“We need to restructure, but the employee whose position is affected is on parental leave. Can we still make them redundant?”

What if they are on long-term sick leave?

Or workers’ compensation?

The answer in each case is:

Potentially, yes.

There is no blanket rule that says a position can never be made redundant simply because the employee occupying it is on parental leave, absent because of illness or receiving workers’ compensation.

But these are exactly the situations where I would tell an employer:

Be very careful.

There is a fundamental difference between:

“We no longer require this position.”

and:

“This employee’s absence has become inconvenient.”

If those two things become blurred, an otherwise legitimate commercial decision can become an expensive employment law problem.

Three cases demonstrate why.

First: The Position Is Redundant, Not the Employee

Redundancy is about the job.

Broadly, a genuine redundancy can arise where an employer no longer requires an employee’s job to be performed by anyone because of changes in the operational requirements of the business.

Financial pressures, automation, outsourcing, lost contracts, mergers and the consolidation of positions can all result in legitimate restructures.

Those things don’t stop happening because someone is away from work.

But where an employee is on parental leave, sick leave (otherwise known as personal/carers leave) or workers’ compensation, additional legal protections may apply.

One question becomes particularly important:

Why was this position selected?

1. Can an Employee Be Made Redundant While on Parental Leave?

Potentially.

But parental leave creates additional protections.

An employee returning from unpaid parental leave generally has a statutory return-to-work guarantee.

Broadly, they are entitled to return to the position they held immediately before commencing parental leave. If that position genuinely no longer exists, obligations can arise concerning an available position for which they are qualified and suited that is nearest in status and pay.

There are also consultation obligations where decisions are being made that will significantly affect the employee’s pre-parental leave position.

Put simply:

Out of sight cannot mean out of the restructure.

Case Study: Heraud v Roy Morgan Research Ltd [2016] FCCA 185

Ms Heraud was a senior employee of Roy Morgan Research.

While she was on maternity leave, the business underwent a restructure.

Importantly, there were genuine commercial circumstances surrounding the restructure.

As Ms Heraud approached her return, she requested flexible working arrangements.

Decisions were subsequently made about her return to her previous position, potential opportunities in a newly created Research Centre and ultimately the termination of her employment.

The Court found contraventions of the General Protections provisions arising from decisions including not returning Ms Heraud to her pre-parental leave position, not making positions in the Research Centre available to her and terminating her employment.

Her exercise of workplace rights associated with maternity leave and requesting flexible work became central to the case.

The eventual financial consequences?

Approximately $215,760 in compensation plus $52,000 in penalties.

More than $267,000.

The Lesson From Heraud

A legitimate restructure does not override an employee’s workplace rights.

Their absence or request for flexible work should not become part of the reason they are selected.

And they shouldn’t be forgotten when consultation and alternative positions are being considered.

2. Can an Employee Be Made Redundant While on Sick Leave (personal/carers)?

Again, potentially.

But this is where employers can confuse three very different things:

Illness. Capacity. Redundancy.

Imagine an employee has been absent for six months.

Other employees are covering their duties.

Management is frustrated.

Eventually someone says:

“We can’t keep doing this. Why don’t we make the position redundant?”

However the legal framework requires us to ask:

Does the business still need someone to perform the job?

If the answer is yes, you may not have a redundancy issue.

You may have a medical capacity issue.

Case Study: Farragher v PBE Rutherford Mining Pty Ltd (No 2) [2026] FedCFAMC2G

Neal Farragher was the General Manager of CouplerCo, a business operated by PBE Rutherford Mining.

His relationship with another senior employee had deteriorated and, in October 2021, he made a formal complaint about the workplace environment.

Around the same period, Mr Farragher was diagnosed with an adjustment disorder.

He subsequently took personal leave and lodged a workers’ compensation claim.

There was also something else happening in the background.

The business was restructuring.

And Mr Farragher’s position was already expected to become redundant.

That is what makes this case particularly interesting.

The Court accepted that there was a legitimate plan for his position to disappear by around June 2022.

But his employment didn’t last until June 2022.

Instead, the redundancy was brought forward.

The Problem Wasn’t Necessarily the Redundancy. It Was Why It Was Accelerated.

The Court examined a series of decisions made after Mr Farragher’s workplace complaint and during his periods of absence.

A voluntary redundancy was offered shortly after his complaint.

When that wasn’t accepted, further steps were taken concerning his employment, including an abandonment letter and restrictions on his access to the company’s server.

The decision to accelerate the redundancy was subsequently formalised.

Mr Farragher was advised in December 2021 that his employment would end in early January 2022, while he remained away from work on workers’ compensation.

The Court ultimately found that PBE Rutherford Mining had contravened the General Protections provisions of the Fair Work Act 2009.

The problem was that the timing of his exit had been brought forward for reasons that included his exercise of workplace rights.

Those rights included his workplace complaint, personal and temporary illness leave and workers’ compensation claim.

