Consensus HR

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Redundancy & Maternity Leave. What is the law?

Published in Employment Law

Recently when conducting some redundancies for an employer, they had two employees that were on maternity leave and were concerned how to manage this correctly as the last thing they wanted, was to be accused of sexual discrimination especially in relation to pregnancy. This company prided itself in its welfare of the team but unfortunately were experiencing a major drop in sales and needed to make some organisational changes for the continued success of the business.

Matthew from Consensus HR comments “Employers need to remember that there are set legal processes that must be followed in relation to fair reasons to dismiss someone, with Redundancy being one of those. You should also remember that it is the job you are making redundant and not the person although the loss of the job means the person selected will be made redundant. Nobody likes to make anyone redundant but employers need to ensure that they consult, consult, consult and try everything possible to avoid the need to make redundancies.”

Natasha Adom, Senior Counsel GQ Employment Law LLP comments further:

Q: Do we have to retain an employee on maternity leave in a redundancy situation?

The short answer is no. However, because employees on maternity leave have special legal rights and protections, before making such employees redundant you must tread very carefully and be aware of the following five things. Otherwise you could risk facing a costly claim.

Genuine redundancy situation

You must be able to prove that there is a genuine need to reduce your headcount. If the real reason you want to dismiss your employee is because she has had a baby or is on maternity leave, you will be discriminating against her and could face a discrimination claim.  So, you must have evidence to prove why you need to make redundancies. For example, emails, reports, statistics and other contemporaneous documents showing a downturn in business or a reduction in work and the reasons for it.

Fair selection process

You must choose whom you are going to select for redundancy fairly and reasonably. This means you must choose a reasonable selection pool and apply fair, objective selection criteria to decide who should be at risk.

For example, if attendance is one of your selection criteria, you must discount any absence that relates to her pregnancy or maternity leave.  Likewise, if performance or attitude is one of your criteria and her last performance assessment was done while she was pregnant and was lower than usual, then you must take that into account when you score her.

Communicate and consult

It is easy to forget about employees that are not physically present at work. However, if you have an employee on maternity leave, you must consult with her and give her the same information as your other staff.

It is natural to feel worried about disturbing her maternity leave, but the simple fact is that you cannot avoid it. If you do not consult with her, even if you do so with the best of intentions, you risk a discrimination claim.  Instead, you should consult with her but should be flexible and sensitive in your approach.

For example, you can offer to have meetings with her near or at her home or by videoconference if she would prefer and can use Keeping in Touch days for this.  Also, ensure she has enough time to consider any information you send her, bearing in mind that she is on maternity leave.

Of course, it would not be advisable to try to communicate with her during her compulsory maternity leave period (two weeks after a mother has given birth). You should ordinarily hold off on the overall redundancy process and communications until after that time.

Priority for vacancies

If you select an employee on maternity leave for redundancy, before you actually make her redundant you must first offer her any suitable vacancy that you have – this includes any vacancy across your corporate group.  You must offer it to her without her having to ask for it and without any interview or application process.

This does not mean that you have to create a role for her or dismiss someone else to make way for her.

What it does mean is that if you have a vacancy that is suitable for her you must offer it to her in priority over any other employees who are also at risk of redundancy (even if you would prefer another candidate, or think they might be better).

It will only be a suitable vacancy if the role is suitable and appropriate for her to do, bearing in mind her skills and experience, and if the terms, conditions, location and status of the role are at least as good as her original role. If you are unsure about whether the vacancy is suitable, you should discuss it with her as part of your consultation process. This will avoid a later complaint or claim that you unfairly withheld the vacancy.

Legal entitlements

If you decide to make an employee redundant while she is on maternity leave, she will be entitled to the following things:

Written reasons

You must provide written reasons for why you are ending her employment, without her having to ask for it. You should make clear that she is being made redundant and avoid any suggestion that she is being dismissed for any other reason.

Redundancy pay

If she would otherwise qualify for redundancy pay (contractual or statutory) then you will need to pay this to her irrespective of the fact that she is on maternity leave.

You will not have to pay statutory redundancy pay if she has unreasonably refused a suitable alternative role. However, it can be difficult to assess whether you are entitled to do so, so always seek advice about your particular situation first.

Notice

You must give her notice that you are making her redundant, in accordance with the notice requirements in her contract and inform her that she can appeal your decision.

In terms of notice pay, you must pay her for any periods of her notice period during which she is entitled to enhanced maternity pay. You must also pay her full notice pay if, under her contract, she is only entitled to the statutory minimum notice period (or is not entitled to at least one week more than the statutory minimum). Otherwise, you are not required to pay her notice pay.

Statutory Maternity Pay (“SMP”)

Even if you make her redundant, she will remain entitled to SMP for the full 39-week period. So you will need to pay this to her even if this extends past the end of her employment.