When redundancies crash a new parent's 'guarantee' of returning to their job

Employers with staff on parental leave must tread carefully when restructuring their business.

The return-to-work guarantee

The unpaid parental leave scheme under the Fair Work Act allows employees, by reason of them welcoming a child into the world, to take up to 12 months' unpaid leave from their job.

Such an extended absence exposes those employees to the possibility that structural changes in their workplace in the meantime may affect their ability to return to the same position they worked in immediately before taking leave.

To counter this concern, the scheme in the act has a built-in "return-to-work guarantee" (section 84). It works like this. An employee on unpaid parental leave is entitled to return to their pre-leave position. However, if, by the time they are ready to return, that position no longer exists, the employee is entitled to return to an available position (a) for which they are qualified and suited, and (b) which is nearest in status and pay to their previous position.

Careful attention must be paid to the word "available" where an employer decides, during the parental leave, that the employee's pre-parental leave job is redundant.

If, while an employee is on unpaid parental leave, the employer makes a definite decision that will significantly affect the status, pay or location of the employee's position, section 83 requires the employer to take "all reasonable steps" to consult the employee about that decision. The Federal Court's Justice Richard White pointed out in Stanley v Service to Youth Council Incorporated that this obligation is not discharged until all consultative action that could reasonably be expected to have taken place, has taken place.


If that "definite decision" is that the employee's position is genuinely redundant – i.e. the operational requirements of the enterprise change in a way that the employer no longer requires the employee's job to be performed by anyone – while the employee is on unpaid parental leave, section 84 requires the employer to redeploy the employee in any other available position for which the employee is qualified and suited.

However, section 84's wording implies that the guarantee only applies insofar as other positions for which the employee is qualified and suited are, in fact, available. That is, if, after the employee's pre-leave job has become redundant, there are simply no such positions available, the employee no longer has recourse to the "guarantee" and the employer can terminate the employee's employment on the ground of redundancy.

That proposition must be qualified by two statements. First, if the employer is a large enterprise (like the Australian Public Service), it is far likelier that such a position will be available. Second, it is still open to the employee to make a claim of adverse action under the act's general protections provisions, alleging the employer took "adverse action" against them (dismissing them) because they had a "workplace right" (the return-to-work guarantee).

The above qualifications were illustrated in Judge Suzanne Jones' recent Federal Circuit Court decision in Heraud v Roy Morgan Research Ltd. In that case, Jaye Heraud was made redundant by a large market research company, Roy Morgan, during her maternity leave.

Heraud began her leave in September 2013 for about 39 weeks. From late 2013 to 2014, Roy Morgan restructured its business. In May 2014, about two months before Heraud was due to return to work, she submitted a request for flexible-working arrangements under section 65 of the act. Roy Morgan refused to consider the request, saying that, due to the ongoing restructure, "we do know which role you may, or may not, be undertaking".

Ultimately, Roy Morgan decided to make Heraud's position redundant on a date one month after she was due to return to work. To avoid a situation where she would return for only a month before being made redundant, Roy Morgan decided, instead, to keep on the employee who was acting in her position and move Heraud's redundancy forward by a month.

Roy Morgan then informed Heraud that her job would become redundant and her employment terminated on that ground several days before she was due to return to work.

Heraud claimed, among other things, that her dismissal contravened the act's general protections provisions, in that her dismissal constituted "adverse action" taken against her because she had exercised her "workplace right" to take maternity leave and request flexible-working arrangements.

Roy Morgan contended that Heraud's taking maternity leave was not a "substantial and operative reason" for her dismissal, and so it did not fall within the scope of the general protections provisions. Rather, it argued that the dismissal came simply as a result of a commercially necessitated restructuring of its business.

Roy Morgan did not call evidence from the decision-maker or the person who recommended the action, so the judge found Roy Morgan had not rebutted the presumption that it did not return Heraud to her previous job because she had taken maternity leave and requested flexible-working arrangements. Her request for these arrangements was also found to be the reason for bringing her redundancy forward (which itself constituted an adverse action).

Lessons for public service managers

The Roy Morgan case provides some important lessons for public sector managers who seek to balance the employee's right to take parental leave with the legitimate interests of an enterprise undergoing a restructure.

First, if an employee who is returning from parental leave asks for flexible-working arrangements, the request must be considered in accordance with section 65. That is, it must be responded to within 21 days and may only be refused on reasonable grounds.

Second, to establish that an employee's dismissal is a case of genuine redundancy, the decision-making process must be documented clearly to show that the substantial and operative reasons for the redundancy did not include their taking parental leave (nor making a request for flexible-working arrangements upon returning from parental leave).

Third, even if the employee's position would be made redundant shortly after they returned to work, they should still be allowed to return to their position for that intervening period, because bringing the redundancy date forward may itself constitute adverse action.

In short, ensuring that the proper processes are followed closely during "sensitive" redundancies can save an employer substantial time, money and any number of headaches.

John Wilson is the managing legal director at Bradley Allen Love Lawyers and an accredited specialist in industrial relations and employment law.