If an employee is pregnant or on parental leave, can they still be made redundant?
Recently, the Federal Circuit Court found energy company, BOC, had unlawfully terminated the employment of a pregnant employee when they made her position redundant, two days before she was due to start parental leave.
Caroline Power was to start parental leave on 6 November, 2015, but was made redundant on 4 November, 2015. Ms Power wasn’t the only BOC employee to be made redundant but all other affected employees were made redundant on 12 November, 2015.
Although Ms Power’s redundancy was a genuine redundancy, the fact that her termination date was brought forward from 12 November (when she would have been on parental leave) to 4 November, meant that the decision to make her position redundant on the earlier date, was due to the fact that she was pregnant and about to commence parental leave, and was therefore tainted as “adverse action” as it was partly based on illegitimate grounds.
Decisions that adversely affect an employee, which are, at least in part, taken because of prohibited reasons such as being pregnant or taking approved leave, are unlawful under the general protections provisions in the Fair Work Act. BOC was unable to prove that its decision to make Ms Power’s position redundant when it did had nothing to do with the fact that she was pregnant or about to commence parental leave. Her redundancy was plainly brought forward for those very reasons and, as such, Ms Power’s adverse action claim therefore succeeded. The matter has been adjourned until 18 September 2017 for an assessment of damages.
Does this case mean that employers are unable to make an employee redundant, if they are pregnant or on parental leave? No, but it does increase the risk of the employee claiming that the redundancy or termination was influenced by the fact that they were pregnant or on parental leave.
As an employer, the general process that should be followed (and depending on the facts of the case, a different approach may be required) when considering the redundancy of a pregnant employee or employee on parental leave, is:
- Ensure that the position is no longer needed to be performed by any one person due to changing operational needs of the company or a restructure (and not because of a reason related to the fact that the employee is pregnant or on parental leave);
- Ensure that any alternative roles and redeployment opportunities have been considered;
- Ensure that there are cogent business reasons to justify the redundancy, and to show that the pregnancy or leave is irrelevant to that decision (eg by reference to other redundancies at the same time or other provable reasons);
- Communicate with the employee about the restructure and the reasons for it, and the their entitlements on redundancy, and give them an opportunity to provide feedback to you about the changes;
- Consider, in good faith, any feedback provided to you by the employee; and,
- Confirm your decision in writing (assuming there is no change to the decision).
The presence of “adverse action” risk factors such as pregnancy or parental leave mean extra care should be taken to ensure that it is clear that the decision to make the position redundant had nothing to do with those matters, and was due solely to the changing operational needs of the company as they affected the redundant position.
If you need assistance with managing a redundancy, contact our Employment Law Team: