Ending employment during parental leave

The decision to make an employee redundant can be a stressful one, and it can be made even more complex if this decision is made while an employee is on parental leave.

Aside from the considerable financial consequences that can arise because of redundancy and the heightened risks of doing so while an employee is exercising a workplace right, there are also emotional and ethical factors that need to be considered when it involves soon-to-be parents.

Redundancy may be necessary to ensure the survival of a business, but employers must make sure it’s genuine, appropriate, and reasonable steps have been taken to affect it.

What is genuine redundancy?

Under the unfair dismissal provisions of the Fair Work Act 2009 (Cth), redundancy will only be considered genuine if the following can be satisfied:

1. There is no longer an operational requirement for the person’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise.
2. The employer has complied with any obligation in an applicable modern award or enterprise agreement to engage in a consultation with the employee about the proposed redundancy.
3. Reasonable redeployment opportunities have been explored.

Does parental leave change the process?

Implementing a redundancy while the affected employee is taking parental leave may, at first glance, seem unfair. However, it remains a valid decision if it’s made based on an operational requirement that the role is no longer necessary in the company.

Remember that redundancy is about the role, not the person in the role.

The overlap between an employee’s parental leave and the decision to restructure the business through redundancy means the employer needs to take extra care to avoid claims that the redundancy is the result of extraneous factors, such as that the decision is because the employee is on parental leave, pregnant, or temporarily absent from work.

Making an employee redundant based on any of these factors could lead to discrimination, unfair dismissal, or a breach of general protections.

Therefore, it’s highly recommended that employers take extra care in these circumstances.

What consultation should be provided?

It’s best practice for the consultation process to be undertaken whether it’s required or not during the redundancy process. It’ll be a similar process as any other redundancy, and it should be conducted whilst the employee is still on parental leave. Delaying the consultation process until the employee’s return to work could undermine both the decision itself and the fairness of the employer’s process.

It may be appropriate to offer an employee on parental leave additional flexibility when engaging in the consultation process, such as their choice of meeting times, the ability to meet by video or phone call instead of face-to-face and agreeing to breaks where the employee needs to attend to childcare duties. This is important because the employee isn’t working at the time of the consultation, and the greater flexibility and support may reduce the risk of the employee claiming that the redundancy decision was unfair.

Consulting should involve consideration of any reasonable opportunities to redeploy the employee in another role in the employer’s business or an associated entity, which will usually take effect at the end of their parental leave. Assessing redeployment opportunities is a key step in reducing claims of unfair dismissal, discrimination, or a breach of contract and can also assist in retaining key talent in your business.

How can Citation HR help?

It’s crucial businesses proceed with caution when proposing redundancies. Redundancy can be tricky, but if you follow a fair and compliant process, there is no need to fear an employee making an unfair dismissal risk on the basis of the redundancy not being genuine. This is where Citation HR’s industry-leading HR Software and workplace relations specialists can guide you through the complexities of redundancies, helping ensure that you meet all provisions for redundancy and the requirements for consultation outlined in relevant modern awards or enterprise agreements.