It’s a regular concern for businesses, but if you must make redundancies and an employee is on maternity leave, it can prove daunting.
However, it may be an essential requirement during the coronavirus pandemic—or if your business faces a genuine need to dismiss employees.
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?
However, the relationship between maternity and redundancy can be complex. An employee on maternity leave has certain special protections that you need to be aware of.
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
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.
Where there’s a suitable available vacancy, an employee being made redundant on maternity leave has entitlement to alternative employment with you before the end of her employment under her 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, her 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:
- Work to be done is appropriate.
- Capacity and place in which she is to be employed, and the other terms and conditions, are not substantially less favourable than those applying under her previous contract.
A woman will also be regarded as unfairly dismissed, regardless of length of service, if she’s selected for redundancy in preference to other employees holding positions similar to hers.
That’s where the circumstances constituting the redundancy applied equally to those other employees.
And the reason for her selection was connected with:
- Maternity suspension on health and safety grounds.
- Taking or requesting maternity leave or benefits.
An employee dismissed during pregnancy or maternity leave is entitled to a written summary of the reasons for dismissal without having to request it.
Redundancy payments for staff on maternity leave
With 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 is made redundant during ordinary or additional maternity leave, her maternity leave period comes to an end.
She’ll have entitlement to redundancy pay as if she were not on maternity leave and also to any remaining statutory maternity pay. She may also be entitled to be paid during her notice period.
Regarding contractual maternity pay and redundancy, any contractual pay would end when the contract does, unless you agree otherwise.
Regardless of whether you usually provide contractual or statutory maternity pay (SMP), redundancy pay calculations should be based of the employee’s usual salary and not reduced maternity rates.
Redundant before maternity leave starts
Redundancies should not be used 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 is made redundant before going on maternity leave but after the beginning of the 15th week before the baby is due, you will need to pay her statutory maternity pay (SMP) as well as any redundancy payment.
Redundancy after maternity leave—employee entitlements
As outlined above, currently those on maternity leave who are at risk of redundancy must be offered suitable alternative roles in advance of others. 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, whether verbally or in writing, and 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, although further guidance will be released on how this works due to the differences in the shared parental leave scheme.
There’s no confirmation for when the changes will take effect.
Need our help?
If you have questions about pregnant employees, or those on maternity, and dismissals, get in touch for expert guidance: 0800 028 2420.