Enhanced redundancy protection for pregnant employees and new parents: Overview for employers
Author: Claire Birkinshaw
The Government is pressing ahead with plans to extend the period during which pregnant employees and new parents are entitled to be offered any suitable alternative vacancy if they are being made redundant. We look at how the law will change and the headaches that the amendments could cause for employers.
Enhanced redundancy protection: key documents
On 22 July 2019, the Government published its response to the public consultation on pregnancy and maternity discrimination, which ran from 25 January to 5 April 2019.
The Government's response confirms that it intends to legislate to extend redundancy protection for both pregnant employees and new parents returning from certain types of family-friendly leave.
1. What is the background?
Government research published in 2016 demonstrates that pregnancy and maternity discrimination is still prevalent. Three in four mothers said that they had a negative or possibly discriminatory experience during pregnancy or maternity leave, or on their return from maternity leave.
In addition, evidence received by the House of Commons Women and Equalities Select Committee (WESC) in its 2016 pregnancy and maternity discrimination inquiry found that, once new mothers returned from maternity leave, some were being forced out of work.
The WESC's report, published in August 2016 following its inquiry, included a recommendation that the Government implement a system similar to that used in Germany. Under the German system, expectant and new mothers can be made redundant only in specified circumstances. The WESC suggested that this additional protection should apply throughout pregnancy and maternity leave, and for six months from the end of maternity leave.
In looking to address these pregnancy and maternity discrimination issues, the Government published its consultation in January 2019. The consultation invited views on ways of achieving additional protection from redundancy for those returning from maternity and other forms of family-friendly leave, and creating a more consistent approach to pregnant employees and those on maternity leave.
2. What is the current legal position?
Regulation 10 of the Maternity and Parental Leave etc Regulations 1999 (SI 1999/3312) provides that an employee who is placed at risk of redundancy during their maternity leave is entitled to be offered a suitable alternative vacancy with their employer, its successor or an associated employer, ahead of other employees who are also at risk of redundancy.
The new contract should take effect immediately on the termination of the employee's employment under their previous contract. The work to be done under the new contract should be of a kind that is both suitable and appropriate for the employee in the circumstances. In addition, the provisions in the new contract relating to role, place of work and the other terms and conditions of employment must not be substantially less favourable to the employee than if they had continued to be employed under their previous contract.
Similar provisions exist in relation to adoption leave (reg.23 of the Paternity and Adoption Leave Regulations 2002 (SI 2002/2788)) and shared parental leave (reg.39 of the Shared Parental Leave Regulations 2014 (SI 2014/3050)).
A failure to offer an available suitable alternative vacancy renders the employee's subsequent redundancy dismissal automatically unfair.
These statutory provisions do not mean that an employee on maternity, adoption or shared parental leave cannot be fairly selected for redundancy or made redundant. Rather, where they are selected for redundancy, they have an absolute right to be offered any available suitable alternative vacancy, without having to apply for it and usually without being required to undertake a competitive assessment/interview process. It is irrelevant that other employees who have also been selected for redundancy may be better qualified for the vacancy.
If there is only one suitable alternative vacancy available and more than one employee on maternity, adoption or shared parental leave, the employer will need to select fairly the successful employee for the vacancy by undertaking an assessment/interview process. There is no priority order here between maternity, adoption and shared parental leave.
3. Pregnancy and maternity leave: what are the proposals?
The right to be offered a suitable alternative vacancy on redundancy currently applies only to employees who are absent on maternity, adoption or shared parental leave during the redundancy process. In relation to pregnancy and maternity leave, the Government is to change the law to extend this redundancy protection period:
- so that it applies from the point at which an employee informs their employer that they are pregnant, whether this is done orally or in writing; and
- for six months following the end of maternity leave - this period is expected to start immediately after maternity leave finishes, even if the mother does not immediately return to work because they are taking another form of leave at that point.
4. Adoption leave or shared parental leave: what are the proposals?
The Government also intends to extend the redundancy protection period:
Over three quarters of respondents to the consultation agreed that the redundancy protection currently provided when someone is on maternity leave should be extended into a period of return to work. Responses were also generally positive on the benefits for both individuals and employers.
When considering what would be adequate for a "return to work" period for redundancy protection purposes, nearly three quarters of respondents felt that six months was appropriate. When answering the question about when redundancy protection should start, over two-thirds of respondents agreed that this should be from the point when an employee informs her employer.
- for six months following the end of adoption leave, to start immediately after adoption leave ends;
- into a period of return to work for those taking shared parental leave.
