Employees returning from unpaid parental leave – How to mitigate discrimination and general protection claims

By Jenny Thomas 

Employee Relations Adviser

An employee’s entitlements to return to work after unpaid parental leave (UPPL) are often not given much thought until an employee is due to return. Being aware of your obligations as an employer is instrumental to making sure you are able mitigate potential discrimination and general protections claims.

Section 84 of the Fair Work Act 2009 (Cth) (FW Act) states that upon ending UPPL, an employee is entitled to return to their pre-parental leave position. It also states that, if an employee’s position no longer exists, they must be offered an available job they are qualified and suited for, which is of similar status and pay to the pre‑parental leave position. It is important to note that any reduction in hours or transfer to a ‘safe job’, to accommodate the employee’s pregnancy whilst working, does not constitute the employees pre-parental leave position. Putting it simply, an employee returning to work after a period of UPPL, is entitled to, and has a right to, the position they had before commencing UPPL.

So what happens if my employee wants to return to work on a different basis?

An employee’s return to work can become complicated when an employee requests to return on a modified basis, otherwise known as a flexible working arrangement (FWA). FWA’s can only be requested on specific grounds. An employee who has the caring responsibilities of a child (school age or younger), can for this reason request an FWA, as long as the employee has completed 12 months continuous service with the employer. The request must be in writing, clearly outline the changes sought and the reason for the changes. The FWA requested will differ from employee to employee, as it will depend on individual circumstances, however, a FWA could include changes such as:

  • changes to start and finish times;
  • patterns of work, such as working split shifts and job sharing;
  • or could include working from a different location, such as working from home.

Do I have to accept these new changes?

If your employee wants to change their working arrangements, they have a right to request changes, but they do not have a unilateral right to be granted any changes. Employers can refuse FWA requests if they have reasonable business grounds, as outlined in section 65(5A) of the FW Act. When determining if the FWA can be accommodated, employers need to consider:

  • the cost associated with accommodating the FWA request;
  • whether changing other employees’ arrangements or employment of a new employee would be practical in the circumstances; and
  • what effect the requested arrangements would be on productivity, efficiency and customer service.

Your employee can be directed to return to their pre-parental leave position if you refuse the FWA request on reasonable business grounds. A refusal must outline the reasons why the FWA cannot be accommodated, including the reasonable business grounds for which the employer made their decision. The refusal must be in writing and must be given to the employee no later than 21 days after receiving the request from the employee. Employers should also be aware of any additional requirements under a modern award, enterprise agreement, contract of employment, or policy that provides FWA entitlements more beneficial than the FW Act.  If you are unsure what award your employees are covered by, you can contact CCIWA’s Employee Relations Advice Centre on 9365 7660 or advice@cciwa.com

Case Example – Fair Work Ombudsman v A Dalley Holdings Pty Ltd

A Dalley Holdings Pty Ltd (A Dalley), operated an aged care facility in Geelong where an employee held a part time personal care assistant position. Prior to going on UPPL, the employee worked six afternoon shifts and one sleepover shift per fortnight. While the employee was on UPPL, a new roster was introduced reallocating the employee’s afternoon shifts to other workers, without the employee being consulted. Issues arose when the employee attempted to return to work, initially being told the facility had no hours to give her. After making complaints to the employer, the employee was subsequently offered two sleepover shifts per fortnight. When the employee brought up concerns about her inability to do these shifts, because of her family and carer responsibilities, the employer said that if she refused to accept the shifts, they would take her refusal as resignation. A Dalley found to have breached the FW Act on multiple grounds and was fined $27,720. Andrew Dalley, who manages and part-owns the centre, was personally fined a further $3,168. The company was also ordered to compensation the affected employee $5,000.

