- Dismissal during parental leave is possible. It’s possible to dismiss an employee on maternity or parental leave if you have a lawful, supportable reason unrelated to pregnancy, parental leave, or caring responsibilities.
- Redundancy must be genuine. Redundancy may also occur, but it must satisfy the genuine redundancy test under section 389 of the Fair Work Act 2009 (Cth).
- Consultation is required as the decision is made. You must consult employees on unpaid parental leave about significant changes affecting their role while the decision is being made, not only when they return.
- The return-to-work guarantee still applies. Employees generally have a right to return to their pre-parental-leave job, or a suitable available position nearest in status and pay if that job genuinely no longer exists.
While dismissal during parental leave isn’t always unlawful, it can create exposure under unfair dismissal, general protections and anti-discrimination laws.
The applicable claim will depend on the reason for the dismissal, the process followed, and the employee’s circumstances.
This guide breaks down when you can and cannot dismiss an employee on parental leave, your legal obligations as an employer, and ways to ensure legal compliance throughout the process.
Can you dismiss an employee while they are on maternity or parental leave?
Yes. Parental or maternity leave dismissal in Australia is possible through:
- The employee’s resignation
- Termination for a lawful and supportable reason
- A genuine redundancy
- The expiry of a genuine fixed-term arrangement, where applicable
However, while parental leave doesn’t create an absolute prohibition on dismissal, an employer can’t dismiss or disadvantage an employee because they:
- Are pregnant.
- Took, or proposed to take, parental leave.
- Have family or caring responsibilities.
- Exercised, or proposed to exercise, a workplace right.
- Have a pregnancy-related illness or protected absence.
Multiple protections could apply, including general protections provisions of the Fair Work Act 2009 (Cth), the Sex Discrimination Act 1984 (Cth), and other anti-discrimination legislation.
What reasons can justify dismissal during parental leave?
A valid reason for dismissal may still arise while an employee is on parental leave. Examples include:
- Serious misconduct
- Misconduct discovered while the employee is absent
- Genuine performance or capacity issues unrelated to pregnancy or parental leave
- Genuine redundancy
- The expiry of a genuine fixed-term employment arrangement
Keep in mind that a “valid reason” isn’t automatically enough to make a dismissal lawful. The reason must be legally supportable, and the employer must follow a fair and lawful process.
When can’t you dismiss an employee on parental leave?
You can’t dismiss or take other adverse action because of a protected attribute, protected workplace right, or protected absence.
High-risk reasons include:
- Pregnancy
- Taking or proposing to take parental leave
- Family or caring responsibilities
- Exercising a workplace right, such as taking leave available under the Fair Work Act
- Pregnancy-related illness or a protected absence connected with pregnancy
The legal pathway will depend on the circumstances:
- General protections may apply when an adverse action is taken because an employee exercised a workplace right or for a prohibited reason.
- Discrimination law may apply when treatment is connected with pregnancy, sex, family responsibilities, or another protected attribute.
- Unfair dismissal may apply when the employee is eligible, and the dismissal is harsh, unjust, or unreasonable, subject to available exceptions and jurisdictional requirements.
These causes of action are separate. The same conduct may potentially support more than one claim, but each claim has its own legal test.
Can an employee be made redundant while on maternity or parental leave?
Yes. An employee can be made redundant during maternity or parental leave if the redundancy is genuine and the decision is unrelated to pregnancy, parental leave, or caring responsibilities.
Under section 389 of the Fair Work Act, a dismissal is a genuine redundancy only if:
- The job is no longer required.
- Required consultation occurs.
- Redeployment is not reasonable.
A redundancy is about the job, not simply the individual employee. If the same job continues to exist and the employer merely prefers another person to perform it, the position may not be genuinely redundant.
What should employers check before making a role redundant during parental leave?
Before deciding to terminate an employee on parental leave, employers should work through the following checklist:
- Is the job itself genuinely disappearing, or will someone else continue performing substantially the same role?
- What operational change supports the decision?
- Has the employee been included in consultation while on leave, and has the employer genuinely considered their feedback throughout the process?
- Does an award or enterprise agreement impose additional consultation requirements?
- Does the return-to-work guarantee apply?
- Are suitable alternative roles available?
- Have roles within associated entities been considered for redeployment?
- Is the selection process free from pregnancy, parental leave, and caring responsibility bias?
- Is there written evidence supporting the operational reason?
- Have notice, redundancy pay, annual leave, and other final entitlements been calculated correctly?
- Has the employer prepared a clear, written termination or redundancy letter?
The decision-maker should also be able to explain why the employee was selected without referring negatively to their absence, leave arrangements, or anticipated return-to-work needs.
How does redeployment work for an employee on parental leave?
Redeployment and the return-to-work guarantee are related but different:
| Concept | What it addresses |
|---|---|
| Return-to-work guarantee | The employee’s right to return after unpaid parental leave to their former job, or a suitable available position nearest in status and pay if that job no longer exists. |
| Reasonable redeployment | One element of the genuine redundancy test that requires consideration of suitable work within the employer’s enterprise or an associated entity. |
The concepts may overlap. For example, if the employee’s former position has disappeared but a suitable role is available elsewhere in the business, that role may be relevant to both the return-to-work obligation and the redeployment analysis.
Can redundancy during parental leave amount to discrimination or adverse action?
