Redundancy During Maternity Leave

Recently we have been advising on a reorganisation at a client’s workplace. The client is proposing to offer enhanced terms to volunteers. One of the employees is on maternity leave. The employee in question is being informed of the changes and involved in the consultation. The general rule is that if an employee’s position is made redundant during her period of maternity leave, she is entitled to be offered a suitable alternative vacancy, where one is available. The new contract must be offered before the end of the original contract and it must take effect immediately on the ending of the original contract.

To be suitable, the work to be done by the employee is both suitable and appropriate for her to do in the circumstances and the terms and conditions of her employment should not be substantially less favourable to her than if she had continued to be employed under the original contract.

A woman on maternity leave has certain privileges in these circumstances. She should be offered any suitable alternative roles before other employees and does not have to attend interviews or selection procedures. If you do offer the employee a suitable alternative vacancy and she unreasonably refuses it, she may forfeit her right to a redundancy payment.

The employee must be consulted where there is a potential redundancy situation and a fair procedure (taking into account any applicable statutory dispute resolution procedure) must be followed, notwithstanding the employee’s absence on maternity leave.

My client’s employee on maternity leave has expressed an interest in the voluntary redundancy. If she takes voluntary redundancy when will the termination of employment take effect?

If she does decide to take voluntary redundancy, she will be dismissed by reason of redundancy and will receive redundancy payment in the normal way. The termination takes effect at the end of the notice period or immediately with a payment in lieu of notice.

Any time spent by the employee on maternity leave should be counted as continuous service when assessing her length of service for the purpose of calculating her statutory redundancy payment.

She will be entitled to be given notice if she has been in her job for at least one month. The notice period will depend on the contract of employment, though it the contract of employment provides for notice of at least a week more than the statutory minimum notice period, the statutory provisions do not apply.

An employee is entitled to receive contractual notice pay during pregnancy and may be entitled to receive it during maternity leave, depending on the terms of the contract. It may be unlawful to refuse to pay notice pay during a woman’s paid maternity leave (i.e. the 39 week SMP period) and possibly throughout maternity leave. You may offset any payments of SMP against statutory notice pay. She will also be entitled to be paid any outstanding holiday pay.

An employee who has qualified for SMP should continue to be paid SMP for the full 39 week period even if she is made redundant at an earlier stage. In practical terms this means you can make an employee redundant and pay her the severance pay and notice pay. Independently of this, where she qualifies and is in the maternity pay period, she will continue to receive her SMP.

If you need help with redundancy, give us a call.

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