This case highlights that it is a serious breach of workplace laws to discriminate against employees on the grounds of pregnancy and family and caring responsibilities. The employer was found to have failed within its obligation to;

  • consult with the employee about changes to her pre-parental leave position;
  • not allow the employee to resume her previous position or another similar position, on return from parental leave; and
  • the employer took adverse action against the employee because they have accessed a workplace right to UPPL.

Practical tips

  • Employees returning from UPPL have a right to return to their pre-parental leave position or if no longer available, a similar position in status and pay.
  • FWA’s can be requested, but employees are not automatically entitled to change/s in their employment.
  • Employers should make sure all FWA requests are in writing, outline the changes sought and the reason for requesting the changes so it’s clear what the employer needs to consider when looking into whether accommodations can be made.
  • If the employees request cannot be accommodated, it’s recommended that you try negotiating with the employee to see if an alternative arrangement can be made before refusing the request to mitigate risks of discrimination or unlawful adverse action.
  • FWA requests can only be refused on reasonable business grounds.
  • Any acceptance or refusal of a FWA request, should be given in writing to the employee within 21 days from the receipt of the initial FWA request.

If you would like to know more  you can contact CCIWA’s Employee Relations Advice Centre on 9365 7660 or advice@cciwa.com

Fair Work Ombudsman v A Dalley Holdings Pty Ltd [2013] FCA 509

In the absence of an employer contract 

An often felt emotion for small business owners, particularly in real estate,  is a strong attachment to the operations of their business and the staff that they employ. 

This strong relationship can be conducive to success because both parties are motivated to succeed due to the close attachment to the business. 

When things are tough and the relationship sours though, that same emotion can cloud the judgement of small business employers and can result in decisions being made on an emotional basis rather than being made objectively with disastrous results. 

So what mistakes can be made? 

The first one is not having a contract of employment with your employee.  It seems obvious doesn’t it.  Of course you should have a contract of employment.  However, it is amazing how often this is not the case.  You know the drill.  You’ve found someone to help you in your business, you go for a coffee, get to know and like them and you start the employment relationship with a handshake.  No need to formalise the arrangement right? 

The problem arises when one party has an expectation of what was agreed to that the other party doesn’t.  When that expectation isn’t fulfilled, disappointment and anger can arise.  Now, we are off to the races as the relationship sours, disputes occur and that strong bond and attachment that I mention earlier starts to disappear. 

Always ensure that you reduce what you and your employee agree to writing.  Subject to any legislation, industrial awards or legally binding statutory enforceable agreements the parties to a contract are free to agree to any terms that they wish to impose upon themselves – subject to those terms not being unlawful.  To avoid doubt at a later stage, a written contract should be entered into. 

Another problem is that the Real Estate Award requires you to enter into a written arrangement with your staff.  By not having a contract of employment you are breaching the award. 

The second mistake that small business employers can make is not knowing what is contained in their contracts with employees or awards and legislation that cover them.  This can be very costly because it is usual for the lack of compliance to only come to light when an employee leaves or there is a dispute or breakdown in the relationship and the non-compliance has gone on for some time.  Don’t guess what your obligations are, know them! 

If your sales representatives are on a retainer/commission contract, the retainer must be paid regardless of their performance.  This does not mean that poor performing employees cannot be performance managed.  It does mean, however, that they cannot be ‘punished’ for poor performance by not being paid their entitlements. 

The final mistake discussed today resulting from an emotional decision is when small business employers suspect employees have misconducted themselves, particularly serious misconduct such as theft.  Usually these suspicions arise during periods where the business is not performing well.  Quite often, quick emotional decisions are made to dismiss the employee without due process resulting in unfair dismissal claims.  A recent example of this is illustrated in a decision from the Fair Work Commission. 

In this case, a small business employer was ordered to pay an employee it had dismissed $30,000 in compensation.    The employer, whose sales and income was declining, after being told the employee had been printing sales reports, came to conclusion without any corroborating evidence, that the employee had been stealing money from the business.  Instead of taking the time to consider and properly investigate the suspicions, whilst providing the employee with procedural fairness, the employer summarily dismissed her.  It was clear from the summary of facts contained in the Commission’s decision that the employer had made a decision based on his emotions. 