A restructure can be legitimate even if it affects an employee on parental leave. The timing alone doesn’t establish unlawful conduct.
However, the employer should be able to demonstrate that the decision was made for genuine operational reasons and not because the employee was pregnant, absent, or on parental leave.
Higher-risk situations include:
- Selecting the employee because they are away from the workplace
- Concluding that the business has “managed without them”
- Preferring the maternity leave replacement simply because that person is already performing the work
- Treating parental leave as a negative factor in the selection criteria
- Bypassing consultation or redeployment because the employee is absent
- Describing one reason externally, while internal communications suggest another reason
- Making comments about the employee’s future availability, commitment, or caring responsibilities
Focus on the evidence behind the decision to determine if protections apply.
Does an employer need to consult an employee who is on parental leave?
Yes, if the statutory parental leave consultation obligation applies. Additional consultation requirements may also arise under an applicable award or enterprise agreement, particularly in a redundancy process.
If you decide to make a significant change affecting the status, pay, or location of an employee’s pre-parental-leave job, you must take reasonable steps to:
- Contact the employee while they are on leave.
- Explain the proposed change and its likely effect.
- Provide a genuine opportunity for the employee to discuss the change.
- Allow the employee to respond and provide relevant information.
- Genuinely consider the employee’s feedback.
- Check any applicable award or enterprise agreement consultation clause.
- Keep records of the consultation process.
This consultation must occur as the decision is being made, not when the employee returns.
What is the return-to-work guarantee after parental leave?
An employee who has taken unpaid parental leave is generally entitled to return to the job they held before taking leave. This right applies even if another employee has been performing the role as a replacement.
If the original job no longer exists or has changed, the employee must generally be offered an available position:
- For which they are qualified and suited
- Nearest in status and pay to their pre-parental-leave position
This guarantee is important when assessing a proposed redundancy.
What if a maternity leave replacement is still doing the employee’s job?
Keeping a replacement employee doesn’t deprive the returning employee of their right to their original role if that role still exists. The employee is entitled to return to the same job even if another person has been working in it as a replacement.
If you wish to retain the replacement, you may need to discuss alternative arrangements, such as transferring the replacement to another available role.
How should performance or misconduct be handled during parental leave?
Misconduct
Serious misconduct or other genuine conduct issues can still be addressed while an employee is on parental leave.
You should:
- Investigate the issue fairly.
- Give the employee a reasonable opportunity to respond.
- Consider whether the evidence supports the proposed outcome.
- Follow contractual, award, enterprise agreement and policy requirements.
- Avoid treating the employee’s leave or caring responsibilities as misconduct.
Being absent on parental leave doesn’t prevent an employer from communicating with the employee about a disciplinary process, provided the contact is reasonable and the process is fair.
Performance
Performance management should rely on evidence that predates the protected absence or is clearly independent of it.
Be sure to distinguish genuine, pre-existing performance issues from concerns connected with:
- Pregnancy-related illness
- Temporary reduced duties
- Reasonable adjustments
- Lawful parental leave
- A protected absence
From there, you can follow your ordinary performance-management process and avoid using parental leave as evidence of poor commitment or capability.
What notice and redundancy entitlements apply if employment ends during parental leave?
For their final pay, the employee may be entitled to:
- Notice of termination or payment in lieu
- Redundancy pay, if eligible
- Accrued annual leave and other final entitlements
- Contractual entitlements
- Award or enterprise agreement entitlements
- Any applicable employer-funded parental-leave benefits, subject to their terms
Depending on the type of parental leave, the treatment may be different. For example, unpaid leave doesn’t count toward service for redundancy pay but doesn’t break continuous service. By contrast, the entire employment period generally counts when calculating notice, except for unauthorised absences.
How do ex gratia payments and deeds of release fit into a parental leave redundancy?
An employer may offer an ex gratia payment in addition to the employee’s statutory, award, enterprise agreement, and contractual entitlements. There is no standard percentage or amount that applies in every case.
If the parties use a deed of release, be sure to:
- Calculate mandatory entitlements separately.
- Clearly identify the additional ex gratia amount.
- State the claims, obligations, and liabilities covered by the release.
- Ensure the employee receives appropriate independent legal advice if required or advisable.
You may wish to obtain legal advice if discrimination, general protections, or other employment claims may be in issue.
What records should employers keep?
Documentation is particularly important if termination coincides with pregnancy or parental leave. Be sure to retain:
- The business case or restructuring proposal
- Organisational charts before and after the proposed change
- Board or management approvals, where relevant
- Redundancy selection criteria
- Consultation correspondence
- The employee’s feedback and the employer’s responses
- Redeployment search records
- Details of relevant vacancies
- Final decision documents
- Calculations of notice and redundancy entitlements
- The written termination or redundancy letter
Records should show both the operational reason for the decision and the steps taken to comply with consultation, redeployment, and return-to-work obligations.
Conclusion
Parental leave doesn’t create an absolute prohibition on dismissal. However, the reason for termination must be lawful and independent of pregnancy, parental leave and caring responsibilities.
Redundancy during parental leave requires particular care. Employers should establish that the job genuinely no longer exists, consult the employee while they are on leave, consider redeployment, and comply with the return-to-work guarantee.
If your business is considering a termination or restructuring involving an employee on parental leave, obtain employment law advice before communicating the decision or beginning the consultation process.
