A recent decision by the Federal Circuit Court acts as a reminder for employers to think twice about timing when implementing redundancies.
In this case, the employee had been working for BOC Pty Ltd for almost 2 years when she became pregnant. Upon agreement with her general manager, the employee was scheduled to commence her maternity leave on the 6th of November 2015. The company subsequently decided that she would be one of 8 employees nationally that would be made redundant as part of a business restructure.
All redundancies were scheduled to occur on 12th November, however the employee’s termination date was brought forward to 6 November, two days before she was due to start her leave. The company alleged that this decision was made with her best interests in mind so that she would not be required to come back to work to be informed of the changes whilst she was on leave.
The employee claimed that she was discriminated against by being chosen because she was pregnant. She also claimed that the company took adverse action against her on the basis of her exercising her workplace right to take maternity leave. She claimed that, had the redundancies been carried out on the on 12th November, she would have been entitled to the ‘Return to Work Guarantee’ under the Fair Work Act and the company’s generous paid parental leave scheme, which included 21 weeks’ paid leave plus superannuation.
The court did not accept that the company engaged in discrimination and accepted evidence that her manger was supportive of her pregnancy and even helped her structure her leave. It was found that, whilst there was a genuine business case for her redundancy, the poor timing of the termination led to a finding of adverse action. Additionally the court commented that, whilst her manager was “doing his best to ensure the employee was treated well”, it would have been wise to consult the HR department before acting with such “haste”.
As this case reveals, it is not unlawful to make an employee redundant whilst on maternity leave, however the timing of the decision is crucial. Employers need to ensure that redundancies are handled in accordance with the obligations under the Fair Work Act and that all employees are treated fairly and equally.
Lessons for Employers
- Employers must be mindful of timing of redundancies and ensure that due process is followed.
- When advising employees of a potential redundancy, ensure the reasons for the redundancy are clear, consistent and relate to the role and not the person.
- Where appropriate, consider your obligations under relevant Award provisions and workplace policies.
- It is advised that employers consult with HR expertise during the redundancy process or otherwise seek legal advice to ensure the process is handled properly.
In a recent case before the Federal Circuit Court, it was found that an employer engaged in adverse action by bringing forward an employee’s redundancy two days before she was due to commence her maternity leave.
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 Power v BOC Ltd & Ors  FCCA 1868 (9 August 2017).