Employers often have the misconception that employees who are pregnant or on parental leave cannot be lawfully dismissed or otherwise have their employment adversely affected.

Legitimate business decisions

Pregnant employees and employees with family responsibilities have the benefit of protections under State and Federal anti-discrimination laws and Federal workplace legislation.

However, these protections do not prevent employers from making legitimate business decisions that may have adverse consequences for that employee in their employment.

Recent Federal Court decisions

This principle was highlighted in two recent decisions of the Federal Court of Australia (see Poppy v Service to Youth Council Incorporated [2014] FCA 656 and Stanley v Service to Youth Council Incorporated [2014] FCA 643).

In each of the cases, the women alleged that they had been discriminated against on the basis of their pregnancy and family responsibilities. Both women claimed to have been “targeted” after announcing their pregnancy to the CEO and to have had their employment terminated on the grounds of redundancy while they were on parental leave, in contravention of the Sex Discrimination Act 1984 (Cth).

Typically, when an employee’s position is made redundant while he or she is on parental leave, the decision is part of a wider organisational restructure and the employee in question was not targeted in that restructure. In these circumstances, the employee has not been unlawfully discriminated against (so long as the employee has been consulted about the major workplace change in the same way that other employees were).

However, in Stanley and Poppy, the restructure which led to the positions being redundant only occurred because the respective employee was taking extended leave and the tasks performed by the employee needed to be distributed amongst others.

In both cases, Justice White was satisfied that the decisions to make the positions redundant came about due to the relevant employee’s absence from work, as it enabled the organisation to find alternative arrangements which were tested and found to be satisfactory. However, Justice White found that the decisions were not made because of the employees’ pregnancies, the taking of parental leave, or due to family responsibilities. The outcome would have been the same if the employee (a comparator) was male and took an extended leave of absence for non-family related reasons.

Lessons for employers

These recent decisions reiterate that employers are able to make legitimate business decisions which (lawfully) adversely affect pregnant employees or employees on parental leave. However, employers should keep in mind that:

• The decision (which adversely effects the employee) in part or in full must not be based on the fact that the employee is of a particular gender, is pregnant, or is on parental leave; and
• Employees on leave (including parental leave) are required to be consulted about major workplace changes if there is an obligation on the employer to consult under an Award, enterprise agreement, workplace policy or employment agreement.