Paid Parent Leave mistake costs employer $170,000

A company's parental leave policy - which breached the National Employment Standards which most Australian businesses must provide to all employees under the Fair Work Act 2009 - has cost it $170,000.

Coffey Projects (Australia) denied an employees request for 12 months parental leave to care for his newborn twins because of a policy which made unpaid parental leave only available to "primary" caregivers. As a result,  the employee took a mix of paid and unpaid leave.

When the employee returned to work, he was only offered part-time work until the company made him redundant a year later.

The employee successfully argued before the Federal Circuit Court that the company's denial of parental leave meant he did not gain access to the flow-on requirement that he be offered his previous full-time position or its equivalent on returning from leave.

The court found that because the employee would been entitled to return to full-time employment after his parental leave finished, he should receive the difference between the part-time salary he got and the full-time pay he should have received for the period until being made redundant.

The employee and company agreed this would have amounted to $109,000.

The employee, the court ruled, had also been entitled to $9000 in accrued annual leave and an additional $51,000 in severance pay as a full-time employee instead of the payout he received as a part-timer.

The court ruled that the employee be paid for the unpaid wages and redundancy pay that he would have received if he had been allowed to access the leave and its flow-on benefits.

The court will also determine the penalty for the company's breach of the Fair Work Act at a later date.

Scullin v Coffey Projects (Australia) Pty Ltd [2015] FCCA 1514 (4 June 2015)

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