By Kelly Godfrey

An employee must serve the requisite qualifying period with your business to be eligible for parental leave. But what happens when a pregnant employee is not eligible for parental leave? Could refusing the employee parental leave lead to legal exposure? This issue was dealt with in a recent case in the Federal Circuit and Family Court of Australia.

In Sayabath v Willowdale Nominees (2023), the Court dealt with a claim by an employee who was not entitled to unpaid parental leave under the Fair Work Act 2009 (Cth) (FW Act) or the employer’s parental leave policy. The employer refused the employee’s request for 12 months of unpaid parental leave on the grounds the employee’s position was necessary to the everyday operation of the business. This led to the employee resigning. The employee claimed the resignation was forced by the employer’s conduct and that conduct amounted to adverse action taken by the employer because of the employee’s pregnancy in contravention of section 351(1) of the FW Act.

The Court ruled the employer’s refusal of parental leave leading to an employee’s resignation did not constitute adverse action, where the employer was not obliged to grant the leave request and did not otherwise seek to end the employment. The employee had the option to remain in her employment, propose an alternative arrangement or resign. Where an employee chooses to remain in her employment, she may have the option to seek access to legal rights or other leave to have the baby. An employee may also choose to propose an alternative arrangement, which the employer can either accept or reject. The employer’s conduct must also not influence the employee’s choice of the most appropriate option.

The Court observed the employee did not seek to arrange alternative arrangements to remain in her employment. The employee’s resignation in such circumstances arose out of the employee no longer being in a position to continue with her employment, as opposed to the employer’s refusal of leave. The employee had chosen to resign because of her inability to perform the role, not because of the employer’s conduct.