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employment

Can you be made redundant while on parental leave?

Key Takeaway

An employee on parental leave in New Zealand can be made redundant if the redundancy is genuine and unrelated to their leave. Employers must follow a fair process, act in good faith, and explore alternative roles, as outlined by the Parental Leave and Employment Protection Act 1987 and the Employment Relations Act 2000.

Redundancy While on Parental Leave in New Zealand

In New Zealand, employees on parental leave are generally afforded significant job protection. However, this protection is not absolute, and it is possible for an employee to be made redundant while on parental leave. This typically occurs only if the redundancy is genuine, driven by legitimate business reasons, and is entirely unrelated to the employee's parental leave status. Employers must adhere to specific legal obligations under the Parental Leave and Employment Protection Act 1987 and the Employment Relations Act 2000.

Job Protection During Parental Leave

The Parental Leave and Employment Protection Act 1987 (PLEPA) provides key protections for employees taking parental leave:

  • An employee's employment is protected during the period of parental leave [Source: Parental Leave and Employment Protection Act 1987, s 41]. This means the employer must generally hold the employee's job open for their return.
  • It is unlawful for an employer to dismiss an employee solely or mainly because they are pregnant or intend to take, or are taking, parental leave [Source: Parental Leave and Employment Protection Act 1987, s 42].
  • The continuity of an employee's employment is maintained during parental leave, which means their employment relationship is preserved [Source: Parental Leave and Employment Protection Act 1987, s 45].

What is a Genuine Redundancy?

A redundancy occurs when an employer's requirements for an employee to perform a particular kind of work have ceased or diminished. A redundancy is considered genuine if the employer has a legitimate commercial or operational reason for the role to no longer exist, or for the number of such roles to be reduced, and this decision is unrelated to the employee's parental leave status. The Employment Relations Authority (ERA), an independent body that helps resolve employment relationship problems in New Zealand, assesses the genuine nature of a redundancy in disputes by considering whether the employer's actions were what a fair and reasonable employer could have done in all the circumstances at the time [Source: Employment Relations Act 2000, s 103A].

The Redundancy Process for Employees on Parental Leave

When considering redundancy, especially for an employee on parental leave, employers must follow a fair process and act in good faith. Good faith is a fundamental principle of New Zealand employment law, requiring employers and employees to be active and constructive in their employment relationship [Source: Employment Relations Act 2000, s 4].

This means employers must:

  • Inform and Consult: Genuinely inform the employee about the proposed redundancy, the reasons behind it, and any potential impacts. This includes making reasonable efforts to contact and consult with the employee on parental leave [Source: Employment Relations Act 2000, s 4].
  • Provide Information: Provide the employee with all relevant information to enable them to comment meaningfully on the proposed changes [Source: Employment Relations Act 2000, s 4].
  • Consider Feedback: Give the employee a reasonable opportunity to provide feedback on the proposal and genuinely consider their comments before making a final decision [Source: Employment Relations Act 2000, s 4].
  • Explore Alternatives: Consider alternatives to redundancy, such as redeployment to another role within the organisation, even for employees on parental leave.

Employer Obligations Regarding Alternative Positions

If an employee's position ceases to exist due to redundancy while they are on parental leave, the employer has specific obligations under the PLEPA:

  • The employer must inquire whether there is a suitable alternative position available within the organisation [Source: Parental Leave and Employment Protection Act 1987, s 43(1)].
  • If a suitable alternative position is available, the employer must offer it to the employee [Source: Parental Leave and Employment Protection Act 1987, s 43(1)].
  • A 'suitable alternative position' must be one for which the employee is qualified and capable of performing, and it must be substantially the same as the employee's original position in terms of its status and ordinary pay [Source: Parental Leave and Employment Protection Act 1987, s 43(2)].
  • If the employee declines a suitable alternative position, their employment may then end [Source: Parental Leave and Employment Protection Act 1987, s 43(3)].

Preference in Employment After Parental Leave

If an employee's position ceases to exist while they are on parental leave, and no suitable alternative was offered or accepted, the employee may have a preferential right to employment for a period after their parental leave ends [Source: Parental Leave and Employment Protection Act 1987, s 44]. This means if a substantially similar position becomes available within 26 weeks after the end of their parental leave, the employer generally must offer it to the former employee [Source: Parental Leave and Employment Protection Act 1987, s 44(1)].

Challenging Redundancy: Unjustifiable Dismissal

If an employee believes their redundancy was not genuine, or the process followed by the employer was unfair or breached good faith obligations, they may raise a personal grievance for unjustifiable dismissal [Source: Employment Relations Act 2000, s 103]. A personal grievance is a formal complaint an employee can raise if they believe their employer has treated them unfairly or broken employment laws.

When a personal grievance for unjustifiable dismissal is raised, the ERA will consider whether the employer's actions, and how they acted, were what a fair and reasonable employer could have done in all the circumstances at the time the dismissal occurred [Source: Employment Relations Act 2000, s 103A]. This includes a thorough assessment of both the genuine commercial reason for the redundancy and the fairness of the process, particularly regarding the employer's obligations towards an employee on parental leave.

When to Seek Independent Legal Advice

Navigating redundancy, especially while on parental leave, can be complex. Individuals who believe their redundancy may not be genuine, or who have concerns about the process followed by their employer, may consider seeking independent legal advice. Information and assistance can be obtained from official bodies such as Employment New Zealand, or from community resources like Community Law Centres which provide free legal advice.

Key Resources