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Redundancy during parental leave – Know the risks!

Making an employee redundant is never an easy decision – and doing so whilst they are on parental leave can be even harder.  This recent article by HR Legal who provide legal reviews for eCompliance Training highlights some of the risks and obligations for organisations.

In a recent case, the Federal Circuit Court held that despite a lack of profitability, the employer took adverse action against an employee on parental leave when they failed to return her to her pre-parental leave position and brought forward her redundancy.

Heraud v Roy Morgan Research Ltd [2016]

The employee was an Operations Director for Roy Morgan Research (the employer). She commenced maternity leave which was due to end in July 2014. Due to a loss of clients and profitability, the employer restructured its business resulting in some staff redundancies. The employee was made redundant in June 2014, despite another employee continuing to act in her pre-parental leave position for more than two months after she was made redundant. This other employee was then appointed to the position of Operations Executive, which was similar to her pre-parental leave position of Operations Director.

Court Findings

The Court held that the Operations Director had exercised a workplace right to take maternity leave. At the end of maternity leave, she had a right under the Fair Work Act 2009 (Cth), to return to her pre-parental leave position or, if that position no longer existed, an available position for which she was qualified and which was nearest in status and pay to her pre-parental leave position. The Court rejected the employer’s assertion that the employee was not interested in re-deployment opportunities or a position below Director.

The Court held that the Employer took adverse action against the employee by:

  • Not returning her to her pre-parental leave position for reasons including that she had exercised her workplace right to take maternity leave
  • Withdrawing re-deployment opportunities in the Research Centre and bringing forward her redundancy for reasons including that she exercised her workplace right to request flexible working arrangements.

Lessons for Employers

The case highlights some important obligations of employers:

  • Take all reasonable steps to consult with employees who are on parental leave about a restructure that will significantly affect the employee’s pre-parental leave position
  • Return employees to their pre-parental leave position or if that position no longer exists to a comparable position following parental leave
  • Do not make employees redundant for a prohibited reason such as exercising their workplace right to take maternity leave or to request part-time work.

HR Legal provide assistance to employers about managing redundancy and termination matters. If you require assistance, please contact HR Legal.  eCompliance Training offer a range of online compliance training solutions to help minimise your organisational risk against claims of inappropriate behaviour including discrimination.  Click below for a demonstration.

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This article was produced by HR Legal. It is intended to provide general information only in summary format on legal issues. It does not constitute legal advice, and should not be relied on as such.