Restructuring parental leave mum out of the business not okay, says Fed Court – the importance of sound policy, procedure and advice

Restructuring parental leave mum out of the business not okay, says Federal Court – the importance of sound policy, procedure and advice

A recent case before the Federal Circuit Court highlights the importance of employers understanding the various state and federal Government workplace laws that apply to parental leave. Specifically, this relates to the employee’s rights when they request to return to work when the business has been restructured during their leave period.

In this case, the Operations Director at a market research organisation commenced maternity leave in 2013 and was due to return to her job on 2 July 2014. The Operations Director had worked for the employer since September 2012.

While the employee was on parental leave, the employer restructured the business and made some employees redundant. The restructure was the result of significant decreases in revenue, increased competition and the loss of several major clients.

The employee was made redundant effective 27 June 2014.

The employee made seven claims of adverse actions against the employer, including that it failed to consult her on changes to her substantive role while she was on maternity leave or to return her to her position or the restructured role at the end of her maternity leave. It also, she alleged, denied her flexible working arrangements request and brought forward her redundancy.

The judge said that the operations director had exercised a workplace right to take maternity leave and was entitled under s84 to return to her pre-parental leave position.

If that position no longer existed, as was the case for the operations director, she was entitled to return to a position she was qualified and suited to, and nearest in status and pay to her pre-parental leave position.

The judge found the company failed to offer the operations director any viable redeployment options.

The operations director also argued that the company took adverse action against her under s342(1) by altering her position to her prejudice and withdrawing an offer for a research centre position.

The judge accepted that the employer created an expectation that the operations director would be redeployed in the research centre, at least in the position of project manager.

Its failure to make that position available also contravened s340(1) of the Act, she found.

The employer had also engaged in adverse action when it refused to accommodate the operations director’s flexible working requests.

The operations director argued that she was not returned to her substantive position at the end of her maternity leave and retrenched earlier in June because she had asked to return to work part-time.

This was despite the company not making the role made redundant until the end of July and another employee (who was later promoted) acting in it for three months.

The company acknowledged the reason for bringing forward the operations director’s redundancy and keeping another employee in the role in an acting capacity was the request for flexible working arrangements.

Management argued that “it was more sensible” for the acting employee to remain in the position and “did not make sense” to bring somebody in to complete a project for a short period.

But the judge found that the operations director had exercised her right to take parental leave and was entitled to the benefit of s65 of the Act.

The employee was both entitled to, and had exercised, a workplace right within the meaning of s341 of the Act.

Throughout the proceedings, the employer highlighted its strong record of promoting equality in the workplace. This included providing evidence about the numbers of women employed in senior positions and its history of offering workplace flexibility to those with family commitments.

The judge, however, did not accept that this altered the substantive claim on behalf of the employee. This is a clear message to employers that having a culture of workplace flexibility is not in itself a legal defence. Employers have a responsibility to ensure that workplace policies and procedures not only reflect current legislation but are appropriately applied to ensure that employees on parental leave are treated fairly when a business restructure coincides with their leave period.

Employers can guard against adverse action claims such as this by engaging an iHR specialist to help review Policies and Procedures and to advise on how to successfully reintegrate employee’s returning from parental leave into the workforce when the business has been restructured.

It is especially crucial that organisations that operate non-head office sites and franchises have access to specialised human resources advisers who can guide them through the various state and territory laws in respect to parental leave and other employee entitlements. This includes requests for flexible work arrangements and requests for extended parental leave. Seeking advice early from an experienced human resources specialist can help avoid a costly, time consuming and embarrassing legal dispute.

iHR’s Employer Advisory Service can provide up-to-date advice on high risk HR issues including unfair dismissal, discrimination, and harassment claims to franchise operations and multi-site operations. They can also provide specific advice on employee entitlement when it comes to employee benefits such as parental leave. iHR can also help you develop policies and procedures that are specific to your organisation. Contact IHR today to find out how the Employer Advisory Service can help you avoid a costly and time consuming workplace dispute.