Pregnancy and maternity leave in Australia

Redundancy, Pregnancy & Maternity Leave in Australia: Your Questions Answered

The topic of redundancy and pregnancy in Australia is still quite tricky. Though Fair Work legislation outlines the entitlements of pregnant women and new parents, one in two Australian mothers still experience workplace discrimination at some point.

It’s unlawful in Australia to be made redundant because of pregnancy, maternity leave, or other family responsibilities. It is possible to be made redundant during pregnancy or parental leave, but only based on genuine business need, and the employee must be consulted during this process. 

If you’re facing redundancy, especially during pregnancy or early parenthood, seeking out professional redundancy planning services can help you navigate this difficult time. 

To learn more about Australian regulations on redundancy before, during and after pregnancy, read on below. 

Can You Be Made Redundant While Pregnant in Australia?

It’s against Australian law to terminate an employee because she is pregnant. Being made redundant before maternity leave because of a pregnancy is considered discrimination. However, it’s possible to be made redundant during a pregnancy for otherwise legally valid reasons.

Under the Fair Work Act 2009, it’s unlawful for an employee to be dismissed for discriminatory reasons, including pregnancy, family or caring responsibilities, parental leave, or medical absence. Pregnancy entitlements in the workplace include parental leave, special maternity leave, and ‘safe jobs’ or opportunities to reduce physical risks. 

If the reasons an employee is made redundant are unrelated to pregnancy or maternity leave – in other words, due to a genuine business need – this can still be legally valid. The business must be facing genuine economic, financial or organisational circumstances to make a staff member redundant, including during their pregnancy. 

Can I Be Made Redundant While on Maternity Leave in Australia?

A woman can be made redundant while on maternity leave in Australia but only for genuine reasons, like economic downturn, insolvency or bankruptcy, and/or organizational restructuring. A company cannot terminate someone on maternity leave for reasons related to the pregnancy.

Australian law lays out some regulations on terminating employment during parental leave. It’s a requirement that staff on unpaid parental leave must be consulted and be part of discussions about major changes affecting their job, including potential redundancy. This consultation must happen when  the decision is in progress, and can’t be delayed until after parental leave ends.

When an employee goes on parental leave, the job in her position is often given to a temporary employee. Otherwise, duties may be covered by one or more existing staff. Many women fear that they’ll be made redundant if their employer decides their job can be done by other staff even after maternity leave ends.

However, there is a “Return to Work Guarantee” prescribed by the Fair Work Act 2009 stipulating that employers must allow a person on maternity or parental leave to return to work. The employee must be allowed to resume her regular position or, if the position no longer exists, to a similar or available position that the employee is qualified for.

It is best to seek professional advice or contact the Fair Work Commission if you are unsure if your redundancy is legally sound.

Can I Ask for Voluntary Redundancy While on Maternity Leave?

Yes, you can ask for voluntary redundancy while on maternity or parental leave if you discuss this with your employer and give the correct notice period.

Usually, seniors or those who have ten-year tenures are offered voluntary redundancy. If you aren’t in that category, you can approach your employer to discuss your options.

Some benefits of taking voluntary redundancy are that you get to part ways with the company on good terms and since you’re in control, you can plan your next steps better. It is also less disruptive, and the process can be quicker.

Does Voluntary Redundancy Affect Maternity Pay?

In Australia, voluntary redundancy payments are an agreed amount, so no explicit compensation for maternity pay is included. It’s recommended you discuss this with your employer if you want to bring maternity pay into the lump sum.

Who Pays Maternity Pay if Made Redundant?

You are entitled to receive your statutory maternity pay even after you have been made redundant. The employer is responsible to give you your entitlements before severance to the company.

Can I Be Made Redundant After Maternity Leave?

A woman cannot be made redundant after maternity leave to prevent her from resuming her position. She is protected by the Fair Work Act’s Return to Work Guarantee which stipulates that employers must allow someone who has gone on maternity or parental leave to return to work. 

The employee must be allowed to back her pre-maternity or pre-parental leave position or to a similar or available position that she is qualified for if the position no longer exists.

If decisions around redundancy or any other workplace changes are being made while an employee is on parental leave, the employer must keep the employee fully informed. Any changes to status, pay or location of employment must involve consultation with the employee, which cannot be delayed until after they return to work.

