Can we make an employee redundant during maternity leave or offer changed terms on her return to work?
Employees on maternity leave have special protections which employers should be aware of as they make key workforce decisions in the coming months.
Employers are currently making very difficult decisions about their workforces in the light of tightening Covid-19 restrictions and the change in Government support for employment costs from 1 November. It is vital that employers are aware of the particular protections which apply to those employees who are currently on maternity leave where changes may be made to their terms and conditions or where redundancy is proposed.
Consultation during maternity leave
It is very important to ensure that employees on maternity leave are included in any consultation process and given the opportunity to contribute to that process. Aside from the risks of an unfair dismissal claim due to an unfair process, a failure to consult a woman on maternity leave could also be unfavourable treatment because of pregnancy or maternity and give rise to a discrimination claim. At present, it may be reasonable to agree to remote consultation meetings. Please see our previous article, How should we consult with employees during covid-19? for further detail (here).
Does an employee on maternity leave have the right to return to the same job on the same terms?
If the employee returns after 26 weeks' leave or less
An employee who takes only ordinary maternity leave (OML), who returns before the end of OML, or who combines maternity leave with a period of shared parental leave where the total leave is 26 weeks or less is entitled to return to the same job in which she was employed before her absence. Her terms of employment must be the same as, or not less favourable than, they would have been had she not been absent, unless a redundancy situation has arisen.
This protection also applies where an employee has taken a period of parental leave of four weeks or less.
If the employee has taken more than 26 weeks leave
There are different rules where the period of leave is more than 26 weeks; that is where the employee has taken any period of additional maternity leave (AML), has taken shared parental leave which when combined with maternity leave amounts to more than 26 weeks, or has taken a period of at least four weeks' parental leave on top of OML. In this case, if it is not reasonably practicable for the employer to permit her to return to the same job, she is entitled to return to a different job which is both suitable for her and appropriate in the circumstances. The terms and conditions of that job must not be less favourable than they would have been had she not been absent.
This protection also applies where an employee has taken a period of parental leave of more than four weeks.
Employers who are proposing to alter terms and conditions of employment on the employee’s return from maternity leave should ensure that they can show that the change to terms would have taken place regardless of the maternity leave. If employers are seeking to change the terms of a number of employees (including some who are not on maternity leave), and there are clear business reasons for the proposed change, it is likely that employers would be able to show that the change would have happened in any event.
The risks are higher where the employee returning from maternity leave is the only employee whose terms are changing. In that case, the employee might argue that the change in terms is discriminatory and an unlawful detriment because of pregnancy or maternity.
Can we move an employee returning from maternity leave onto the new Job Support Scheme?
Making use of the Job Support Scheme (JSS) to subsidise employment costs entails a change to contractual terms (a reduction in hours and probably also a reduction in pay and benefits). Employers will need to seek an employee’s agreement to these changes if they are planning to make applications under the JSS and this agreement should be recorded in writing.
As set out above, there will be a risk of claims where an employee could argue that they have been asked to accept less favourable terms of employment because they have taken maternity or parental leave. Employers who can show that the offer of reduced hours and pay would have happened regardless of the employee’s absence will be able to defend such claims. It is therefore very important to have a strong business case for the use of the JSS and the offer of changed terms which is unconnected to any maternity or parental leave.
Please note that we are awaiting full guidance on the Job Support Scheme, including how it will interact with maternity and other types of leave.
What if there is a redundancy situation during maternity leave?
Acas has published useful guidance on managing redundancy for employees who are pregnant or on maternity leave.
If a redundancy situation arises during an employee's maternity leave and “it is not practicable by reason of redundancy” for the employer to continue to employ her under her existing contract, the employee is entitled to be offered a suitable alternative vacancy (where one is available) to start immediately after her existing contract ends.
This does not mean that an employee on maternity leave should not be included in a redundancy pooling and selection process. Case law indicates that protecting a woman from such redundancy selection could give rise to sex discrimination claims from men who are included in the selection process.
However, the protection will be triggered once the employee on maternity leave is provisionally selected for redundancy following a selection process. This will also be the case where the employee on maternity leave is effectively in a “pool of one” because no-one else carries out the same work, or where there the role being carried out by this employee is deleted in a restructure. Only at that point will it not be practicable by reason of redundancy for the employer to continue to employ her under her existing contract. And so it is at that point that the employer must offer her any suitable alternative vacancy in priority to other employees. The employee must not be asked to go through a further selection process or interview for the role (although an employer may need to use a fair process to decide between employees where more than one of those at risk of redundancy is on maternity leave and the role is suitable for each of them).
Confusion can sometimes arise where an employer is proposing to reduce the number of people carrying out the same role and one of those is on maternity leave. Employers sometimes believe it is safer to keep the employee on maternity leave out of the selection process. However, in this case, the employer should carry out a fair selection procedure including the employee on maternity leave. If the employee on maternity leave is provisionally selected for redundancy from the pool, the employer should then consider if there are any suitable alternative roles for her. This will not include any of the pooled roles as those will be taken by the employees who scored more highly in the selection and they will not be vacant.
Employer should of course ensure that the selection criteria used in a redundancy selection exercise are fair and non-discriminatory. Any pregnancy or maternity-related absence should not be counted when considering absence records. Any performance-related criteria should also account for the impact of any periods of absence due to pregnancy and maternity on an employee’s performance.
If a suitable alternative vacancy exists but is not offered to the employee on maternity leave, she will have a claim for automatically unfair dismissal.
It should be noted that this entitlement applies to any suitable alternative vacancy within the employer organisation itself, within any successor organisation (where there has been a change in the legal ownership of the undertaking in which the employee was employed), or within an associated employer (such as a group company).
What is a suitable alternative vacancy?
A suitable alternative vacancy is a role where the work to be done is both suitable and appropriate for the employee to do in the circumstances and where the capacity and place in which she is to be employed, and the other terms and conditions of her employment, are not substantially less favourable to her than if the employee had continued to be employed in her old job.
There are risks for employers is assuming that a role will not be suitable for a particular employee and there is an argument that it is safer for employers to offer the role where there is doubt about suitability. For example, if a role exists at a location some distance from the employee’s current place of work but on the same terms and conditions, it would be advisable to make the offer. All employees who are at risk of redundancy and are offered an alternative role have the right to a statutory four-week trial period.
If an employee refuses an offer of a suitable alternative role, her dismissal for redundancy is likely to be fair. If that refusal is unreasonable in the circumstances, the employee will also lose the right to a statutory redundancy payment.
Key points for employers
- Ensure that those on maternity leave are included in selection procedures where these are carried out.
- Once the employee on maternity leave is at risk of redundancy, consider if there any suitable alternative roles.
- If so, make the offer of a suitable alternative role in writing.
Entitlement to SMP will continue after dismissal
Where an employee who has qualified for Statutory Maternity Pay (SMP) is dismissed, her right to SMP will continue as it is not dependent on employment continuing. Employers should therefore factor in this continuing payment when proposing dismissals during maternity leave.
Proposed extension to redundancy protections for those on maternity leave
At present the right to be offered a suitable alternative role applies only while the employee is on maternity leave. The Government is however intending to extend the period of protection so that it starts from the date the employee informs her employer in writing that she is pregnant to a date six months after the end of maternity leave. These proposals are expected to be included in a new Employment Bill which will be brought forward when parliamentary time allows.
If you would like to discuss any aspect of this article further, please contact Alacoque Marvin or any other member of the Employment team on 0113 244 6100.
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The information in this article is necessarily of a general nature. Specific advice should be sought for specific situations. If you have any queries or need any legal advice please feel free to contact Wrigleys Solicitors.