Planning redundancies: Top tips for dealing with employees on maternity leave

Planning redundancies is always difficult and sensitive. You will of course be aware that employees on maternity leave are entitled to extra protection throughout any redundancy or restructuring process but, amidst the upheaval and conflicting demands of organisational change, it can be tricky to make sure that this happens in practice.

In our experience, employers striving to treat employees on maternity leave fairly often struggle with the mechanics of adapting criteria and selection processes appropriately while ensuring fairness to other affected employees. Our top tips should help you strike the right balance and reduce the risk of claims for unfair dismissal, pregnancy and maternity discrimination and sex discrimination.

If you need more detailed advice or support with a pending redundancy process we would be happy to advise you.

Dealing with employees on maternity leave during a redundancy process

1. Dispel myths about maternity leave

As a starting point remember that it will be automatically unfair to select an employee for redundancy for a maternity-related reason. An employee does not need to have the usual two years of qualifying service to bring such a complaint. However, it is a common misconception that an employee on maternity leave cannot be made redundant. As long as there is a genuine redundancy situation and you have followed a fair procedure (subject to the special legal protections that apply to employees on maternity leave) you are entitled to make an employee redundant even while they are absent from work.

2. Include absent employees from the outset

When carrying out redundancy exercise it is important not to forget about employees on maternity leave. As far as possible, they should be given information about the proposed redundancies in the same way and at the same time as other employees and should be included in the consultation process. If you are concerned about disturbing an employee’s leave, it may help to establish the least intrusive and least stressful method of keeping in touch or to offer alternative arrangements for consultation (for example, holding meetings at the employee’s home or via a Skype link). Excluding an employee on maternity leave from the consultation process is likely to make any dismissal unfair and discriminatory.

3. Make sure selection criteria don’t discriminate

When carrying out a redundancy selection exercise it is fundamentally important to use selection criteria that are as objective as possible and to apply them fairly. Carefully consider whether any of your chosen criteria might indirectly discriminate against employees on maternity leave. For example, if you are scoring an employee’s attendance record, discount any absences for pregnancy related reasons. If one of your criteria is length of service, make sure you count any periods of maternity leave. If you are looking at performance against relevant KPIs, it may make sense to assess an employee on maternity leave over a longer period (or to assess all employees over a longer period to level the playing field). If you are concerned about whether your selection criteria will stand up to scrutiny we would be happy to help you.

4. Mitigate any unfairness – but not too much!

While you must ensure that an employee on maternity leave is not disadvantaged in the redundancy process, you should not do more than is reasonably necessary to achieve this, where this might prejudice the position of other employees at risk of redundancy. It is important to balance the need to be fair to all affected employees. For example, if an employee on maternity leave is given an artificially high or maximum score against one or more selection criteria, this may disadvantage colleagues who have been scored more accurately. An employee on maternity leave can in some ways be treated more favourably than other employees. However, this must be a “proportionate means of achieving a legitimate aim” and should go no further than is needed to mitigate the disadvantage caused by an employee’s leave. 

5. Consider alternative work

An employee who is on maternity leave who has been selected for redundancy has the right to be offered a suitable alternative vacancy. The employee should be given first refusal of the vacancy, even if she is not the strongest or most suitable candidate for the role. Remember that this right extends also to employees on adoption leave and shared parental leave. This is one of the rare employment situations where positive discrimination is allowed. For a vacancy to be “suitable” it must be no worse than the employee’s previous position in terms of location, terms and conditions and status, and the content of the role must be suited to the employee’s skills and abilities. Childcare arrangements and travelling time may often be important considerations for maternity returners.

6. Prioritise properly

The priority right to a suitable alternative vacancy arises when the employee has been selected for redundancy (not simply when a redundancy situation arises in the workplace). It can be very difficult to pinpoint exactly when this entitlement ‘kicks in’.

This will be most straight forward where an employee’s own role is being deleted. For example, in Sefton Borough Council v Wainwright, two posts (including the Claimant’s) were being deleted to create a single combined role. The EAT held that as soon as it became apparent that the Claimant’s role would no longer be available for her to do (in this case, as soon as a redundancy situation was announced) she was entitled to be offered the newly created role (which, on the facts of the case was a suitable alternative vacancy).

Things may be trickier where an employee on maternity leave is part of a redundancy pool. In those circumstances, it may be necessary to carry out the redundancy selection exercise first. The employee’s priority right to a suitable alternative vacancy arguably only kicks in when it is established that the employee has been unsuccessful in securing a position.

If you are unsure of the best way forward in this nuanced and complex situation seek legal advice at an early stage.

7. Balance competing claims with care

If an employee on maternity has priority access to a suitable alternative vacancy, what should you do if more than one affected employee is on maternity leave at the relevant time? If you find yourself in this tricky position, seeking a volunteer for redundancy may solve the problem (although take care that employees on maternity leave are not ‘singled out’ for any such offer). If not, you will need to consider whether the available vacancy is genuinely suitable for all the affected employees on maternity leave, or in fact only for one of them. If the position is equally suitable for all of them, you will need to design a fair selection process.

8. Remember your obligations on termination

If you do make an employee on maternity leave redundant, it is important to be aware of their entitlements on termination. Most importantly, if an employee is entitled to statutory maternity pay (SMP) at the time of dismissal, they should continue to receive it for the whole of the SMP period. The employee will also be entitled to redundancy pay as if they were not on maternity leave; therefore the calculation should be based on pay for the employee’s normal working hours, excluding any periods of maternity pay or nil pay. An employee on maternity leave may also, in some limited circumstances, be entitled to full notice pay. Seek legal advice if you are unsure.