However, there is no set period after returning from parental leave where a staff member cannot be made redundant. A genuine redundancy may arise at any time, but if you feel the reasons behind a redundancy may not be lawful, you should consult the Fair Work Commission as soon as possible. 

Does Maternity Leave Count Towards Redundancy in Australia?

If you went on unpaid maternity or parental leave, it does not count towards your redundancy pay continuous service period, as unpaid leave is considered an excluded period. However, it also does not break an employee’s continuous service with the employer. 

For example, if you’ve been with your employer for at least three years, but for 12 months you were on unpaid parental leave, this will not count towards your period of continuous service. Unpaid parental leave will be deducted from your continuous service but does not reset it. 

Below is a table for redundancy entitlements in Australia. You can calculate your redundancy pay by multiplying your base rate by the redundancy pay period.

Period of Continuous ServiceRedundancy Pay*
At least 1 year but less than 2 years4 weeks x base rate
At least 2 years but less than 3 years6 weeks x base rate
At least 3 years but less than 4 years7 weeks x base rate
At least 4 years but less than 5 years8 weeks x base rate
At least 5 years but less than 6 years10 weeks x base rate
At least 6 years but less than 7 years11 weeks x base rate
At least 7 years but less than 8 years13 weeks x base rate
At least 8 years but less than 9 years14 weeks x base rate
At least 9 years but less than 10 years16 weeks x base rate
At least 10 years12 weeks x base rate
*On top of the compensation specified here, the redundancy payment should also include unused sick and/or annual and long-service leave, and/or payment in lieu of the notice period.

If you haven’t been with your employer for a year and went on unpaid parental leave, unfortunately, you cannot get redundancy pay.

Related Questions

Is It Illegal to Terminate a Pregnant Employee?

In Australia, it is illegal to terminate a pregnant employee if the reason is that she is pregnant or has the potential to become pregnant. This is in contravention of the Sex Discrimination Act 1984. However, if the termination is a result of the company being insolvent or bankrupt, meaning it is a genuine redundancy, it is legal to terminate a pregnant employee. Other reasons that a pregnant employee can be terminated are poor work performance and serious misconduct, which requires evidence.

Can I Lose My Job While on Maternity Leave?

Yes, a woman can lose her job while on maternity but only because of genuine redundancy. Reasons such as insolvency or bankruptcy and/or organizational restructuring (caused by a merger, acquisition, or takeover) are considered valid and lawful reasons to terminate someone who is on maternity leave. Other than those stated above would be considered unjust. The employer must give notice and/or make a payment in lieu of the notice period.

Facing an Unexpected Redundancy?

Unfortunately, becoming redundant doesn’t mean your financial obligations stop, adding even more stress to an uncertain time. Thankfully, there are many resources available that can help you manage your financial challenges.

Especially during later stages of pregnancy, or when caring for a new baby, it can be challenging to navigate how to find a new job after being made redundant. Speaking to a financial advisor specialising in redundancy planning is a great way to plan ahead and bring some clarity to the situation. 

Redundancy planning can help make the path ahead clearer, from the best way to use your redundancy payment to insurance and cash flow management. 

Reach out to WealthVisory Private Clients to make your redundancy planning appointment.

 Disclaimer:

This article is provided as general information only and does not consider your specific situation, objectives or needs. WealthVisory Private Clients makes no warranties about the ongoing completeness or accuracy of this information. It does not represent financial advice upon which any person may act. Implementation and suitability requires a detailed analysis of your specific circumstances.

Matthew Rutter, Director/Head Financial Advisor of WVPC

Matthew has a wide ranging background in business, finance, taxation and accounting with over 25
years’ experience, firstly as an Accountant before becoming a Financial Planner. Matthew has been in
the Financial Planning Industry since March 1998 and has been the principal of his own financial
planning practice since 2003.

Matthew has studied a Bachelor of Commerce degree from Newcastle University majoring in Financial
Accounting and the Diploma of Financial Planning from Deakin University. Matthew is a Registered Tax
Agent and is a member of the National Tax & Accountants Association (NTAA).

Matthew has particular expertise in the areas of retirement planning, superannuation, investments and
insurance. His emphasis is on building a professional, integral and lasting relationship with clients with
the objective of assisting them to achieve their financial and lifestyle goals.

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top