The Federal Circuit Court has found an employer was “blissfully unaware” of obligations under the Fair Work Act when an employee was made redundant two days before her maternity leave was scheduled to commence in November 2015.
The employee brought an adverse action claim against BOC Ltd, a gas and chemical supplier owned by the Linde Group, after she was one of eight staff members made redundant by the company just under two years ago.
The court heard the employee worked for BOC from 2013 until her redundancy on November 4, 2015. The worker discovered she was pregnant in March 2015 and after negotiations with supervisors, it was decided her last day of work before maternity leave would be November 6.
The company’s paid parental leave scheme would have resulted in the worker receiving 21 weeks’ paid leave plus superannuation, a policy Judge Salvatore Vasta said was obviously a “very generous scheme”.
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In 2015, the business decided it would make eight redundancies across its operations, including the then pregnant applicant in this case. The court heard a decision was made the redundancies would take place on November 12.
However, the pregnant worker was notified of her redundancy on November 4, two days before her parental leave was to take effect.
The court heard that the two senior staff members responsible for communicating the redundancies said using the November 12 date for all workers would have meant the pregnant employee would have to come back to work after her maternity leave before she could be legally notified of the redundancy.
“Neither of them felt that this was in the best interests of the [employee] and that it would be better for this to occur before the [employee] went on maternity leave,” Judge Vasta explains in the decision.
However, the Judge said the company’s management was “blissfully unaware” that doing this would breach the obligations under the Fair Work Act to deliver on the worker’s maternity leave entitlements.
The employer said while it didn’t intend to discriminate against the worker, the company confirmed it had the her pregnancy in mind when making the decision.
Judge Vasta found one of the senior staff members was “doing his best (as incompetent as it may seem in hindsight) to ensure that the [employee] was treated well”.
However, while the redundancy was found to be a genuine one, the Federal Circuit Court found that the notification date for this particular worker was brought forward because of “a prohibited reason”.
“There are a number of other consequences for the [employee] because of the date of her redundancy was brought forward. This meant that the [employee] has not had the benefit of the safeguards of the redundancy policy of the … company,” Judge Vasta found.
The matter has been adjourned ahead of a hearing about the amount of damages to be paid to the employee.
SmartCompany contacted BOC Ltd but the company declined to comment as the matter is still before the court. SmartCompany was unable to contact the employee prior to publication.
Always consider reasons before delivering redundancy news
Bianca Mazzarella, a senior associate at law firm McDonald Murholme, says this case suggests it is possible to make a pregnant employee redundant if the redundancy is genuine, but the process cannot infringe on their right to access entitlements.
“In this case notifying the employee of her redundancy earlier than the other redundant employees because of her upcoming maternity leave is adverse action,” Mazzarella says.
“The adverse action resulted in her not being able to access maternity leave entitlements”.
“The message is pregnant employees can be made redundant if genuine, but adverse action cannot be taken against them because of that upcoming leave or request to take leave. In this case it is in the timing.”
If a small business owner needs to make a redundancy decision, before notifying employees, they should always ask why they have chosen a specific date to do so.
“The most important thing is to not take adverse action because of an employee’s exercise of workplace rights,” Mazzarella says.
While planning the terms of parental leave can start as a verbal conversation, Mazzarella advises employers to have as much in writing as possible so both parties understand the dates and terms of the employee returning to work.
“My preference is to have all terms pertaining to maternity leave and return to work in writing if possible to avoid any confusion,” she says.
*This article was updated at 9.30am on Thursday, September 7.