Any person who has ever looked for employment either through the newspaper, online or via another medium, would have probably come across a job ad in which the position required a potential employee to undertake the duties of a worker who was undertaking a period of unpaid parental leave. As noted previously here at FindLaw, an employee under s 84 of the Fair Work Act (the FWA) who has taken parental leave, is covered by the return to work guarantee under the provisions of the FWA – which then leads to the question of ‘where does this leave the employee who has replaced the worker taking unpaid parental leave?’ Replacement workers hold an interesting employment position and there are many elements associated with such a role that are important considerations from the standpoint of both the employee, as well as the employer.
The contract for a replacement employee
There are no specific provisions in the FWA that requires an employer to inform a replacement employee that they are engaged in the role on a temporary basis, and that the employee who has taken parental leave, has the right to return to their pre-leave position once their period of leave has come to an end. However, an employer still has to inform the replacement employee of their status or the employer may be opening themselves up to potential litigation if the position of the replacement employee is terminated, upon the return of the employee who has taken parental leave. The courts have viewed non-disclosure in such instances as potentially breaching s 18 or 31 of the Australian Consumer Law (the ACL) which are provisions prohibiting misleading and deceptive conduct (Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31). Therefore, an employer must 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.
Because an employee that is on parental leave is required to specify a date in which they will return to work, a fixed 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 the employer in initiating a fixed term contract with a replacement employee 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 contract.
The exclusion of fixed term employees from the usual NES entitlements is given efficacy via s 123(1)(a) of the FWA, which states the following:
“(1) This Division does not apply to any of the following employees:
(a) an employee employed for a specified period of time, for a specified task, or for the duration of a specified season;”
Fixed task employment contracts
An alternative to a fixed term contract, is a contract for a fixed task, which specifies to the replacement employee that the task in which they are undertaking, is the replacement of an employee who is on parental leave, and that the contract of employment will come to an end upon the return of the employee on leave. Additionally, fixed task contracts are also covered by the same provisions found for fixed term contracts, such as s 386(2)(a) and s 123(1)(a) of the FWA.
What happens if the employee undertaking unpaid parental leave wishes to vary their return to work date?
Employees undertaking parental leave have the option to extend their leave for up to two years in some cases if they so choose. Alternatively, an employee on parental leave also has the option of returning to work earlier than anticipated – which may cause a potential issue with the position of the replacement employee. Therefore, the question that needs to be asked is: If the return date of the employee taking parental leave has been varied, what happens next? The options available to an employer, and the effects that it will have on the replacement worker, are dependent on whether the employee on leave chooses to extend or to reduce their leave.
If the employee on parental leave chooses to extend the period of leave, then an employer should either vary the terms of the replacement worker’s contract, or a new contract covering the extended period is to be produced. It’s important that the changing circumstances to the working relationship is reflected via some variation of the agreement because if not – 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.
In contrast, if the employee on parental leave expresses a wish to return to work earlier, unless there is 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 if they choose to terminate the agreement earlier than the period which is reflected in the contract, therefore, potentially exposing an employer to damages.
Issues regarding leave and employment contracts can be difficult, especially if your status as an employee is not permanent. If you have any questions or concerns regarding your contract of employment, always seek the assistance of a lawyer who will be able to help in your matter.
