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Employers need to be careful in dealing with parental leave

By Dean Kilpatrick, Associate

First published in The Press 14 July 2009

A recent decision of the Employment Relations Authority illustrates the need for special care when dealing with employees on parental leave, whether or not they are seeking an early return to work. Dean Kilpatrick, an employment law specialist at Duncan Cotteril, reviews the decision.

Employers need to be absolutely clear about the rights of their workers on parental leave, as an employer recently discovered.

In Fa’alili v Allied Work Force Limited, Ms Fa’alili worked as a manager in the Penrose branch of Allied Work Force.  Ms Fa’alili was two weeks into her parental leave when she unfortunately suffered a miscarriage.  She subsequently contacted her employers and arranged to discuss an early return to work. The Parental Leave and Employment Protection Act 1987 says that if an employee suffers a miscarriage, she is entitled to return to work before the originally notified date by providing 21 days notice.

While not covered in this case, it is also worthwhile noting an employee can return from leave where:

• A child is stillborn or dies;
• A child is adopted;
• The employee ceases to have care of the children; or
• The employer consents.

In this instance, Ms Fa’alili was told that because temporary cover had been arranged within the company, her early return would be disruptive.  As an alternative, Allied Work Force offered Ms Fa’alili a new role working on small projects.  After further discussions, and in particular Ms Fa’alili telling them that she wanted to try for another child in the near future, Allied Work Force retracted the new job offer.  They instead offered a Projects Co-ordinator role, with reduced hours. Ms Fa’alili accepted. 

But as the Employment Relations Authority noted, Ms Fa’alili was so traumatised by her miscarriage that she was not in a rational state of mind to make a decision when she signed the new employment agreement with Allied Work Force.  It also said that Allied Work Force had effectively terminated Ms Fa’alili’s employment by telling her that her old job was not available.  The actions of Allied Workforce resulted in significant compensation being awarded to Ms Fa’alili.

The Act is clear. When an employee is returning from parental leave (early or otherwise) there is a presumption that he or she can return to the role they occupied before taking leave.

This case illustrates the rights of employees when they are on parental leave - either short or longer term. Employers should never assume that the staff member will not return or want to return to work on reduced hours.  The requirement is that they return to their old position.  Conversely, it is also important to ensure that anyone who is appointed (either internally or externally) to cover the person on parental leave is aware that the position is temporary.  Employers must ensure they have clear provisions in the employment agreement covering the temporary nature of the appointment.  It is also worthwhile confirming that, while it is expected the temporary employee will be needed until a certain date, the position could finish earlier as this case highlights.

Another important factor to consider, which was not covered in this case, but is worth noting in the context of the Act, is how to deal with employees on parental leave if you are restructuring.  There is nothing to stop an employer from consulting with someone on parental leave and making their position redundant. But they must give that person first priority for any potential job openings that occur for 26 weeks from the date the parental leave was due to expire.

The message from the Employment Relations Authority is clear: Employers must be careful dealing with staff who are on parental leave.

Dean Kilpatrick is an employment law specialist at national and trans-Tasman law firm Duncan Cotterill. D.kilpatrick@DuncanCotterill.com.

Disclaimer: the content of this article is general in nature and not intended as a substitute for specific professional advice on any matter and should not be relied upon for that purpose.