13 June 2008
Key Points:
The decision in Iliff illustrates some of the issues which employers need to be mindful of when facilitating the return to work of employees following a period of maternity leave.
In Iliff v Sterling Commerce (Australia) Pty Ltd [2007] FMCA 1960 the Federal Magistrates Court was called upon to decide whether unlawful discrimination arose where an employee’s position was made redundant in lieu of their being allowed to return to work following a period of maternity leave.
Background
Ms Belinda Iliff commenced employment as a marketing assistant in March 2002 with Sterling Commerce ( Australia) Pty Ltd, a software and solutions company. In April 200 3, was promoted to the position of Marketing Manager. mid-2004, informed her supervisor, Mr Vulcan, that she was pregnant.
Before she went on maternity leave in December 2004, it was agreed that Ms Iliff would initially return to work on reduced hours and progressively resume full-time duties. The agreed arrangements were subject to the changing needs of the business and any restructure of the marketing operations. While was on maternity leave Sterling Commerce engaged Ms Matthews as a replacement on a contract basis.
In March 2005, Ms Iliff told Mr Vulcan that she wished to return to work in April 2005 for four days a week. Ms Iliff was informed there had been a restructure and the Marketing Manager position had changed reporting requirements. Ms Iliff was also informed that she would be contacted in the future about her return to work arrangements. Ms Iliff however was not contacted until the end of April 2005, by which stage Mr Vulcan had decided that he wished to retain Ms Matthews instead of Ms Iliff as she was better qualified for the role.
When Ms Iliff was contacted in late April 2005, she was informed that her position had been made redundant. Ms Iliff was also informed that under the proposed restructure there would be a "new" position of "Marketing Manager, Financial Services Solutions APO" for which a job description was being prepared. Ms Illiff was invited to apply for this position, however, in doing so Sterling Commerce also made it clear that it did not regard it to be a "suitable alternative position for [her] current role." Ms Iliff was further told she could be paid a redundancy payment but only conditional upon her signing a deed of release.
Ms Iliff then sought to clarify as to whether there were any part-time positions in the new marketing structure, to which she was informed there were none. This was followed by a chain of correspondence between Ms Iliff’s solicitors and Sterling Commerce that led to the proceedings before the Federal Magistrates Court.
Decision
Federal Magistrate Burchardt found that if Ms Iliff had not gone on maternity leave it is more probable than not that she would have continued in the employment.
Magistrate Burchardt however also found that the real reason why Ms was not permitted to return to work was not the fact that she was on maternity leave but that Sterling Commerce had formed the view Ms Matthews was the better employee, thereby making Ms Iliff surplus to requirements. Accordingly, he found that there was no unlawful discrimination on the ground of sex in contravention of the Sex Discrimination Act 1984.
Magistrate Burchardt however found that Sterling Commerce had discriminated against Ms Iliff on the ground of sex when it imposed a requirement that she enter into a deed of release to access a redundancy payment and payment in lieu of notice to which she was otherwise entitled. In this respect, Burchardt F M stated if Ms "had not been a woman she would not have been on maternity leave and if she had not been on maternity leave [ Sterling Commerce] would not have required a release from her". Accordingly, Ms Illiff was granted the payment of moneys withheld, namely an amount of $22,211.54 for the redundancy payment.
He also found that Sterling Commerce had breached the return to work provisions in the then Schedule 1 A of the Workplace Relations Act 1996 ( WRA) and in doing so imposed the maximum penalty of $33,000. At the time, return to work provisions that applied to Sterling Commerce required it to have appointed Iliff either to the position she held immediately before commencing leave, or, if that position no longer existed and there were other positions available for which Ms Iliff was qualified and capable of performing, then appointment to a position as near as possible that was comparable in status and pay to the former position. New return to work provisions in the WRA are in similar terms and penalties also apply in the event of a breach.
Sterling Commerce subsequently filed an appeal in the Federal Court, which has been dismissed.
Implications
The decision in Iliff illustrates some of the issues which employers need to be mindful of when facilitating the return to work of employees following a period of maternity leave.
While an employer’s business and operations may legitimately change during the absence of an employee on account of maternity leave, there are particular protections afforded to such workers both under anti-discrimination and industrial laws which should be taken into account.
In the case of the former, employers should exercise caution in restructuring situations so as to not treat such employees differently to other employees on account of their having taken a period of maternity leave.
In the case of the latter, prudent employers should make themselves familiar with their obligations in respect of return-to-work guarantees for employees coming back to work following maternity leave. In this regard, such employees are entitled to:
Finally, it is noted that the Federal Government’s proposal to introduce minimum employee entitlements (that is, the National Employment Standards) do not presently deal with these return to work guarantees. As the National Employment Standards however have only been released as an exposure draft it is difficult to make any final observations about how these guarantees might continue under the proposed Government reforms. It is expected that there will be further clarity on this issue during the course of the year, when the Government intends to finalise the National Employment Standards as part of its substantive legislative reforms to be introduced into Parliament.
Thanks to Louisa MacPhillamy for her help in writing this article.
For further information, please contact Hedy Cray.
