Replacement Employees During Parental Leave

Many employers are unaware of how they should employ (and their obligations to) employees who are replacing an employee who is on unpaid parental leave.

The Fair Work Act 2009 (the Act) imposes an obligation on employers to notify a prospective replacement employee that:

• the period of their engagement is on a temporary basis only. This means that the employer cannot advertise or hold out that the engagement will be on a fixed term basis;
• the employee on parental leave has the right to return to their original position at the end of their leave;
• the employee has the right to return and the employer has the right to request that the employee return to their original position (or to cancel the leave if it has not commenced) in the event that the child is stillborn or dies after birth; and
• the employer has a right to request the employee to return to their original position in the event that the employee on maternity leave ceases to have responsibility of the child.

As an example, if an employee on parental leave gives birth, but the child dies after 2 months during the period of parental leave of 12 months, the employee reserves the right to end their maternity leave early and return to their original position.

The importance of this is that if, in the above example, the employer engaged the replacement employee on a fixed term basis and the employee on parental leave chooses to come back early, then the employer could potentially be breaching the contract of employment with the replacement employee (and may be liable to pay the remainder of the term of the contract of employment). On top of that, a penalty of up to $51,000 may be imposed on the employer for each breach of the Act. As you can see, a simple mistake may become a costly affair at the end of the day.

Therefore, it is important for employers to keep these obligations in mind before engaging a replacement employee. Managing the employees expectations from the outset, by notifying them as required by the Act and ensuring their term of employment is set by reference to replacing the employee on parental leave (rather than a fixed term), will prevent issues later on.

By Geeta Vanugopal – Adviser