Redundancy on Maternity Leave

Carol Smith

Carol Smith

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03 Jul 2020

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Handling the redundancy process if you have an employee who’s pregnant (or on maternity leave) is a difficult undertaking.

You must make sure you can justify your reasons for taking this action.

However, if it’s essential due to the coronavirus pandemic (or for other legitimate reasons), then you must follow the correct process. You can call us on 01455 858 132 for assistance.

Or you can read this guide, which takes you through the necessary steps to remain compliant with UK employment laws.

Advice on UK employment law and maternity redundancy

So, can you make someone redundant while they’re on maternity leave? Are people on maternity protected from redundancy? Yes, you can—and these employees do have some extra protection.

However, you must be able to justify your reason for dismissing an employee.  

You’ll need a genuine explanation for needing to dismiss members of staff. For example, if the coronavirus pandemic leaves you with no other choice.

You must remember that your employees have redundancy rights when on maternity leave. These include:

  • A fair process.
  • Consideration for other vacancies within your business.
  • Fair employee selection and scoring criteria.
  • If chosen for dismissal, they must receive the correct amount of pay (which we explain further below).

Carefully handling redundancy on maternity leave in the correct way is essential, otherwise you may receive a claim for unfair dismissal or discrimination.

And that could result in an employment tribunal.

This is also true of an employee facing redundancy while pregnant. You must follow the same thorough, fair procedure.

Employees may even ask, “Can you be made redundant on maternity leave?” And, yes, they can. You’re able to make an employee redundant, but only if the reason for doing so is fair.

But does maternity leave count toward redundancy? No. You can’t make an employee redundant due to their pregnancy—or for being away from work.

However, this hasn’t stopped some businesses. There are cases where women have returned to work to find themselves demoted. Or forced into new roles without warning.

Other women have reported going to ‘keeping-in-touch’ days only to receive a notice for dismissal. One new mother working for an FTSE-listed business had pressure to sign a non-disclosure agreement to keep the case out of court.

So, it’s still worryingly common to see an employee made redundant on maternity leave.

But businesses that treat new mothers unfairly are taking a huge risk. Employment tribunals can result in major fines.

And there are new redundancy after maternity leave entitlements and regulations for staff. In July 2019, pregnant women and new parents received enhanced protections.

New mothers returning to work now have six months of additional protection, where you can’t dismiss them.

This provides the employee in question with extra support during those important months.

Female employees receive this protection from the point she informs you she’s pregnant until six months after returning to work.

So, it’s essential to approach redundancy and maternity leave carefully so the process is fair and not discriminatory.

How to manage redundancy during maternity leave

During your process, you’ll have to consider which employee to dismiss. Remember, you’ll need to provide your reasons for needing to dismiss staff.

Businesses use a selection criteria to choose employees. This typically involves a scoring system to mark each individual on their:

  • Skills.
  • Qualifications. 
  • Qualifty of work. 
  • Disciplinary record.

If you determine an employee is on maternity leave who meets your criteria, you must update them as soon as possible.

And holding a consultation (usually two) with them will give you time to explain your reasoning to the employee.

It’s important to show to this person you have taken all reasonable actions to find alternative employment for them in your business.

And that the selection process was fair. Upon request, or otherwise, you can show them the scoring system in use. And the score of the individual.

The employee has the right to appeal this decision. And if they feel aggrieved, they can make a claim for unfair dismissal.

This is why it’s important to document your process thoroughly. As you may need to prove you’re making redundancies due to a genuine need.

And that you didn’t put employees forward as they were on a period of leave due to the birth of their child.

An overview of voluntary redundancy during maternity leave

This process is the same as normal, with all the usual processes and legal requirements you have to take, but you’re offering a chance for staff to put themselves forward for dismissal.

At which point you can allow employees to volunteer—for redundancy or early retirement.

You can provide incentives for employees to make this option more attractive. Financial gain is a typical example.

It may be an attractive proposition for some employees (such as those nearing retirement age anyway), so don’t be surprised if they want to put themselves forward for consideration.

Businesses will often offer a higher severance package for those who volunteer themselves.

Ultimately, you must only offer this option to staff. You can’t force any of them to take it—the decision is up to them.

And once an employee volunteers, this doesn’t mean they’ll definitely face redundancy. You may want to keep them on if, for example, they’re essential to your workforce.

So, you’ll follow the standard redundancy process to make a decision.

If an employee on leave decides to take this option, their dismissal will be due to redundancy. And they’ll receive the payment you calculate.

So, it’s a normal process. And the termination comes into effect after the notice period. Or with a payment in lieu of notice (PILON).

An overview of redundancy and maternity pay in the UK

Does maternity leave affect redundancy pay? No, it’ll remain the same for the employee. You can calculate their statutory pay on the basis of their normal weekly wage.

Or the average week of pay they receive—that’s before their leave began.

So, that means you should base the amount on the statutory maternity pay (SMP) or their contractual maternity pay.

If an employee is facing dismissal while on leave, contractual maternity pay and redundancy will stop.

The staff member will lose their pay from the time of the dismissal. And they’ll receive their SMP for the remaining weeks that are applicable.

If there’s redundancy before maternity leave starts

In the event you need to dismiss your employee prior to their leave starting, you’ll still need to pay the individual statutory maternity pay (SMP).

And the redundancy payment along with the above. But you’ll receive funds back to cover for the SMP from the UK government.

Expert advice

In need of further support? Call us to speak with employment law experts—we can guide you through your process, or after alternative routes: 01455 858 132.

About the Author

Carol Smith

Carol joined Croner in 2001 as an Employment Consultant advising a wide range of clients on all aspects of Employment Law and HR practice. She demonstrates particular expertise in complex disciplinary, grievance matters and reorganisation / redundancy.

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Carol Smith

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