A Genuine Redundancy Doesn’t Necessarily Save You

The Court found that the Managing Director had sought to bring Mr Farragher’s employment to an end earlier than the legitimate restructure otherwise required.

So even though the position was destined to disappear, the employer still faced liability because of what influenced the decision to accelerate the termination.

The financial consequences were significant.

Mr Farragher was awarded approximately:

$34,724 in past economic loss; and
$50,000 in general damages.

Civil penalties were also imposed.

The company was ordered to pay $39,960.

And importantly for senior decision-makers, the Managing Director was personally penalised $11,322 for his involvement in the contraventions.

That is more than $136,000 in compensation, damages and penalties arising from the conduct, before considering the substantial cost and management time involved in litigation stretching over several years.

Don’t disguise a capacity issue as a redundancy issue.

3. What If Workers’ Compensation Is Involved?

Workers’ compensation adds another layer of risk.

There are actually two issues.

The first is whether an employee already receiving workers’ compensation can be made redundant.

Potentially.

But specific statutory protections can apply to injured workers.

For example, in Queensland, legislation includes protection against dismissal within the relevant statutory period where injury-related incapacity is solely or mainly the reason for dismissal.

That doesn’t mean businesses can’t restructure.

Positions occupied by injured workers can genuinely disappear.

But I would ask the decision-maker:

If this employee had never been injured, would we still abolish this position?

If the answer is yes, I would ask them to show me the commercial rationale and the business case.

If the answer is:

“Probably not…”

Then we may not really be dealing with redundancy.

There is also a second workers’ compensation risk that is often overlooked:

What if the way you conduct the redundancy causes the workers’ compensation claim?

Case Study: Scott v Workers’ Compensation Regulator

Scott v Workers’ Compensation Regulator [2021] QIRC 110 provides a useful Queensland example.

Mr Scott had worked for his employer for approximately 15 years.

After taking leave for unrelated medical reasons, he returned to work.

Shortly afterwards, he was called into a meeting and told his employment was redundant.

Effective immediately.

Mr Scott subsequently made a workers’ compensation claim for a psychiatric injury.

The claim was initially rejected by WorkCover Queensland and that decision was upheld by the Workers’ Compensation Regulator.

Mr Scott appealed to the Queensland Industrial Relations Commission.

There was no real dispute that Mr Scott had suffered a psychiatric injury or that the redundancy had caused it.

The critical question was whether the injury arose from reasonable management action taken in a reasonable way.

The QIRC was critical of the process.

Mr Scott had been encouraged to believe his employment was secure following his return.

Performance complaints had contributed to the decision, but he had not been given an opportunity to respond.

He had not been consulted about the proposed redundancy.

And he was effectively blindsided at the meeting.

The QIRC ultimately found the termination was not reasonable management action taken in a reasonable way and accepted his statutory workers’ compensation claim.

The Lesson From Scott

There are really two decisions involved in redundancy:

Decision 1: Should this position continue to exist?

Decision 2: How are we going to implement that decision?

Employers naturally focus on Decision 1.

The savings.

The organisational structure.

The financial modelling.

The future workforce.

But Scott demonstrates why Decision 2 matters as well.

A legitimate commercial decision still needs to be implemented appropriately.

And in an environment where psychosocial hazards are receiving substantially greater attention, the way organisational change is managed is increasingly important.

Timing Can Become Evidence

There is a common thread running through all three cases.

Timing.

An employee announces they are pregnant. Shortly afterwards their position is selected for redundancy.

An employee requests flexible work before returning from parental leave. A redeployment opportunity disappears.

An employee is diagnosed with an adjustment disorder. The redundancy process is sped up and brought forward.

An employee makes a workers’ compensation claim. Several months later their position disappears.

None of those timelines automatically proves unlawful conduct.

There may be perfectly legitimate explanations.

And the employer needs an answer supported by evidence.

The Email I Never Want to See

Imagine this email during a restructure:

“Given Sarah is going to be away for another six months anyway, her position seems the logical one to remove.”

Commercially?

Someone might think it makes sense.

Legally?

It creates a serious problem?

The same goes for:

“We don’t know when John will be back from his injury, so let’s include his role.”

Those comments potentially connect the employee’s workplace rights, illness or injury directly with the redundancy decision.

And remember:

Emails survive.

Teams messages survive.

So do Board papers and meeting notes.

What Do the Three Cases Tell Employers?

Put the three cases together and they create a useful framework.

Heraud: WHY this employee?

A genuine restructure does not override an employee’s workplace rights.

Farragher: WHAT is really driving the termination?

Don’t disguise an illness, absence or medical capacity issue as something else.

Scott: HOW did you implement the decision?

Even a legitimate management decision needs to be implemented properly.

Different cases. Different risks. One common thread:

Calling something a “redundancy” doesn’t make the legal risks disappear.

10 Questions to Ask Before Making the Employee Redundant

Before proceeding, I would want the CEO, CFO, Managing Director and/or HR team to ask: