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Flexible working arrangements, redundancy and discrimination

Employers need to be aware of the National Employment Standards (NES) in relation to flexible working arrangements and parental leave provisions if they do not want to be found to have unlawfully discriminated. Employers are now required to respond in writing to requests for flexible working arrangements and care needs to be taken that any decision to reject any request is not discriminatory.

Recent discrimination case

While not specifically related to the as yet untested Flexibility provisions, a recent case1 demonstrates many of the principles involved.

The case involved a company that was found guilty of discriminating against a pregnant employee and ordered to pay $6607.58 in damages. The complainant, Ms Stern, received compensation for her loss of earnings, change in her status of employment, and humiliation and emotional distress after her employment status was unilaterally changed from full-time to part-time.

Ms Stern was a beauty therapist working in a salon branch of the Depilation & Skincare Pty Ltd in Templestowe. After Ms Stern became aware of her pregnancy she approached her salon directors, Ms Simonetti and Ms Argyrou, for reduced hours while still retaining her full-time employment status. Due to scheduling difficulties Ms Simonetti and Ms Argyrou decided to instead reduce her hours by unilaterally changing her employment status to part-time.

After the busy holiday period the salon experienced a significant downturn in business. The directors were advised by their accountant, Mr McNeill, to reduce staff overheads. After consideration, Ms Simonetti and Ms Argyrou decided the most cost effective way would be to make a part-time staff member redundant. The only part-time staff member at this time was Ms Stern, and as a result she was let go. The court accepted that the decision was not malicious or directly related to Ms Stern's pregnancy. The court ruled, however, that Ms Stern was made redundant because of her part-time status which was given because she was pregnant. The decision was therefore found to be discriminatory.

In this instance the company had no written employment agreement in place, meaning there was no clear documentation regarding hours of work or the manner in which these might be altered.

Warning to employers

Businesses need to be aware of the new NES and the Modern award obligations and to further understand their obligations to parents and expectant parents. Employers should have clear policies and procedures in place that reflect the new legislative requirements. Employers should also ensure that they can evidence defensible and consistent decision making processes that are non-discriminatory.

A business that is well prepared will be better positioned to prevent costly legal action and ensure equitable treatment of its staff.

1 - Stern v Depilation & Skincare Pty Ltd (Anti-Discrimination) [2009] VCAT

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