Redundancy and Maternity
It is unfair dismissal and sex discrimination to select a woman for redundancy because she is pregnant or on maternity leave.
Unfortunately CAB continues to receive evidence of women being dismissed and selected for redundancy on the basis of pregnancy or maternity leave. There are often issues about whether a redundancy is a genuine redundancy. A dismissal will be a redundancy if the employer's business, or part of the business, has ceased to operate or the employer's business has moved to a different place or the business' need for work of a particular type to be done has ceased or diminished. If it is not a genuine redundancy situation and the woman has been dismissed on the grounds of pregnancy or maternity leave then this will be unfair dismissal and sex discrimination.
If the employee is on maternity leave, she must be offered suitable alternative employment if there is a suitable available vacancy, or she will automatically be considered unfairly dismissed, regardless of how long she has worked for the employer. She may also be able to claim sex discrimination. If no suitable alternative vacancy exists a woman will receive redundancy pay if she has worked for her employer for at least two years.
The employer should use fair selection criteria when deciding who will be made redundant, for example, skills, abilities, disciplinary records, time keeping. Selection criteria should be agreed before anyone is made redundant and should be fairly applied. The employer should give as much warning as possible about redundancies and a woman on maternity leave has the right to be individually consulted about these.
A woman who is going to be made redundant and is pregnant can still qualify for Statutory Maternity Pay (SMP) if she has worked for the same employer for at least 26 weeks by the end of the qualifying week (which is the 15th week before the week in which the baby is due) and is still in the job in the qualifying week and has average weekly earnings of at least the national insurance lower earnings limit. She will not get SMP if she is made redundant and stops being employed before the qualifying week but she may be able to claim Maternity Allowance. If she is made redundant and stops being employed after the qualifying week but before she starts maternity leave she is still entitled to SMP. A woman is entitled to receive SMP for up to 39 weeks even if the redundancy takes effect during the SMP period. If the employer is insolvent or refuses to pay all or part of SMP HMRC will become liable for any outstanding SMP. Rights to contractual maternity pay normally end when the contract ends and a woman may lose her rights to contractual pay from the date of the redundancy and continue to receive SMP for the remaining weeks.
A woman who is pregnant or on maternity leave and who has worked for her employer for at least two years is entitled to a statutory redundancy payment if she is made redundant. A woman may be entitled to additional contractual redundancy payments and this will be detailed in her contract of employment. Statutory redundancy pay should be calculated using a normal week’s pay or average week’s pay received before the maternity leave period started. It should not be based on SMP or contractual maternity pay. If a woman qualifies for SMP she will get it in addition to redundancy pay.
A woman who is pregnant or on maternity leave is entitled to a paid notice period if she has been in the job for at least one month. The amount will depend on the contract of employment but if nothing is mentioned she will be entitled to receive paid statutory notice which is one week’s notice for each year of continuous employment up to a maximum of 12 years. SMP can be offset against notice pay so that an employer, if making someone redundant during maternity leave, will pay SMP and make it up to normal pay for the notice period, rather than having to pay SMP and normal notice pay.
Redundancy is a complex issue and advice should always be sought. Further information is available from your local CAB or from the Labour Relations Agency on 028 9032 1442.