Whilst there are no specific provisions in the Fair Work Act (FWA) that require an employer to inform a replacement employee that they are engaged in the role on a temporary basis, if this is not made clear then an employer may be opening themselves to potential litigation if the position of the replacement employee is then terminated upon the return of the employee who has taken parental leave.
An employer should structure a contract of employment in such a manner that minimises any potential claims that may be made by the replacement employee when their contract comes to an end. A fixed term contract may be an option for the replacement worker which corresponds with the date in which the employee on parental leave is expected to return.
The potential benefits for an employer in this scenario are:
- a replacement worker cannot bring an unfair dismissal claim under Part 3-2 of the FWA, s 386(2)(a) which states; “the person was employed under a contract of employment for a specified period of time, for a specified task, or for the duration of a specified season, and the employment has terminated at the end of the period, on completion of the task, or at the end of the season;”
- the replacement employee is not entitled to the minimum notice of termination requirements as outlined in s 117 of the National Employment Standards (NES);
- the replacement employee is not entitled to severance benefits, unless their contract of employment makes specific provisions for such a payment upon the ending of their employment (Section 123(1)(a) of the FWA).
Employee on unpaid parental leave applies to vary their return to work date?
Employees undertaking parental leave have the right to request to extend their leave for up to two years in some cases. Alternatively, an employee on parental leave also has the right to request that they be able to return to work earlier than the notified date of their return – this may lead to a potential issue with the position of the replacement employee.
If the employee on parental leave submits their request and this is supported by the employer then an employer should either vary the terms of the replacement worker’s contract, or issue a new contract covering the extended period.
It’s important that changing circumstances to the working relationship are reflected via some written variation of the agreement, if this is not done – and the replacement employee continues working beyond the fixed term contractual period – an employer may be required to provide ‘reasonable notice’ to the replacement employee if they wish to bring the relationship to an end, because a situation may have arisen in which the relationship is now one of an ongoing contract between the parties.
On the other hand if the employee on parental leave returns to work earlier, unless an express right to terminate the fixed term contract before the expiry date is included in the Contract then the employer may be in breach of the contract. Where an employer then chooses to terminate the agreement earlier than the period specified in the contract, this has the potential to expose the employer to damages.
Need assistance with your Contract documentation? Call us today for advice and support.