Keeping an employee’s position open during parental leave

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From July 1 July last year, primary carer leave (colloquially referred to as “maternity leave”) increased from 18 weeks to 22 weeks paid leave, and the payment rate increased from $538.55 to $564.38 gross per week.

The primary reason behind these changes was to allow a longer bonding period between an infant and its primary carer (not restricted to, but usually the birth mother) and to allow breastfeeding mothers to breastfeed for the first six months of an infant’s life, as recommended by the World Health Organisation.

This article sets out only the most basic rights pursuant to the Parental Leave and Employment Protection Act 1987 (PLEPA). It is a complex, unwieldy piece of legislation that would be impossible to fully summarise in 800 words, and reading the full act is highly recommended for anyone suffering from insomnia.

For a primary carer to be entitled to paid primary carer leave, they must have worked continuously, on average for more than 10 hours per week, for the period of six months immediately before the birth or agreed date of the leave commencing.

A person eligible for primary carer leave may also take extended leave. Those who have worked for six months before the leave are entitled to 26 weeks’ leave (which includes the 22 weeks of paid leave with the remainder unpaid), and those who have worked for 12 months or more before commencing parental leave are entitled to 52 weeks (including the 22 weeks’ paid leave, with the remainder being unpaid).

Section 41 of the PLEPA contains a presumption that an employer will keep an employee’s position open for the periods set out above, and the options for an employer to override this presumption are very limited. In a nutshell, the options are either that, due to the key nature of the employee’s position, it is not reasonably practicable to replace the employee on a temporary basis (Option 1), or where there is a genuine redundancy situation (Option 2).

In the case of Option 1, an employer would need to be able to satisfy two arms of the test: first that the employee is in fact a key employee, which, among other things, factors in the size of the employer and the training period and skills required for the position, and secondly, that it is ‘not reasonably practicable’ to temporarily replace the key employee. Satisfying this test is considerably trickier than it may sound.

It would be a rare case and difficult to argue that a key employee cannot be replaced on a temporary basis, given all employees are entitled to four weeks’ annual leave a year. An employer would need to be able to demonstrate that while the employee could be temporarily replaced for four weeks, that would not be possible for the duration of the parental leave period.

Further, in Auckland Provincial District Local Authorities’ Officers IUOW v Onehunga Borough Council [1989] 1 NZILR 476  (LC), Judge Castle held that:

…the use of the word ‘practicable’ in our view has to be looked at as something far different from the words ‘possible’ or ‘available’ or ‘practical’, all of which necessarily implies a subjective test. It could be argued perhaps that whatever the Legislature meant by the words ‘not reasonably practicable’ could be construed as ‘virtually impossible’. That to us appears to be the broad position under the Act….

So an employer would need to argue that temporarily replacing an employee on parental leave would be ‘virtually impossible’, and there is also case law that states even a difficulty or impossibility in finding a temporary replacement is not relevant to this test, unless it arises out of the nature of the position (as opposed to the employer simply not being able to find someone, for example, due to unavailability or remote geographical location).

Option 2 (redundancy situation) needs to be approached very cautiously, given the significant increase in judicial scrutiny that now applies to contested redundancies, as described in last month’s column. While a genuine redundancy situation may arise before or during a period of parental leave, redundancies which are suspected of being carried out with the intention of  defeating an employee’s rights pursuant to the PLEPA are likely to end with reinstatement of the employee and an order for the employer to pay significant remedies to the employee to boot.

The PLEPA requires employees to apply for primary carer leave at least three months before its commencement. Employers are urged to use this time well and to take all necessary steps to replace the employee temporarily, if that is what is needed. Employers may need to throw the net wide, including considering contractors and temping agencies, given most employees would be unwilling to leave a permanent job for a temporary role.

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About Author

Erin Burke

Employment Lawyer and Director at Practica Legal Email: erin@practicalegal.co.nz phone: 027 459 3375