A recent Federal Circuit Court decision (Turnbull v Symantec (Australia) Pty Ltd [2013] FCCA 1771 (1 November 2013)) highlights the risks for an employer who elects to make a parental leave employee redundant rather than return them to work.

The Symantec decision concerned a financial controller who was retrenched upon her return from 8 months' parental leave.  The employee alleged that her dismissal contravened s 84 of the Fair Work Act 2009 (Cth).

Section 84 requires that on ending unpaid parental leave, an employee is entitled to return to:

(a)  the employee's pre-parental leave position; or

(b)  if that position no longer exists--an available position for which the employee is qualified and suited nearest in status and pay to the pre-parental leave position.

Contravention of this provision exposes the employer to liability for contravention of a civil remedy position, as well as orders for compensation.

In the Symantec case, the pre-parental leave position was made redundant.  However the redundant employee alleged that her employer failed to return the employee occupying that position to an "available position" that she was qualified and suited to fill.

In the decision, the Court made the following useful observations about the operation of s 84:

  • Where, upon cessation of unpaid parental leave, an employee's pre-parental leave position no longer exists, but there is an "available position for which the employee is qualified and suited nearest in status and pay to the pre-parental position", s 84 obliges the employer to inform the employee of the existence of that position.  Whether or not there is an "available position" is something that would be peculiarly within the knowledge of the employer, not the employee.
  • An available position might be one that is available overseas, or is available in a legal entity separate from the employer, if it is within the power of the employer to make that position available.
  • The employer must then determine whether there are available positions comparable in status and pay with the pre-parental leave position and, if there are two or more such positions, the employer must make available to the employee the available position which is nearest in pay and status to the pre-parental leave position. If there is no available position comparable in pay or status with the pre-parental leave position, the employer will have no obligation under s 84 to make any position available to the employee.
  • The test for determining whether an available position is one for which the employee was qualified and suited, and which was nearest in status and pay to the position she occupied immediately before she went on parental leave is to ask whether a person, having the qualifications and experience of the employee in question, would seriously consider taking that position.
  • For the purpose of answering that question, it would be relevant to receive direct evidence from the employee in question about whether the employee would have accepted the position if it were offered to the employee. Such evidence, however, would not be conclusive. Objective evidence such as the comparative tasks, pay, and status of the pre-parental leave position and the available position would also be relevant and stand as a measure against which to assess any direct evidence the employee may give.

In the Symantec case, the Court ruled that the position claimed to be available by the employee was "available" for the purposes of s 84.  However, because the employee did not give any evidence about whether she would have accepted the position had it been offered to her and offered no explanation why she led no such evidence, the Court ruled that the position was not one which was nearest in status and pay to the position the employee occupied immediately before she went on parental leave.  This was supported by the fact that the position attracted less pay and less responsibility than the pre-parental leave role.

Lesson for employers

If you are seeking to declare a position redundant and the employee in that position is on parental leave, you should undertake the followings steps:

1                 Identify what, if any, positions are vacant for which the employee may be qualified and suited.  These may exist in related businesses, including at locations interstate or overseas, provided it is within your power to offer employment in them.

2                 Give the employee details of these roles and meet with them to understand their views about being employed in those roles.  Explain that this is so that you can make a final decision as to whether the employee is qualified and/or suited for the roles.

3                 If the employee is not interested in the roles, then you have met your obligation under s 84 and you can proceed to retrench the employee.

4                 Even if the employee expresses interest in the roles, it is open to you (after you have undertaken steps one and two) to indicate that you do not believe that the employee is qualified and/or suited for the vacant positions, resulting in retrenchment.

5                 You should keep accurate records of these discussions.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.