How is redundancy pay calculated if the employee is in receipt of statutory maternity pay when they are made redundant?
If an employee on maternity leave has worked for their employer for at least two years, they will be entitled to statutory redundancy pay. The effect of reg.22 of the Maternity and Parental Leave etc Regulations 1999 (SI 1999/3312) is that the statutory redundancy pay must be based on the employee's normal weekly pay or average weekly pay prior to the start of their maternity leave. It should not be based on their statutory maternity pay (SMP) or contractual maternity pay. The position is the same if the employee has exhausted their entitlement to SMP; their redundancy pay should be based on their normal weekly pay prior to the maternity leave.
The employer should take the same approach in respect of the calculation of a contractual redundancy payment. If it is calculated on the employee's lower rate of maternity pay, it may constitute an unlawful detriment under the Employment Rights Act 1996 and also pregnancy and maternity discrimination under the Equality Act 2010.