Redundancy is a complex and sensitive process, especially when it involves employees on parental leave. For Australian employers, it is essential to ensure that redundancy decisions comply with the Fair Work Act 2009 (Cth) and other relevant legislation.
Mishandling redundancy in this context can expose your business to legal claims, including unfair dismissal and discrimination.
This guide, prepared by our employer lawyer, provides employers with practical, legally compliant steps for managing redundancy during parental leave and minimising risk
Key Takeaways
- Redundancy must be genuine and unrelated to the employee’s parental leave status
- The Fair Work Act 2009 (Cth) provides specific protections for employees on parental leave
- Employers must consult with employees on leave about proposed redundancies
- Redeployment options must be explored and offered where available
- Failure to follow legal requirements can result in unfair dismissal or discrimination claims
Understanding Employer Obligations
Australian law provides strong protections for employees on parental leave. Employers must ensure that any redundancy is genuine and not influenced by the employee’s leave status or future plans to take leave.
To be considered a genuine redundancy under the Fair Work Act:
The employee’s position must no longer be required due to operational changes
There must be a legitimate business reason for removing the role
The employer must follow consultation and redeployment requirements
Important: Employees on parental leave have the right to return to their pre-leave position. If that role is no longer available, they must be offered an equivalent role in terms of pay, hours, and responsibilities.
For a broader overview of your legal responsibilities, read our Employer’s Guide to the Fair Work Act.
Consultation and Redeployment Requirements
Failing to consult or consider redeployment properly is one of the most common mistakes employers make when managing redundancy during parental leave (and one of the most likely to result in legal action).
What Does Consultation Involve?
If your business is covered by a modern award or enterprise agreement, you are likely required to:
1. Notify the employee in writing of the proposed changes
2. Provide detailed information about the redundancy, including:
- Why the role is being made redundant
- The timeline for proposed changes
3. Discuss the impact of the changes on the employee’s role
4. Invite the employee to respond, and genuinely consider their feedback
5. Keep a written record of all communication, even if the employee is on unpaid leave
Tip: Even if your business is not award-covered, consultation is still best practice and strengthens the defensibility of the redundancy if challenged.
For a detailed breakdown of what constitutes proper consultation, check out our guide on How Employers Can Meet Consultation Obligations.
What Are Your Redeployment Obligations?
Before finalising any redundancy (and especially where the employee is on leave) you must:
Identify alternative roles within the business or any associated entities
Consider remote, part-time, or flexible arrangements if appropriate
Assess whether the employee has transferable skills that could apply to another position
If no redeployment is possible, you must be able to demonstrate that you genuinely explored options.
Remember: Failing to offer suitable redeployment (even if you think the employee might not be interested) could make the redundancy legally invalid.
For case law guidance on what constitutes a genuine redundancy in Australia, see High Court Redefines Genuine Redundancy in Australia.
Employer Compliance Checklist
Here’s a quick reference for employers navigating redundancy during parental leave:
- Confirm the redundancy is genuine and supported by operational needs
- Ensure the employee’s parental leave status did not influence the decision
- Check for applicable modern awards or enterprise agreements requiring consultation
- Notify and consult with the employee, even if they are on leave
- Offer redeployment opportunities where available
- Document every step for your internal records
- Review the termination letter for clarity and compliance
- Seek legal advice before finalising any redundancy involving leave
To understand how adverse action laws apply during parental leave, see our article on Parental Leave and Adverse Action.
Real Life Example
A national retail company restructured its operations while an employee was on parental leave. The employer failed to notify or consult the employee, assuming their absence meant consultation wasn’t required.
We helped the employee lodge an unfair dismissal claim, arguing that the redundancy was not genuine and that consultation obligations were ignored. The Fair Work Commission ruled in favour of the employee, awarding compensation and ordering the employer to update its redundancy procedures.
Frequently Asked Questions
What are my obligations when making an employee redundant during parental leave?
You must ensure the redundancy is genuine, consult with the employee about the proposed changes, and consider all reasonable redeployment options. The decision cannot be based on the employee’s parental leave status.
Can I terminate employment due to redundancy while an employee is on parental leave?
Yes, but only if the redundancy is genuine and you have met all consultation and redeployment obligations under the Fair Work Act 2009 (Cth). The redundancy must not be related to the employee’s leave.
What if I fail to consult with an employee on parental leave?
Failure to consult can result in unfair dismissal claims and may lead to compensation orders or reinstatement by the Fair Work Commission.
Do I need to offer redeployment to an employee on parental leave?
Yes, you are required to consider and offer any suitable alternative positions within your business or associated entities before finalising redundancy.
What risks do I face if I mishandle redundancy during parental leave?
Mishandling can result in unfair dismissal, general protections, or discrimination claims under Australian law, potentially leading to compensation or reinstatement orders.
If you’re unsure about your obligations or want your redundancy process reviewed before acting, Prosper Law can help. Our team advises employers across Australia on legally compliant, low-risk employment practices.
