The Federal Circuit Court has found that making an employee redundant during a period of maternity leave, and following a request for a flexible working arrangement, was adverse action.

In the penalty decision of Heraud v Roy Morgan Research ltd (No 2) [2016] FCCA 1797, the Federal Circuit Court has ordered Roy Morgan Research Ltd to pay $52,000 in compensation to a former employee, Ms Heraud, for exercising her workplace rights.

What is the case about?

Ms Heraud was the National Operations Director for Roy Morgan. Ms Heraud commenced maternity leave in September 2013 and was due to return to her role in July 2014. While she was on maternity leave, Roy Morgan restructured the company following a downturn in revenue. In response to this downturn, Roy Morgan allegedly made Ms Heraud's role redundant and offered Ms Heraud a redeployment opportunity to work in its Research Centre.

Ms Heraud subsequently made a request regarding flexible working arrangements. Following this request, Roy Morgan retracted its offer and informed Ms Heraud that her flexible working request was not approved. Ms Heraud's employment was subsequently terminated on the basis of redundancy.

Ms Heraud filed an adverse action application against Roy Morgan on the basis that she was made redundant because she exercised a workplace right, including the right to take maternity leave.

What did the court find?

Under section 340 of the Fair Work Act 2009 (Cth), an employer must not take adverse action against an employee because they have exercised a workplace right.

In this matter Judge Jones found that Roy Morgan had contravened section 340 of the Fair Work Act on three separate grounds:

  • Roy Morgan had taken adverse action against Ms Heraud by not allowing her to return to her pre-parental leave position because she had exercised her right to take maternity leave;
  • Roy Morgan failed to redeploy Ms Heraud to a position in the Research Centre, after creating an expectation that she would, because of her request for flexible working arrangements; and
  • Ms Heraud was made redundant because she exercised her workplace right to request flexible working arrangements.

What penalties were ordered?

Roy Morgan was ordered to pay Ms Heraud $52,000 in compensation for its serious contraventions of the Fair Work Act. The Court took into consideration the employee's economic loss suffered as a result of the adverse action and non-economic loss, including loss of enjoyment, distress and embarrassment. Judge Jones found that the employee was in a vulnerable position following maternity leave and that the contraventions by the employer were of a serious nature.

What does this mean for employers?

Employers should have strategies to effectively manage the redundancy process to ensure compliance with workplace laws and minimise a company's exposure to claims such as this one.