Shared parental leave is more flexible than other family-friendly leave. It can be taken for very short periods and in a number of different blocks of discontinuous leave, which means that a standard period of protection on return to work is not appropriate.
The Government has yet to determine exactly how the extended redundancy protection period will work for shared parental leave and has said that it intends to work with stakeholders on developing the design of this protection. In doing so, it will take into account that:
- its key objective is to protect pregnant employees and new mothers from discrimination;
- the practical and legal differences between shared parental leave and maternity leave mean that it will require a different approach;
- the period of extended protection should be proportionate to the amount of leave and the threat of discrimination;
- a mother should be no worse off if they curtail their maternity leave and then take a period of shared parental leave; and
- the solution should not create any disincentives to take shared parental leave.
The Government has made clear that it does not consider it to be proportionate for a father returning from one week's shared parental leave to be in the same position as a mother returning from one year's maternity leave.
5. What potential changes did not make it through?
No additional protection will apply to those taking or returning from paternity leave.
The Government has concluded that paternity leave does not justify equal treatment to maternity leave when it comes to redundancy protection. This is because the purpose of the extended period of protection is to ensure that employers do not make an early judgement on performance in the first few months of an employee returning to work after a long absence. This would not be the case for an employee returning from a short period of paternity leave.
Although not explicitly confirmed in the Government's response, it would appear that no additional protection will apply to those taking or returning from short periods of ordinary (unpaid) parental leave.
As mentioned above, the WESC recommended in its August 2016 report that the Government implement a system similar to the one used in Germany, under which expectant and new mothers can be made redundant only in specified circumstances. The Government did not even consult on this much more radical proposal.
6. Will employers have to amend their redundancy procedures?
When the proposed legislation is implemented, employers will need to update their redundancy policies to the extent that they explicitly cover the right for those on maternity, adoption or shared parental leave to be offered any suitable alternative vacancy on redundancy.
HR professionals and managers implementing a redundancy process will also need to ensure that they take account of the extended redundancy protection period where any employees at risk of redundancy are pregnant or have recently returned to work from maternity, adoption or shared parental leave.
7. What are the potential problem areas for employers?
When implemented, the changes in relation to maternity leave will double the current period of redundancy protection from one year to around two years, assuming the pregnant employee advises the employer of their pregnancy at about the 12-week point and takes one year's maternity leave.
In turn, this could potentially double the number of employees who must be given priority for any suitable alternative vacancy on redundancy, particularly in female-dominated workplaces, making assessments/interviews for any vacancy much more likely.
The changes may also result in the loss of more employees to redundancy in circumstances where they may well be better qualified for the vacancy than the protected employees, and this will require careful management and communication.
In addition, there are possible evidential issues around pregnant employees being able to provide informal oral notification of pregnancy to qualify for the extended redundancy protection. Managers will need to keep suitable records of such conversations and ensure that the information is passed on, as necessary and at the appropriate time, to those responsible for implementing redundancy processes.
The Government's response to the consultation is silent on the position in relation to miscarriages. An employee who has a miscarriage in the first 24 weeks of pregnancy has no entitlement to maternity leave. Therefore, it will need to be clarified if their redundancy protection period ends immediately on the end of their pregnancy, or if they are to be granted an extended period of protection. For the purposes of a pregnancy and maternity discrimination claim under the Equality Act 2010, where a pregnant employee does not have the right to maternity leave, the "protected period" ends two weeks after the end of the pregnancy. It is possible that the Government may apply this same additional two weeks to the redundancy protection period.
Finally, although it is not yet known how the extended redundancy protection will work in relation to those returning from shared parental leave, the overall effect may be to complicate further what is already a very complex shared parental leave scheme.
8. What happens next?
The Government has not committed to any particular timetable for changing the current laws. It has simply said that it will look to bring forward legislation "when parliamentary time allows".
However, given that it still needs to develop a workable solution for shared parental leave, and it is unlikely that the required legislative changes will be implemented on a piecemeal basis, this may take some time. There is also the remote possibility that the new administration, led by the new Prime Minister, may decide not to proceed, either at all or in full, with these changes.
In the meantime, the Government has said that it will establish a taskforce of employer and family representative groups. The taskforce will make recommendations on what improvements can be made to the information available to employers and families on pregnancy and maternity discrimination.
The taskforce will also develop an action plan on what steps the Government and other organisations can take to make it easier for pregnant employees and new mothers to stay in work.