Parental leave redundancy not discriminatory

Justice White of the Federal Court has held that an employer who had made an employee redundant whilst on parental leave had not discriminated against the employee.

The employee was employed in the position of Marketing Manager. Whilst the employee was on parental leave, the employer proceeded to make the position redundant.

In considering whether the employer had discriminated against the employee, Justice White held that the Marketing Manager’s absence from the workplace enabled the business to realise that the role was not actually required, stating:

“the applicant’s pregnancy, maternity leave and family responsibilities did not, in a relevant sense, play any part in the decision. I have said “in a relevant sense” because I do consider that it was the applicant’s absence on maternity leave which allowed the alternative arrangements to be tested and to be found satisfactory. It can be said, therefore, that that absence created the circumstance in which [the employer] concluded that it did not need the applicant’s services. However, for the reasons which follow, this does not amount to discrimination for a proscribed reason. “

Justice White determined that the restructure undertaken by the employer was entirely unrelated to the Marketing Manager’s pregnancy or family responsibilities and that a change in the marketing department’s focus led to “a reduced need for the Applicant’s skills.” The employer subsequently decided that it could manage without the Marketing Manager role.

Implications for Employers

This case is not to be taken as a license for employers to take adverse steps against employees who are commencing or have commenced parental leave. There is significant risk in taking such steps.  However, where an employer can show there is a strong business case to support a decision to make a position redundant, then it may be possible to proceed with a retrenchment.  Proper consultation is essential and legal advice is strongly recommended.