Take Care When Making Employees on Parental Leave Redundant

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Nikita Barsby, Senior Associate

In the recent case of Heraud v Roy Morgan Research Ltd [2016] FCCA 185, the Federal Circuit Court of Australia (FCCA) found that Roy Morgan Research Ltd (RMR) contravened provisions of the Fair Work Act (FW Act) by refusing an employee’s request for flexible working hours and making her redundant while she was on maternity leave.

Under the FW Act, employers are prohibited from taking adverse action against employees because they exercise a workplace right.

Ms Heraud held a senior position at RMR. While on maternity leave the company underwent a significant restructure. Upon requesting to return to work Ms Heraud was told that her role had been made redundant, and was offered redeployment within the company. Following a request for flexible working arrangements the offer of redeployment was withdrawn and her redundancy was brought forward.

Ms Heraud brought seven separate adverse action claims against RMR, citing her workplace right to benefits under the FW Act in respect of pregnancy, parental leave and requests for flexible work arrangements.

Ms Heraud claimed that RMR took adverse action against her by:

  • failing to consult her about changes to her role.
  • failing to return her to her pre-parental leave role.
  • proposing to redeploy her to a role with a reduced status, and
  • terminating her employment.

The FCCA found that RMR did take adverse action against Ms Heraud because:

  1. Ms Heraud had a workplace right to parental leave and was entitled to return to her pre-parental leave position. RMR failed to return her to this position, or to redeploy her to one of a comparative level; and
  2. following Ms Heraud’s request for a flexible work arrangement, RMR withdrew it’s initial offer to redeploy Ms Heraud and instead terminated her employment.
 In each of the three instances above RMR failed to rebut the presumption that the adverse action was for the reason that, or for reasons which included a reason that, Ms Heraud had exercised a workplace right in relation to her pregnancy.

This case highlights the importance of adopting a cautious and thorough approach in effecting redundancies concerning employees who are on parental leave. The existence or exercise of a workplace right need only be one aspect of the decision to make an employee redundant to constitute adverse action and a breach of the general protections provisions of the FW Act.

It is crucially important for employers to document the process of decision-making by reference to non-discriminatory criteria that are not causally related to the employee’s workplace rights. It is good practice to consult with employees being considered for redundancy, even where they don’t have an award or enterprise agreement based right to be consulted, and to document that process. Empathy throughout goes a long way to minimise the risk of employee claims.

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