Redundancy & Maternity Leave. What is the law?
Sadly, businesses sometimes need to cut costs in order to survive market conditions. This can involve making employees redundant.
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.”
Many employers query how to manage a redundancy process involving staff on maternity leave. This article clarifies the issues involved.
Retaining employees on maternity leave
Employees do not have to be retained simply because they are on maternity leave. However, consultation is key. Acas explains: “Failure to consult a woman on maternity leave about possible redundancy is likely to be unlawful discrimination. A woman made redundant while on maternity leave must be offered any suitable alternative vacancy if you have one.”
Before making employees on maternity leave redundant, there are five important points to consider:
1. Genuine redundancy situation
You must be able to prove that there is a genuine need to reduce your headcount. Dismissing your employee because she has had a baby or is on maternity leave, is discriminating against her. This could lead to a discrimination claim. 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.
2. Fair selection process
You must choose whom you are going to select for redundancy fairly and reasonably. This involves choosing a reasonable selection pool and applying 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 the employee’s 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.
3. Communication and consultation
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, however if you don’t consult with her, you risk a discrimination claim. You should consult with her if she is on maternity leave but should be flexible and sensitive in your approach.
For example, you can offer to have meetings at flexible locations or online if she prefers. Keeping in Touch days could be used for this. Also, ensure she has enough time to consider any information you provide, bearing in mind that she is on maternity leave.
Compulsory maternity leave period is two weeks after a mother has given birth. You should ordinarily progress the overall redundancy process and communications until after that time.
4. Prioritised selection
Before you select an employee on maternity leave for redundancy you must first offer her any suitable vacancy available within your organisation. This includes any vacancy across your corporate group. You must offer it to her proactively (without her having to ask for it) and without any interview or application process.
You don’t need to create a role for her or dismiss someone else to make way for her. However, if any suitable vacancy must be offered it to her. This means prioritising her over any other employees who are also at risk of redundancy (even if you would usually select another candidate).
A suitable vacancy considers:
- the employee’s skills and experience, and
- whether the terms, conditions, location and status of the vacancy 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.
5. Legal Entitlements
If you decide to make an employee redundant while she is on maternity leave, she will be entitled to:
- Written reasons. You must proactively provide written reasons explaining why she is being made redundant and her employment contract is to be terminated. You should avoid any suggestion that she is being dismissed for any other reason.
- Redundancy pay. If the employee would otherwise qualify for redundancy pay (contractual or statutory) then you will need to pay this to her. You do 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 withhold statutory redundancy pay, so professional advice is recommended. (Contact us for an informal discussion.)
- Your employee must be given notice that you are making her redundant, in accordance with the notice requirements in her contract. You should also inform her that she can appeal your decision. You are only required to pay her full notice pay:
- For any periods of her notice period during which she is entitled to enhanced maternity pay.
- If she is only entitled to the statutory minimum notice period as specified within her contract (or is not entitled to at least one week more than the statutory minimum).
- Statutory Maternity Pay (“SMP”). Even if you make her redundant, your employee will remain entitled to SMP for the full 39-week period. This must be paid even if the 39-week period extends beyond the end of her employment with you.
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