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Can you lawfully make a pregnant employee's position redundant?

NewsFlash 28 November 2017

Making an employee redundant is never an easy decision for a business and when that employee is pregnant the decision can create a significant risk to the business if a proper process is not followed. This is evident in the recent decision of the Federal Circuit Court in Power v BOC Ltd.

Fact Summary

In this case, the Court found that BOC Ltd took adverse action against a pregnant employee, Ms Power when it brought her redundancy forward so that it took place 2 days before she was due to commence parental leave. The Court found that the redundancy itself was not adverse action, however the fact the redundancy was brought forward because Ms Power was about to commence parental leave, was considered to be in breach of the general protections provisions of the Fair Work Act 2009.

BOC Ltd supplies compressed and bulk gases, chemicals and equipment. Due to a genuine business restructure in 2015, BOC Ltd decided to make 8 employees redundant. Ms Power was one of these employees. BOC Ltd decided to make all employees, excluding Ms Power, redundant on 12 November 2015. Ms Power, who was due to commence parental leave on 6 November 2015, was made redundant on 4 November 2015.

On 4 November, BOC Ltd had a meeting with Ms Power, during which Ms Power was told that her position would be made redundant. BOC Ltd stated that it considered it was acting in Ms Power’s best interest in bringing the termination date forward so that she did not have to attend the workplace on 12 November when the other employees would be made redundant.

As a result of her position being made redundant prior to commencing her period of parental leave, Ms Power lost her right to parental leave, which included a period of paid leave provided by BOC Ltd and her guaranteed right to return to work.

The Decision

The Court did not dispute that there was a genuine business reason for the redundancy of Ms Power’s position. As this was a general protections claim, BOC Ltd had to convince the Court that they did not bring Ms Power’s redundancy forward to prevent her from taking parental leave and accessing the benefit of the company’s parental leave policy. The Court did not accept that BOC Ltd brought Ms Power’s redundancy forward for her benefit. As a result BOC Ltd was found to have contravened the general protections provisions of the Fair Work Act.

Of potential concern to any employer seeking to make an employee on parental leave redundant, the Court stated that had the redundancy taken place on 12 November, as was the case for the other employees, being after Ms Power commenced her period of parental leave, BOC Ltd would have been in breach of the return to work guarantee in the Fair Work Act. In relation to the guaranteed right to return to work after parental leave, BOC Ltd seemed genuinely unaware of this right.

Key Takeaways

  • It is not unlawful to make a pregnant employee’s position redundant provided there is a genuine business case for doing so and the decision has not been made because the employee is pregnant or to prevent the employee from exercising a workplace right.
  • Ensuring that a proper process is followed and timing of the decision are crucial factors to minimise the risk of a general protections claim.
  • Making an employee’s position redundant while on parental leave may be in breach of the return to work guarantee in the Fair Work Act.
  • If in doubt, seek legal advice to ensure that you have complied with any obligations under the Fair Work Act, any relevant Award, your internal policies and that a proper process is implemented to minimise risks to your business.
  • As they say - it's all about the timing!
     

For further information or advice regarding redundancies or other employment matters please contact our Employment team.

Peta Tumpey, Partner
Sydney

Keely Horan, Senior Associate
Sydney

Grace Gunn, Solicitor
Sydney

NewsFlash 28 November 2017
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