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Pregnant employee prejudiced by accelerated redundancy

Submitted on Thursday, 26th October 2017

The Federal Circuit Court of Australia has awarded nearly $58,000 in the form of compensation and a pecuniary penalty to an ex-employee after her redundancy date was brought forward 8 days due to her pregnancy and impending parental leave.  

Judge Vasey found the employee was not made redundant for a prohibited reason.  However, importantly found the date of the redundancy was brought forward because of a prohibited reason contrary to the Fair Work Act 2009 (Cwth) (“Act”).

As part of an ongoing project an email was sent to employees in early September 2015 reminding them of the “sustained and multi-year initiative” business restructure. In mid-October 2015, a decision was made there would be eight redundancies from the key accounts area.  One of those redundancies was the ex-employee concerned. The decision to make the ex-employee’s role redundant was borne out of a decision to reduce the two positions held by the ex-employee, based in Mount Isa, and her counterpart in Townsville, into one position.

The employer submitted the decision as to who should occupy the position was resolved having considered the majority of the work and customers were based in Townsville and the employee based in Townsville had been an employee for nearly 15 years whereas the ex-employee had been employed for under 3 years.

Judge Vasey considered the employer’s decision stating, “there is nothing before me that would, in any way, put any doubt into the genuineness of such a decision”. Judge Vasey also considered the ex-employee’s pregnancy did not contribute to the reason as to why she was chosen for redundancy as opposed to the Townsville based colleague.

Whilst Judge Vasey was satisfied the redundancy did not amount to discrimination and was not a result of the employee exercising her workplace right to take parental leave there remained an issue with the timing of the decision.

All 8 redundancies were to occur on 12 November 2015.  If the ex-employee concerned was made redundant on 12 November 2015, she would have started her parental leave.  The employer considered it was not in her best interests to be brought back from parental leave to be told her position had been made redundant.  In light of this the employer decision to bring the date forward and made the ex-employee’s position redundant on 4 November 2017, being before she was due to commence parental leave.

Judge Vasey accepted the decision maker was “blissfully unaware” of the return to work guarantee contained within the Act.  Judge Vasey noted, had the redundancy taken effect on the same date as the other employees, the ex-employee would have been entitled to paid parental leave in line with the internal policy and at the end of her unpaid parental leave if her position no longer existed, would have had the safety net of the return to work guarantee namely “an available position for which the employee is qualified and suited nearest in status and pay to the pre-parental leave position.”

Judge Vasey considered the decision was a “clumsy attempt” at trying to balance the perceived needs of the business and the ex-employee. Judge Vasey held the decision to bring forward the date of redundancy amounted to adverse action.  The consequence being the employer “altering the position of the Applicant to the Applicant’s prejudice”.

When deciding the appropriate sum of compensation Judge Vasey considered the business “deprived [the ex-employee] of her security”, stating “these things simply should not have happened.  The hurt, suffering and humiliation endured by the [the ex-employee] was avoidable if the [the employer] had simply complied with their obligations under the FW Act.” Judge Vasey awarded approximately $38,000 as compensation and $20,000 as a pecuniary penalty to be paid to the ex-employee.  

This case demonstrates even in situations where management feels they are acting in an employee’s best interest, employers should firstly consult with employment relations professionals to ensure they are not acting unlawfully. If you are ever unsure of potential risk, contact our Workplace Relations Advice line on 03 8662 5222. Alternatively attend our Managing Termination, Redundancy and Unfair Dismissals to learn more about managing restructure and redeployment situations.  

By Phillipa Preston

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