What do you need to know?
In a recent case before the Southampton Employment Tribunal, beauty company, Liz Earle (based near our Head Office on the Isle of Wight), was found to have discriminated against a former employee because of her pregnancy. The case against the well-known beauty brand was reported widely in the national media as well as in the local press.
The claim was brought by Helen Larkin, who was employed by Liz Earle for 5 years before her employment was terminated on the grounds of redundancy. She was pregnant at the time and given only 2 weeks’ notice of her redundancy. Although she applied for two other jobs within the company (both of which she said were suitable for her skill set) she was not given an interview and her applications were rejected – a decision which she claimed was to do with the fact she was about to go on maternity leave. She argued that the redundancy was rushed through before her maternity leave started so that Liz Earle would not have to observe the special protections afforded to women on maternity leave.
In its defence, Liz Earle denied that the redundancy had anything to do with Mrs Larkin’s pregnancy or maternity. However, the Tribunal found in Mrs Larkin’s favour, awarding her just over £17,000 in compensation for the discrimination she had suffered. Although it issued a statement denying that it had discriminated against Mrs Larkin, Liz Earle admitted that its procedures had fallen short of expectations.
You may have read this case and wondered how such a large, well-known company could have got it so wrong. This is particularly so given the much-publicised government proposals to extend redundancy protection during pregnancy and maternity leave. However, you may also be asking yourself what an employer should be doing in this kind of situation – where the employee at risk of redundancy is pregnant or on maternity leave.
Here we answer some of the common questions that arise in this tricky area.
1. What is the law?
Of course, part of the problem is that the law is quite complicated. Whereas most employers will know that all employees are entitled to 1 year’s maternity leave and will know about the right to statutory maternity pay etc, the rules regarding redundancy and pregnancy/maternity are less familiar.
The key rights that an employee has that are relevant in this situation are:
- The right to bring a claim for automatically unfair dismissal if she is dismissed or selected for redundancy and the reason (or principal reason) is connected to her pregnancy or statutory maternity leave.
- The right to claim automatic unfair dismissal if she is dismissed or selected for redundancy during maternity leave for a reason connected to the fact that she has given birth.
- Protection against being subjected to a detriment for a reason connected to her pregnancy or statutory maternity leave or for a reason connected to the fact that she has given birth.
- The right to return to the same job that she did before her absence, if returning before the end of the first 26 weeks of maternity leave.
- If more than 26 weeks maternity leave is taken, the right to return to the same job or, if this is not reasonably practicable, to a different job which is suitable for her and appropriate and on terms and conditions not less favourable than before.
- The right to be offered a suitable alternative vacancy, in priority over other “at risk” employees, if a redundancy situation arises during an employee’s maternity leave. If the employer does not comply with this requirement, the employee will have a claim for automatic unfair dismissal.
- Protection against unfavourable treatment during the protected period (from the beginning of pregnancy to the end of maternity leave) because of her pregnancy, because of an illness she has suffered as a result of her pregnancy, because she is on maternity leave or because she is exercising or seeking to exercise, or has exercised or sought to exercise, the right to maternity leave.
In addition to the above, even if the reason for dismissal is not connected to the employee’s pregnancy, childbirth or statutory maternity leave, the employee may still have an ordinary claim for unfair dismissal.
2. Can you make a pregnant employee redundant?
Yes, you can BUT only if:
- the decision is not connected – directly or indirectly – to the employee’s pregnancy or her maternity leave;
- it is a genuine redundancy situation; and
- you have carried out a fair selection process and a fair consultation process.
3. What do you mean by “a genuine redundancy situation”?
The statutory definition of “redundancy” covers three types of situation:
- when the business closes down;
- when the employee’s place of work closes down; or
- when there is a reduced requirement for employees to carry out a particular kind of work.
These are the three situations in which a dismissal will be by reason of redundancy, providing of course, that this is the real reason for the dismissal.
4. What is fair selection process and how can we demonstrate we have done this?
In very broad terms, a fair selection process involves, first, identifying which employees are carrying out the work that is reducing or is no longer required. This is called identifying the “pool” of employees from which the selection for redundancy will be made.
When the “pool” is chosen, the next step is to decide on your selection criteria. Here you have to be careful not to choose criteria that could indirectly discriminate against employees. So, for example, using length of absence as a criterion for selection could indirectly discriminate against disabled employees but also pregnant employees if the absence is pregnancy related (e.g. due to morning sickness). Absence on maternity leave also must not be taken into account. You should only use selection criteria that is, as far as it possible, both objective and capable of independent verification – in other words, criteria that are measurable, not based on opinion. Potentially fair selection criteria could include performance and ability and disciplinary records.
