February 3rd, 2015 / Insight posted in Blog

Redundancy whilst on maternity leave: a tricky question for employers

Linda Powell

This case examines how the right of women on maternity leave are to be offered a suitable alternative vacancy in a redundancy situation, which can be a thorny issue for employees.

Where a woman is on maternity leave and a redundancy situation arises, the woman has a right to be offered a suitable alternative vacancy under the Maternity and Parental Leave Regulations 1999. Failure to comply with regulation 10 renders a dismissal automatically unfair. Section 18 of the Equality Act 2010 (EqA 2010) makes it unlawful for an employer to discriminate on grounds of pregnancy or maternity. This gives the employee on maternity leave priority over other employees who are also at risk of redundancy and is a rare example of lawful positive discrimination. If the employer does not comply with this requirement, the employee will have a claim for automatically unfair dismissal.

As part of a restructuring exercise, the employer decided that two jobs, including the employee’s job, would be replaced in its structure by new position. The maternity leaver and the other “at risk” employee were both interviewed for the new position. The other “at risk” employee rather than the maternity leaver was found to be more suitable for the position and was offered the new position. There were no other vacancies offered to the maternity leaver and she was subsequently redundant. The maternity leaver claimed automatically unfair dismissal because the employer had failed to comply with its duty to offer her the newly created job. It was argued by the employee that regulation 10 was an absolute right: if a suitable vacancy existed, it should be offered and it was not for the employer to assess the employee’s suitability for it through a competitive interview process.

In this case, the redundancy situation arose as part of a restructuring exercise. In contrast where a redundancy exercise involves a reduction in headcount or the number of employees doing particular type of work, without any change in the terms and conditions of employment, there is no right to be given preference in the selection exercise and the right to be offered a suitable vacancy is unlike to arise until the employer has carried out a selection exercise. The case was appealed because the employee whilst being made redundant whilst on maternity leave, it was not because of her being on maternity leave

It was accepted by the employer that the employee was entitled to advantageous treatment, but only once she was formally put in the redeployment pool. Relying on a previously decided case the Council stated that it would go beyond what was reasonably necessary and would inflict injustice on her male colleague to offer her a vacancy at an earlier stage. The EAT rejected the Council’s arguments in their entirety and noted that it would undermine the purpose of regulation 10 if the employer was free to wait until after a restructure had been completed before offering the woman a vacancy. It was not sustainable to argue that the particular role was not a vacancy simply because it was only open to a limited pool. The Council was seeking to define its idea of what a vacancy was “through the prism of its chosen way of proceeding”.

It is clear that being on maternity leave, and regulation 10 in particular, does not offer a woman immunity against being considered for redundancy. A man might complain of sex discrimination if a woman was not put in the pool along with him simply because she was on maternity leave. However, in a restructure situation, this will often amount to the same thing. In this case, the employee’s right to be offered the only vacancy in the proposed new structure effectively amounted to taking her out of the redundancy pool altogether.

This case was perhaps unusual in that the restructure seemed to be something of a fait accompli, the newly-created role having been created prior to and in anticipation of the redundancy. In many cases there may well be a gap between the proposal to carry out a restructure and the creation of suitable alternative vacancies.