Employment: Redundancy on Parental Leave
Sept. 14, 2020
An employer undertaking a restructuring /redundancy process must ensure the redundancy is genuine and that the process is procedurally fair. The threshold is even higher for justifiable termination in the case of an employee on parental leave.
Where an employee takes time off for parental leave, their workload is often covered temporarily by their co-workers. As a result, the employee is vulnerable to the observation that such arrangements could be made permanent at significant cost saving to the company (Ledger v Delmaine Fine Foods Ltd BC201460012).
The Parental Leave and Employment Protection Act 1987 (the Act) aims to mitigate this risk and creates a presumption that an employee’s position will be kept open for them to return to at the end of their parental leave.
Under section 49(1)(c) of the Act, an employer cannot terminate an employee’s employment during their absence on parental leave or during the period of 26 weeks from when they return to work. The employer may have a defence to this presumption in the case of a genuine redundancy.
In order to for the defence to apply, the employer must show that:
A redundancy situation occurred after the employer gave the employee notice that their position could be kept open; and
There was no prospect of redeploying the employee to a substantially similar position; and
Prior to the redundancy, the employer did not prejudicially affect the employee’s superannuation rights or seniority.
The employer must comply with the usual procedural fairness requirements. Extra steps may be necessary to ensure the employee on parental leave is actively involved in the redundancy consultation process in a meaningful way. Employers must ensure that they have been afforded the opportunity to engage with the process to a standard that is at least equal employees who are still in the workplace (Lewis v Greene  2 ERNZ 55).
These protections also apply to an employee in the 26 weeks following their return to work from parental leave. This is known as the ‘period of preference’, during which the employer must give preference to that employee over other applicants for any position that is substantially similar to the position the employee held at the beginning of their parental leave.
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Disclaimer: The information contained in this article is general in nature and not tailored to your personal circumstances. It is only current as at the date posted and should not be relied upon as legal advice. If you require legal advice, please contact us for further assistance.