Susan Lai, a financial planning and analysis manager from Sydney, applied for maternity leave with her employer, Symantec, in January 2012. The leave was set to commence in March, and Lai was made redundant in February, although re-deployment options were made available to her as part of the redundancy process.
Lai applied to the Federal Circuit Court of Australia (FCCA) on grounds that Symantec had made her redundant because of her application for maternity leave. Symantec argued this was not the case, and her position was made redundant due to a restructuring, with 20 other redundancies occurring in the Asia Pacific region.
“The general protections provisions impose a reverse onus of proof,” Kathy Dalton, partner at K&L Gates, told HC.
General protections refer to the provisions under which employees cannot be terminated, which include (but aren’t limited to): race, colour, sex, preference, age, disability, marital status, family/carer responsibilities, pregnancy, religion, political opinion, national extraction or social origin, as well as the exercising/proposal of exercising workplace rights such as parental leave.
She explained that once a dismissed employee has proven they have a protected entitlement, the employer must then prove, on the balance of probabilities, that adverse action was not taken for a prohibited reason.
“That is, it is assumed the adverse action was taken for the prohibited reason unless the employer can prove otherwise by pointing to clear objective evidence. The reverse onus of proof makes defending general protections applications extremely difficult for employers, especially in circumstances where a dismissal was carried out for genuine reasons and in good faith, but where documentation and other evidence is not available to support the employer's position,” Dalton added.
It was found that evidence did not suggest Lai was made redundant for a prohibited reason, but that the organisation did not follow its own policy of identifying and selecting employees for termination.
“The facts in the Lai v Symantec case suggest that the employer made the decision to genuinely make the employee's position redundant because of operational reasons. The position was simply no longer required,” Dalton said, acknowledging that redundancy is an unfortunate factor of conducting business, made more so when those affected are on leave.
Dalton added that whether a person is on leave or is pregnant must be irrelevant to whether they are made redundant or not. She suggested that, for an employer to adhere to the law, they must provide clear evidence showing that the position was not required to be performed by anyone, and that it was not selected for termination for any discriminatory reasons as outlined in the general protections.
HC previously reported on employers attempting to terminate female employees weeks before applying for maternity leave, finding legal loopholes to avoid paying maternity leave. The results of this case, while legitimate, raises the question of whether more loopholes may be found and exploited. However, Dalton feels this is not a widespread issue due to the protection provisions making redundancy difficult to navigate legally even when legitimate.
“As a result of the above difficulties in defending general protection applications we are seeing employers becoming reluctant to risk any claims and therefore not proceeding with restructures or redundancy programs … as a result they can become 'immune' from redundancy even though there is a genuine case,” she stated.
Key HR Take-aways
Dalton outlined a few key points HR managers must consider when approaching redundancy that they fear may be misconstrued as adverse action on discriminatory/prohibited grounds:
Ensure all employees and their positions are dealt with objectively and decisions regarding redundancies are made according to selection criteria that is fair, objective and can be justified.
Document each stage of the process.
Keep lines of communication open at all times, including consulting with employees on periods of leave where their employment may be impacted by any major workplace changes.
Consider re-deployment opportunities and redeploy affected employees within the employer if it is reasonable to do so.
Seek legal advice prior to moving to redundancy where a discriminatory of prohibited reason is potentially involved.