Monday, 27 March 2023

Court finds the refusal of an employee’s parental leave request did not amount to a forced resignation

In a recent case, the Federal Circuit and Family Court of Australia found that a HR Manager who had been employed for 3 months was not forced to resign when her request for 12 months maternity leave was denied.

The applicant in the matter, Ms Jane Sayabath, was employed by Willowdale Nominees Pty Limited (Willowdale), on 13 September 2021 as a Human Resource Manager.

Approximately one month after commencing employment, Ms Sayabath informed Willowdale that she was pregnant.

Willowdale subsequently requested that Ms Sayabath provide a formal proposal concerning her working arrangements including the amount of leave she wished to request and options to fill her role.

Ms Sayabath then sent an email to Willowdale requesting 12 months off work, with the option to return to work earlier if her baby was ready. In response, Willowdale informed Ms Sayabath that:

  • She had not been employed for more than 12 months to be given maternity leave under the National Employment Standards or company policies; and
  • Due to the importance of the HR Manager position to Willowdale, a temporary fill would not meet business requirements.

As a result of the above, Ms Sayabath’s request for 12 months’ parental leave was declined and Willowdale informed her that while it was entirely up to Ms Sayabath what she wanted to do, one option available to her was to resign. Willowdale requested to further discuss the issue the next day with Ms Sayabath, however she declined this request and did not return to work.

Willowdale then sent Ms Sayabath a letter confirming that despite that her application for leave was refused, as she had not attended work since or otherwise communicated with Willowdale, it was assumed that she had commenced leave as planned, and her conduct in going on leave without approval and not returning to work was inconsistent with and showed an intention not to be bound by the terms of her employment. As a result Willowdale treated her employment as at an end. Ms Sayabath denied she had resigned, but indicated she ‘accepted’ Willowdale’s decision to terminate her employment.

Ms Sayabath then made a general protections claim involving dismissal, asserting that her termination was unlawful as it was on the basis that she was pregnant and/or to prevent her from accessing her accrued personal/carer’s and/or annual leave.

The Decision

The Court did not consider that Willowdale’s denial of Ms Sayabath’s request for 12 months’ unpaid parental leave was an act that forced her to resign from her employment. Instead, the Court said that the reason that Ms Sayabath resigned from her employment was because she was not in a position to continue with her own employment.

As Ms Sayabath had not been employed for 12 months, Willowdale was under no legal obligation to grant her 12 months unpaid parental leave. The Court commented that it would be ‘absurd’ to argue that Ms Sayabath was forced to resign by Willowdale not agreeing to something that it was not legally obliged to agree to.

Although the Court conceded that Ms Sayabath would not have ended her employment relationship had Willowdale granted her request, when her request was declined she had two options; she could either resign, or remain employed and try to access her rights to other entitlements such as carer’s leave. The necessity for Ms Sayabath to choose between these two options was not the fault of Willowdale, and the case was dismissed.

Entitlement to Parental Leave

Under the National Employment Standards, all employees are eligible for unpaid parental leave if they have completed at least 12 months of continuous service with their employer. This includes casual employees if they have been working for their employer on a regular and systematic basis for at least 12 months and have a reasonable expectation of continuing work for their employer on a regular and systematic basis, had it not been for the birth or adoption of a child.

For employees who have not yet reached 12 months’ continuous service as at the date of commencing leave, they are not entitled to unpaid parental leave, or the return-to-work guarantee.

Lessons for Employers

This case highlights that if an employee requests leave that they are not legally entitled to, an employer may not be found to have dismissed that employee by refusing the request for leave; even in circumstances where it would not be possible for the employee to continue to work due to the refusal.

However, employers must still be careful to ensure that they do not prevent employees from utilising different entitlements that they are otherwise able to access.

Further, it is important to be aware that pregnant employees (and parents) are protected from discrimination, and generally speaking it is good practice to try to negotiate a fair and reasonable period of leave or other arrangements for those who do not qualify for parental leave. For example, the employer could provide access to other forms of leave (annual leave or unpaid leave). This will also assist in defending any general protections or discrimination related claims.

In essence, it is important for employers to be direct with employees who are not yet eligible for leave, and clearly establish the employee’s intentions, as well as what the business can accommodate, well ahead of the employee ceasing work.

Please contact HR Legal if you require assistance with managing requests for leave entitlements in your workplace.

Case reference: Sayabath v Willowdale Nominees Pty Ltd, Williams, Cooper, Notley [2023] FedCFamC2G 104


This article was produced by HR Legal. It is intended to provide general information only in summary format on legal issues. It does not constitute legal advice, and should not be relied on as such.