Redundancy on Maternity Leave

It can be a large concern for businesses, but if redundancies are unavoidable and an employee is on maternity leave, it can prove a daunting prospect to handle. 

Remember, redundancy should be a last resort. But if it’s an essential requirement, we offer total redundancy support and redundancy advice.

But in this guide, we explain how you can take the steps if you feel it’s necessary. 

Is it legal to make a redundancy on maternity leave?

It’s not automatically unfair dismissal, or an act of discrimination if you dismiss an employee by redundancy whilst on maternity leave. 

However, the relationship between maternity leave and redundancy can be complex. An employee on maternity leave has certain special protections that you need to be aware of.

Employment law protects maternity rights during redundancy. S.17 and S.18 of the Equality Act 2010 are specific provisions for this.

They protect employees against discrimination with maternity and redundancy.

Voluntary redundancy while on maternity leave is a possibility if you are comfortable paying a redundancy lump sum. However, you may require to pay both a redundancy and maternity pay lump sum.

So, it’s important to understand the redundancy process and how you can go about following a fair approach. 

How redundancy during maternity leave works

Maternity and redundancy should ideally remain separate. However, redundancy during maternity leave in the UK is not unheard of.

If a redundancy situation arises during maternity leave, then you must follow the standard warning and consultation procedures. 

Inform staff they’re at risk of redundancy and invite them to put forward alternatives to the suggestion.

Employees have an entitlement to alternative employment. If there’s a suitable available vacancy, an employee made redundant on maternity leave has an entitlement to the vacancy. 

This option should be clear before the end of their employment under an existing contract of employment.

These are important redundancy rights when on maternity leave you must consider. If you fail to offer suitable available alternative employment to an employee on maternity leave, dismissal for redundancy is automatically unfair. 

This can result in substantial compensation payouts at the employment tribunal. 

The roles you must consider will prove to be a suitable vacancy if the:

• Projected work is appropriate.
• Capacity and place of employment, and the other terms and conditions, are acceptable. Namely, not less favourable than those applying under her previous contract.

A discrimination claim would be valid if they are selected for redundancy in preference to other employees holding positions like theirs. This is regardless of the length of service. 

In this case, the circumstances constituting the redundancy will apply equally to other employees.  

A discrimination claim would be valid if there were factors that influenced the employee's selection such as:

• Maternity suspension on health and safety grounds.
• Taking or requesting maternity leave or benefits.

Unfair dismissal would be valid if the procedure before the dismissal did not follow a fair selection process.

An employee dismissed during pregnancy must receive a written summary of the reasons for dismissal. The same is true of an employee dismissed during maternity leave. 

They must have this provided; they do not need to request it.

Redundancy payments for staff on maternity leave

When considering redundancy, while staff are pregnant, maternity pay needs addressing. You may wonder if there are any changes to statutory maternity pay after redundancy.

If an employee becomes redundant during maternity leave, the maternity leave period comes to an end. This applies to both ordinary and additional maternity leave.

The employee will have an entitlement to redundancy pay as if they were not on maternity leave. Also, to any remaining statutory maternity pay.

They may also have entitlement to payment during her notice period.

With contractual maternity pay and redundancy, any contractual pay would end when the contract does. This applies unless there is an agreement stating otherwise. 

Redundancy pay calculations should reflect the employee’s usual salary. It should not reflect reduced maternity rates.

This is true regardless of whether you usually provide contractual or statutory maternity pay (SMP).

Redundant before maternity leave starts

Redundancies are not intended as a way of avoiding the provision of family leave rights to those about to take maternity leave. 

You should remember that the law does offer protection in this regard.

If a pregnant employee qualifies for statutory maternity pay and becomes redundant before going on maternity leave (but after the beginning of the 15th week before the baby is due), you will need to pay the statutory maternity pay (SMP) as well as any redundancy payment.

Redundancy after maternity leave—employee entitlements

Currently, those on maternity leave who are at risk of redundancy must receive offers for suitable alternative roles. This is in advance of others not on maternity leave. This protection ends once the employee returns to work.

Following a consultation, the government has confirmed redundancy protection for new parents will receive an extension. 

Future changes will mean this protection starts from the date the employee informs her employers that she's pregnant.

This applies whether verbally or in writing. It will last for a further six-month period once the employee returns to work.

The extended protection will also be available to those on adoption leave and shared parental leave. However, further guidance is due for future release. This will detail how this works due to the differences in the shared parental leave scheme.

Details of such are available here. 

Need our help?

If you have questions about pregnant employees or those on maternity, and dismissals, get in touch for expert guidance by calling 0800 028 2420.