In the case of Power v BOC Ltd & Ors  FCCA 1868, Judge Vasta of the Federal Circuit Court of Australia ruled that a general manager took unlawful adverse action against a pregnant employee in circumstances where that employee’s redundancy was brought forward by a period of eight days.
In this case, the applicant employee informed her employer that she was pregnant and was scheduled to commence parental leave on 6 November 2017.
The company made the decision to make the employee redundant along with seven other employees from the customer accounts area.
However, the general manager had brought forward the redundancy date for the applicant employee from 12 November 2015 to 4 November 2015. This decision was made as the general manager thought it was best for the employee to be made aware of her redundancy before commencing her parental leave.
The applicant employee claimed that her employment had been terminated in breach of section 351 for discrimination on the basis of her being a woman and due to her pregnancy.
The applicant employee also pursued an action under section 340, claiming that she had been subject to adverse action on the basis of her exercising a workplace right, that being her right to parental leave.
The respondent employer submitted that the employee’s termination was as a result of genuine redundancy and the decision was made purely due to the needs of the company.
Judge Vesta determined that there could be no finding of discrimination in the circumstances as the general manager was supportive of the employee’s pregnancy and even assisted her in planning her parental leave.
However, it was held that the general manager had taken adverse action against the employee as a result of that employee exercising her workplace right to parental leave.
Interestingly, Judge Vasta accepted that the company had a genuine business need for restructuring which resulted in the decision for the employee’s redundancy. Judge Vastra also considered the redundancy had been made after a review of the company as a whole. Notwithstanding that, it was ultimately concluded that the general manager had brought forward the redundancy date for a prohibited reason, that being due to the employee commencing parental leave on a particular date.
Judge Vasta held that the redundancy of the employee should have occurred on 12 November 2015, as it had originally been intended.
This was the case even though Judge Vasta accepted that the general manager believed he was acting in the best interests of the employee by informing her of her redundancy prior to the employee going on maternity leave. In considering the intentions of the general manager, Judge Vasta accepted that “he was doing his best (as incompetent as it may seem in hindsight) to ensure that the [employee] was treated well.” Judge Vasta pointed out that such a workplace breach may not have occurred if the general manager had consulted with his in-house human resources experts. It was provided that:
“Because of the ‘indecent haste’ with which this redundancy occurred, the policy of [the employer] was not observed” and “One suspects that if the [general manager] had engaged the HR Department, the redundancy could not physically have taken place by 4 November 2015.”
A decision as to the appropriate penalty has not yet been made, and the case has been adjourned to allow the parties opportunity to make submissions as to the damage suffered.
What this means for your business
There are a few key take away messages from this case.
While an employer may have its employee’s best interests at heart and genuinely believe that the right thing is being done by the employee, all decisions in respect to redundancy must be made carefully to ensure compliance with the Fair Work Act.
Where an employee has been made redundant and that employee makes an adverse action claim, the employer bears the burden of proving that it did not take adverse action for a prohibited reason.
For this reason, in case it is necessary to satisfy a court that the decision to make a certain employee redundant was a proper business decision, employers should:
- be mindful that all policies are followed
- consult with the human resource team before any decision is made regarding redundancy
- ensure that appropriate documentation and file notes are kept.