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The road to Hell …

September 08, 2017

By Alex Millman and Troy Wild, NRA Legal

… is paved with good intentions.

An employer who moved forward the date of an employee’s redundancy so that she would be aware of it before she returned from maternity leave has been found to have breached the Fair Work Act (FW Act).

Power v BOC Ltd & Ors [2017] FCCA 1868

The background

The Applicant, Ms Caroline Power, began working for BOC Ltd (BOC) in March 2013. In March 2015, Ms Power discovered she was pregnant, and took all the appropriate steps to take parental leave under s 70 of the FW Act.

Ms Power discussed the matter of parental leave extensively with her immediate supervisor, Mr Andrew Finnie, who was also named as a Respondent in the proceedings. She advised him in August 2015 that she hoped to work through the full term of her pregnancy, however subsequently discovered health complications which made her pregnancy a ‘high risk’.

Eventually, Ms Power’s application to take parental leave commencing on 6 November 2015 was approved.

During this period, BOC was undergoing an operational restructure which it dubbed ‘Project Lighthouse’. As a result of this restructure the General Manager, Mr Tony Newnham, reviewed the customer base of BOC in the Mt Isa region, where Ms Power worked, and identified it as the smallest in Australia.

From late September 2015 and into October 2015 Mr Finnie was involved in a ‘whole of Department’ review in which Ms Power’s role was identified as subject to redundancy. Mr Finnie signed a confidentiality agreement by which he was prevented from disclosing these discussions to Ms Power.

Throughout discussions for her parental leave, Ms Power had expressed concern about ensuring that her work was continued properly. In the last week of October 2015 Mr Finnie arranged for Ms Power to hand over her accounts to her counterpart in Townsville for the duration of her parental leave.

Two days before she was due to commence her parental leave, on 4 November 2015, Ms Power’s employment was terminated by way of redundancy.

The application

Ms Power applied for a remedy under the general protections provisions of the FW Act, claiming that there was no business case for redundancy and instead her termination occurred because:

  • she was about to take parental leave; and
  • she was discriminated against on the basis of:
    • gender;
    • pregnancy; and
    • future family responsibilities.

The Judge’s reasoning

Judge Vasta of the Federal Circuit Court in Brisbane determined that, looking at the business on a national level, there was in fact a business case for Ms Power’s redundancy.

Judge Vasta also determined that the selection of Ms Power for redundancy was not for any prohibited reason.

However, BOC had determined that there were to be eight redundancies nation-wide, one of which being Ms Power, and these were all to occur on 12 November 2015.

Bringing forward the date of the redundancy, solely for Ms Power, amounted to adverse action in the view of His Honour, being an “alteration of her position to her prejudice”.

The question for Judge Vasta was therefore:

Why was Ms Power made redundant a week before everyone else?

The reason, as stated by Mr Newnham, was that he was aware of Ms Power’s pregnancy and did not want to cause any more stress than was necessary. Rather than discriminating negatively against Ms Power, the decision was made with a view to her best interests.

As such, His Honour found that there had not been any discrimination under the FW Act. 

However, the date of her redundancy had been brought forward (the ‘adverse action’) because of her pregnancy and incipient parental leave (a ‘prohibited reason’), therefore BOC breached section 340 of the FW Act.

The consequences

His Honour adjourned the matter so that the parties could make submissions on the appropriate remedy.

In any situation other than parental leave, Ms Power would likely only receive as compensation the amount she would have been paid between 5 and 12 November 2015. However, because she would have been on parental leave on 12 November, and therefore subject to the statutory ‘Return to work guarantee’ in the FW Act, the loss of Ms Power’s entitlement to the return to work guarantee, and its associated job security, may significantly increase the compensation payable.

Separately, Judge Vasta will need to consider whether to level a fine against BOC, and if so in what amount. Fines at present are up to $63,000 per contravention for a corporation.

The lessons

When dealing with redundancies and various forms of leave, such as sick leave and parental leave, you should always seek advice. Critically, in their haste BOC didn’t consult with their HR team.

It is important to remember that the law does not care if a decision is made with the best of intentions.

If that decision is made for an unlawful reason, it is still unlawful.

As they say, the road to Hell is paved with good intentions.

If you have any questions about this article, call the NRA today on 1800 RETAIL (1800 738 245).

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