Parental Leave and Redundancy
Increasingly, General Protection claims are being made to the Fair Work Commission by employee's who have had their role, or are about have their role, made redundant by their employer purely because they have engaged their right to parental or carer's leave. However, what happens when the reason for a retrenchment of an employee returning from parental leave is actually a legitimate business decision in order to cut costs?
Rights under Fair Work Act
Under section 351 of the Fair Work Act (the Act) it is unlawful for an employer to take adverse action against an employee because of the person's family or carer's responsibilities or pregnancy. In addition, section 84 of the Act requires that when returning from unpaid parental leave an employee is entitled to return to pre parental leave position and/or to a position which the employee is qualified and is nearest in status and pay to the pre parental leave position.
Turnbull v Symantec (Australia) Pty Ltd (2013)
A recent decision by the Federal Circuit Court in the case of Turnbull v Symantec (Australia) Pty Ltd (2013) (Symantec) highlights the difficulty employee's have in demonstrating to the Court that their position was made redundant purely because of engaging a workplace right to parental and carer's leave.
In the Symantec case a financial controller (Ms Turnbull) was retrenched after returning to work after eight (8) months parental leave and was denied the opportunity to be placed in an available position that she was qualified and suited to by the employer. She then filed an application for General Protection claim on the basis that her employer had terminated her employment due to the fact she engaged her workplace rights to parental leave and had family and carer's responsibilities.
In response, the employer maintained that the decision to make the financial controller position redundant was one of several recommendations made by a Senior Manager to restructure the company and cut costs. Unfortunately, Ms Turnbull's position as Financial Controller was one of the position recommended to be cut.
The Court stated that when employee's return to work from parental leave that employers need to take into consideration the following steps to comply with section 84 of the Act where the employee’s original role is no longer available:
- Inform the returning employee of the existence of an available position which the employee is qualified and is suited nearest in status and pay to the pre parental leave position. An available position may be a position that is overseas, or is available in a legal entity separate from the employer;
- Determine whether there are available positions comparable in status and pay with the pre-parental leave position and, if there are two or more such positions, then make the position available to the employee which is nearest in pay and status to the pre-parental leave position; and
- Determine whether an employee, having the qualifications and experience of the employee in question, would seriously consider taking that position when determining whether a position is comparable.
After reviewing the evidence, the Court decided that the employer's decision to make the financial controller position redundant relied on the fact that they no longer required the position to be performed and was not made as a result of Ms Turnbull's decision to engage her right to parental leave or because of her family or carer's responsibilities but because the tasks of the position had already been allocated to existing employees (although this originally occurred due to the taking of the period of parental leave) and there was no need for the position anymore.
In addition, the Court found that even though the employer failed to offer another available role to Ms Turnbull, it is was highly unlikely that Ms Turnbull would have taken the role as it was less salary and carried fewer responsibilities than her pre parental leave position which would not have fulfilled the requirements under section 84 of the Act.
Key points for employers
The Symantec case shows that it is possible for employer's are able to retrench an employee returning from parental leave and not be found to have discriminated against the employee or offend s84 but only in circumstances where they can prove that their is genuine reason for the redundancy. Where a role has been made genuinely redundant, and in order to satisfy the Court that there are no other comparable roles which the employee could fulfil pursuant to section 84 of the Act, it is recommended that employers undertake the following steps:
- Recognise any vacant positions within the company which the employee may be qualified and suited for. This could include positions available in related businesses, including locations interstate or overseas;
- Provide the employee with details of vacant positions and consult with them to understand their views about being employed in those roles. Ensure that the employee is consulted so that a final decision can be made regarding the suitability of the employee for the role;
- If the employee is not interested in the roles then the employer can proceed with the redundancy. However, where the employee is interested in the vacant positions it is the employer who decides whether the employee is qualified and/or suited for the vacant positions; and
- Ensure that thorough records of all consultation, meeting and discussions with the employee are maintained.
If you have any questions regarding redundancy and/or parental leave please do not hesitate to contact one of the lawyers in our Workplace Law team.Back