Return-to-work trouble: Role and bonus dispute after parental leave

The Fair Work Commission (FWC) recently dealt with a case that highlighted key workplace rights for employees returning from parental leave.

The worker claimed that her employer both denied her a significant performance bonus and placed her in a role that differed from her pre-leave position. She argued these actions effectively forced her to leave her job.

The case examined what constitutes constructive dismissal and when discretionary bonuses become enforceable workplace rights. It also questioned the extent of an employer's obligations to returning parents regarding role placement.

Worker’s role before taking parental leave

The worker started as operations manager in April 2022. Before taking parental leave, she moved to a project manager role, though she helped train new operations managers during the transition.

Upon returning in April 2024, she was assigned as workforce planning manager, reporting to the operations manager instead of the managing director.

The employer argued this change wasn't formally implemented since she hadn't signed a new contract. They maintained that reporting line changes were permitted under her original contract and the role's duties weren't significantly different.

Worker’s exclusion from employer’s bonus scheme

The Short-Term Incentive (STI) bonus formed 15% of the worker's base salary, amounting to $22,050. When other employees received their bonuses, including her manager, she questioned why she was excluded. The employer said the bonus was entirely discretionary according to her contract.

The Commission referenced the Silverbrook Research Pty Ltd v Lindley case regarding discretionary bonuses:

"That the decision as to whether [the worker] should receive the bonus was 'entirely within the discretion of' [the employer] should not be construed so as to permit [the employer] to withhold the bonus capriciously or arbitrarily or unreasonably..."

The dispute escalated when the worker's lawyers demanded her return to the operations manager role and payment of the STI bonus.

The employer refused, stating the operations manager position was permanently filled and maintained their discretion over bonus payments.

Worker’s role change after parental leave

The Commission analysed both claims separately. On the role change, it found:

"The issue of the reporting lines is, in my view, not particularly relevant. Even if there was a change in the reporting lines, I do not think this is a significant change to the role."

However, regarding the bonus, the Commission stated:

"The bonus is a significant part of [the worker's] remuneration package. I do not accept that it is merely an ancillary term, but rather I find that it is a fundamental term of [the worker's] employment contract."

The final determination explained:

"I find that such a person would say that [the employer] had demonstrated that it did not intend to be bound by a fundamental part of the employment contract. In so finding I conclude that [the employer] has engaged in behaviour that amounts to repudiation of [the worker's] employment contract."

The Commission held it had jurisdiction to hear the worker's general protections application under section 365 of the Fair Work Act 2009, as the bonus non-payment constituted constructive dismissal. It then ordered to schedule a conference to discuss the parties’ settlement.