Made redundant during parental leave? Worker claims unfair dismissal

The Fair Work Commission (FWC) recently dealt with a case involving a Korean grocery store worker who was dismissed after her web designer position was made redundant during her parental leave. The employer's subsequent failure to provide adequate alternative employment constituted repudiatory conduct.

The case arose when the worker attempted to return from six months of unpaid parental leave, only to discover her role no longer existed and she would be offered cashier duties at reduced pay.

The worker challenged the employment termination, arguing she was constructively dismissed when the employer repudiated her contract by eliminating her specialised position and offering unsuitable alternative work.

The grocery retailer contested the dismissal claim, maintaining that they wanted to keep the worker employed and were prepared to negotiate terms for different duties within their financial constraints.

Designer position eliminated during parental leave

The worker commenced employment as a casual web designer in April 2023, becoming permanent in April 2024 with responsibilities including creating promotional materials using specialised software, designing leaflets, selecting products for social media promotion, and installing in-store advertisements.

She had been granted flexible working arrangements during pregnancy, working two days remotely and three days on-site.

After commencing parental leave in August 2024, the employer decided in February 2025 to make her position redundant due to claimed financial difficulties and reduced trading performance.

The employer merged her specialised design duties with cashier responsibilities, requiring all work to be performed on-site and at significantly reduced complexity and remuneration levels.

Crucially, the worker was not consulted about these changes while on parental leave, only learning about the restructuring when she contacted management in March 2025 to discuss her planned return to work.

The employer had assumed there would be time for negotiations, given their agreement that she would provide one to one-to-two months' notice before returning.

Return-to-work negotiations break down over conditions

When the worker contacted management about resuming her hybrid work arrangement, she was informed that the previous flexible working arrangement would no longer be available and her salary could not be guaranteed due to unspecified changed circumstances.

The proposed alternative involved full-time on-site work combining basic design tasks with cashier duties at substantially reduced pay rates.

The worker confirmed her understanding through text messages with the managing director, clearly stating she did not intend to return under these conditions while seeking direct confirmation from senior management.

The employer confirmed the accuracy of her understanding while expressing willingness to negotiate within their financial constraints.

Despite the worker's formal email in April 2025 requesting resolution and outlining her position based on Fair Work Ombudsman guidance, the employer failed to respond to her correspondence.

This communication breakdown contributed to the deterioration of the employment relationship and the worker's eventual decision to seek legal remedies.

Jurisdictional complexity over dismissal timing

The case presented unusual jurisdictional challenges as both parties initially agreed the employment had ended, but disputed whether a dismissal had occurred and when it took effect.

The worker first filed a non-dismissal general protections application in May 2025, asserting she remained employed but was denied her right to return to work.

After receiving legal advice suggesting her case involved a dismissal, the worker discontinued her initial application and filed a new dismissal-based claim in June 2025.

This created complex questions about when the employment actually terminated and whether her applications were properly made within the required timeframes.

The employer argued that no dismissal occurred because they consistently expressed willingness to employ the worker in alternative roles and never formally terminated her employment.

They contended the worker's subjective belief about her entitlements led her to reject reasonable alternative arrangements.

Commission applies repudiation and election principles

The Commission applied contract law principles of repudiation and election to determine when the dismissal occurred, finding the employer's decision to make the worker's position redundant constituted repudiatory conduct, giving her the right to accept or reject the breach.

However, the worker did not immediately elect to terminate the contract; instead, they engaged in ongoing negotiations about alternative arrangements.

The decisive moment came when the worker filed her dismissal application in June 2025, which the Commission characterised as her election to accept the employer's earlier repudiation of the employment contract.

This analysis treated the dismissal as occurring at the employer's initiative despite the worker's active choice to pursue legal remedies.

The Commission distinguished between the employer's February 2025 redundancy decision, which had no immediate effect during parental leave, and the subsequent repudiatory conduct through March to May 2025 involving offers of substantially different employment terms.

The worker's acceptance of this repudiation through legal action crystallised the dismissal.

Parental leave rights versus business restructuring

The case highlighted tensions between parental leave return-to-work guarantees and employers' rights to restructure during economic difficulties.

The employer argued they could legitimately make business changes during the worker's absence and were offering the most suitable alternative role available within their financial constraints.

The worker contended that the employer's conduct violated her statutory rights to return to her pre-leave position or an equivalent role, arguing that the proposed cashier duties were unsuitable for her skills and qualifications.

She maintained she had received no indication of business difficulties or restructuring plans before taking parental leave.

The Commission found the employer's conduct constituted repudiation regardless of their genuine desire to retain the worker, emphasising that good intentions do not prevent contractual breaches.

The decision establishes that significant changes to employment terms during parental leave can constitute dismissal if the employee ultimately rejects the altered arrangements through legal action.