The Commission found that there was no basis for the employer’s assertions that the employee had been stealing and the accusations had been fabricated. 

REEFWA can help employers avoid the pitfalls associated with termination and drafting of contracts of employment. For expert advice regarding these matters or for representation at unfair dismissal proceedings please contact the Employee Relations Advice Centre on (08) 9365 7660 or advice@cciwa.com 

Elton v Acupuncture Australia Pty Ltd [2015] FWC 864 (Feb 4) 

Meeting the Minimum Income Threshold Amount – What Employers Need to Know Before 2 April 2019

By Erin Verzandvoort,
Employee Relations Adviser

Following a broad review of modern awards by the Fair Work Commission (FWC), employers in the real estate industry should start preparing for an important upcoming deadline, ending 2 April 2019. Currently, the Real Estate Industry Award 2010 (the award) prevents employers from allowing employees to remain on commission only arrangements if they do not meet the minimum income threshold amount (MITA) after an annual review period.

Employees who were engaged as commission only employees prior to 2 April 2018, need to have their gross income reviewed to establish if they achieved the MITA in the previous twelve-month period commencing 2 April 2018. For employees engaged after 2 April 2018, the review must not occur later than 12 months from the anniversary of their commencement on a commission only arrangement. The MITA is equal to 125% of the minimum wage for the employee’s applicable classification under the award. This amount is calculated as an annual gross amount, excluding statutory superannuation. Acceptable evidence of the employee having met the MITA may include; individual payment summaries, pay slips and/or commission statement records or other sales records.

It is important for employers to consider their options if it appears an employee will not meet the MITA by 2 April 2019. While the award simply states the commission only arrangement must cease, it does not provide any practical pathways for employers to choose in this event. The following options are available for consideration.

Termination

One option available to employers is to terminate the employee’s employment. This may be an appropriate solution where the contract of employment contains a provision to terminate employment if the MITA is not met. Even so, employers who terminate an employee may be at risk of an unfair dismissal  claim as well as possible claims for breaching the contract of employment. To carry out a fair and lawful termination, in accordance with the Fair Work Act 2009, employers should ensure there is a valid reason to terminate employment and a procedurally fair process is followed. Leading up to 2 April 2019, employers should monitor and manage the performance of commission only employees. Where appropriate and where it can be demonstrated that key KPIs have not been met, warning letters may need to be issued.

Change of contract

Changing the employment arrangement is an alternative option to termination of employment. If an employee fails to meet the MITA, they can no longer be employed on a commission only arrangement. However, they may still be eligible to be employed on other arrangements, such as a retainer/commission arrangement. This approach allows employers to retain employees who can no longer remain on a commission only arrangement by changing their employment conditions. An employer should not change the contract of employment without the express agreement from the employee and ideally any variation should be recorded in writing. Failure to do so could result in the employer breaching the employment contract and attract pecuniary penalties in the FWC or Federal Court.

Employers who continue to employ employees on a commission only arrangement who do not meet the MITA may be considered in breach of the award and could be liable penalties of up to $63,000 for the body corporate and $12,600 for individuals per breach. For serious breaches, under the Fair Work Amendment (Protecting Vulnerable Workers) Act 2017, employers who deliberately and systematically breach an obligation, could be liable for penalties up to $630,000 for the body corporate and up to $126,000 for individuals for serious contraventions. 

Accordingly, it is important for employers who engaged employees on commission only arrangement prior to 2 April 2018 to consider the likelihood of their commission only employees not meeting the MITA by 2 April 2019 and what options are the most appropriate for the business.

If you are considering any of the options discussed we recommend you contact the CCIWA Employee Relations Advice Centre on (08) 9365 7660 or email advice@cciwa.com

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