unsupervised, creating safety concerns.

• Compressing shifts into longer days would trigger overtime obligations, increasing operational costs.

The company’s refusal led Smith to lodge a dispute with the FWC, which could not be resolved through conciliation.

The Commission’s Findings

Commissioner Stephen Crawford acknowledged the worker’s genuine personal circumstances but found her request legally invalid because it lacked the necessary evidentiary foundation.

• Carer responsibilities for her partner: While her partner had suffered a serious injury, Smith provided no medical evidence demonstrating that she was his carer within the meaning of the Carer Recognition Act 2010. Occasional references to physiotherapy appointments were not enough.

• Care for her grandson: Although the grandson was part of her immediate family, the law requires evidence that she was responsible for the care of the child. Commissioner Crawford found she had not established such responsibility.

• Age-related grounds: While being over 55 does trigger eligibility to request flexible arrangements, Smith failed to show any connection—or “nexus”—between her age and the specific changes she sought.

The Commissioner concluded that her application was not a valid request under section 65. The dispute was dismissed, though he encouraged further dialogue between Smith and Costco to explore other workable solutions.

Broader Implications

This ruling reflects an emerging trend: the FWC is scrutinising flexible work applications more closely, particularly since the Secure Jobs, Better Pay reforms expanded the Commission’s powers to arbitrate such disputes. Academic commentary has already criticised the Commission for placing heavy evidentiary demands on workers, which risks undermining the very purpose of the new provisions.

For employees, the message is clear:

• Evidence is critical. Medical certificates, care arrangements, and detailed explanations should accompany any request.

• The request must directly link to one of the statutory grounds (carer duties, disability, age, parental responsibilities, etc.).

• Simply being eligible to make a request does not guarantee that the request will be considered valid.

For employers, this case underscores the importance of responding promptly and providing reasoned grounds for refusal. A late or poorly reasoned refusal could still be challenged.

Conclusion

The Costco case illustrates the tension between workers’ lived realities—juggling caring responsibilities and ageing in the workforce—and the strict statutory requirements of the Fair Work Act. While Commissioner Crawford recognised Smith’s circumstances as “completely understandable,” without proper evidence her request failed at law.

As flexible work continues to shape the modern employment landscape, this case serves as a warning: the success of such requests will often come down not only to fairness or compassion but to the rigour of the evidence placed before the Commission.