A permanent part time employee (Employee A) has been given the opportunity to apply for an internal opportunity due to a maternity leave period of the current incumbent (Employee B). The manager of Employee A has stated that she will not guarantee that her position will be available to Employee A to return to at the conclusion of the fixed term period. Assuming that Employee B returns from maternity leave at the conclusion of the maternity leave period and returns to her role, what happens to Employee A? Is the organisation responsible to seek alternative suitable roles? What if no suitable roles are available at that time?
By agreement, an employer may allow a current employee to move into a new fixed term contract for the purpose of replacing another employee who is on parental leave. An employer may refuse to guarantee that there will be an alternative position (or the original position) available for the employee when the fixed term contract ends.
The employer should expressly state that the employee’s permanent role will be terminated and the fixed term position will commence on the next working day. The employer should also expressly state that the employer will not guarantee the employee any other position within the organisation at the conclusion of the fixed term contract. If the employee agrees to accept the fixed term position on this basis, the agreement should be confirmed in writing. There are also a number of other matters of which an employer must inform parental leave replacement employees.
The employer should at all times act in a manner consistent with the employee now working in a fixed term position. The purpose of this conduct would be to decrease the risk that the employee could argue that the employee had reasonably developed an expectation of on-going employment at the conclusion of the fixed term contract. Where representations are made to the employee that employment is on-going, there are risks that the employee could make claims such as an application for unfair dismissal.
If the fixed term contract ends due to the effluxion of time, the employer will not be responsible for considering redeployment opportunities. This is because the requirement to consider reasonable redeployment opportunities exists only when an employee has been made redundant. An employee will not be regarded as having been made redundant when their employment is terminated due to the expiration of a fixed term contract.
The definition of ‘genuine redundancy’ is contained in section 389 of the Fair Work Act 2009(Cth). A key element of the definition of ‘genuine redundancy’ is that a person was dismissed because the person’s employer no longer required the person’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise. In the circumstances described, however, the employment of the person would be terminated simply because the fixed term contract ended.
It is likely that with appropriate representations made by the employer, the employment of Employee A would be regarded as terminated at the end of the fixed term contract. In these circumstances, it is unlikely that the employer would be required to seek alternative suitable roles.
It is recommended that an employer seek specific advice in finalising the letter to the parental leave replacement employee (the fixed term contract) to ensure that the employer is minimising the risks discussed above.
Clinton is the Publications Manager at Ai Group. He is responsible for a number of key services including Annotated Modern Awards, Workplace Relations Handbooks and the management of Ai Group’s HR and Health & Safety Resource Centres. Clinton has a Masters in Employment Relations and previously held advisory roles with the Workplace Authority and Fair Work Ombudsman.