Once you have your criteria, you will need to decide how much weight to give each criterion (perhaps some are more important to the business than others) before then scoring the employees in the “pool” against these criteria. Those with the lowest scores will be the employees who you will put at risk of redundancy.
5. What if the pregnant employee or employee on maternity leave is in a “pool” of one?
If the employee is the only one who is carrying out the particular kind of work that is being reduced or that is no longer required, then it is potentially fair to place the employee in a “pool” of one. However, you must think carefully before doing this and consider not just whether there are any employees who carry out the same or similar work, but also:
- whether there are other employees doing similar work at other nearby locations; and
- the extent to which employees’ jobs are interchangeable
Only once you have properly considered these possibilities, should you inform the employee who is pregnant/on maternity leave that she is at risk of redundancy.
6. What is a fair consultation process?
Having identified which employees will be put at risk, you have to follow a fair consultation process which will involve holding individual meetings to discuss the potential redundancy situation, how they scored in the redundancy selection process (if relevant), exploring other job opportunities within the company or the group and considering any proposals that the employee may have as to how redundancy can be avoided.
Where you are considering making 20 or more employees redundant over a period of 90 days or less, you will need to collectively consult with employee representatives and comply with the special rules that apply to collective consultation.
As above, you must make sure that you carry out a full and thorough consultation process with any employee on maternity leave or who is pregnant and you must do this at the same time as you consult with other “at risk” employees.
7. In a redundancy situation, do I have to offer a pregnant employee a suitable alternative vacancy in priority over other employees?
The answer is no – not at the moment. This right is only available to women on maternity leave who are put at risk of redundancy.
Where an employee on maternity leave is at risk of redundancy, she is entitled to be offered any suitable alternative vacancy available in priority over any other “at risk” employee. (It is a rare example of lawful positive discrimination.)
However, during pregnancy, the protection is not the same. Clearly, however, you must follow a fair recruitment and selection process when it comes to deciding who to offer any alternative position to, making sure that your criteria are fair and that your decision making is clear and transparent. A failure to do this could result in a claim for pregnancy discrimination, as in the case brought against Liz Earle.
There are proposals in the pipeline, which will extend the redundancy protection currently given to women on maternity leave to pregnant women and to returning mums. Quite when these proposals will become law, however, is not yet known.
8. Can I refuse to offer a pregnant employee an alternative position if she is about to go on maternity leave?
No. That would be unlawful. If she is the best person for the job then to reject her application or to refuse to consider her for the job simply because she is going on maternity leave, would be discriminatory.
It doesn’t matter whether she intends to take 6 months or 12 months leave – to select an employee for redundancy or to reject her for an alternative job because she intends to take maternity leave will give rise to both a claim of automatic unfair dismissal and a claim of discrimination.
9. While one of our employees has been on maternity leave, we have found out that we don’t really need her job anymore. Can we make her redundant?
This is a really tricky question, but it is not an uncommon situation. A woman goes on maternity leave, her work is shared among her colleagues and, within a few months, the employer concludes that the business is doing fine without her. The dilemma is – would the employer have come to this conclusion if it weren’t for the fact that the employee went on maternity leave? And is this maternity discrimination?
Unsurprisingly this issue has come before the Employment Appeal Tribunals but, equally unsurprisingly, there is still no conclusive answer to this question. We know that you can’t decide whether someone has been discriminated against just by asking “but for” the fact the employee went on maternity leave, would she still have a job – because this doesn’t answer the question as to why the decision was made. The Tribunal must decide, on the evidence, whether the reason for the unfavourable treatment (the decision to dismiss or select for redundancy) was because the employee was on maternity leave or for another non-discriminatory reason – and that is a far more complex question.
Inevitably, it will come down to the particular facts and circumstances of the case and the Employment Tribunal will not take at face value an employer’s claim that the role was redundant – it will scrutinise the situation carefully to determine whether a genuine redundancy situation existed and whether that was the real reason behind the decision to make the employee redundant.
10. What if this situation arises in my business – where can I get more help?
These are only a handful of the type of questions that can come up in what is a wide and complex area of law. We therefore recommend getting advice in all but the most straightforward of cases. At Real Employment Law Advice, we are experienced in assisting employers in redundancy situations – large and small – and advising on parental rights in the workplace and we would be very happy to help you.