New law will give pregnant women and new parents greater protection against redundancy
Market Insight 13 July 2023 13 July 2023
UK & Europe
Employment, Pensions & Immigration
We look at this new right and what it means for employers.
An estimated 30% of mothers surveyed in April 2021 felt that they had been discriminated against by an employer according to one survey.1 Another survey found that around 54,000 new mothers may be forced out of their work in the United Kingdom each year.2
While these are staggering figures, 84% of employers believe that supporting pregnant workers and those on maternity or shared parental leave is in the interests of their organisations.
The Protection from Redundancy (Pregnancy and Family Leave) Act 2023 (the 2023 Act), aims to address some of these concerns by seeking to enhance redundancy protection for pregnant workers and working parents returning to the workplace after family related leave. The 2023 Act comes into force on 24 July 2023 but we still await new regulations which are needed to bring the proposals into effect.
What legal entitlements do employees have currently?
Currently, women on maternity leave and employees on adoption leave or shared parental leave (SPL) have priority over other employees who are also at risk of redundancy (this is a rare form of lawful positive discrimination). So where a redundancy situation arises during a woman’s maternity leave (or during an employee’s SPL or adoption leave), they have the right to be offered a suitable alternative vacancy where there is one available.3 This includes a vacancy with an associated employer (such as another group company). Failure to comply with these rules could lead to a claim for automatic unfair dismissal. But where the employee unreasonably refuses a suitable alternative offer, the employee’s dismissal is likely to be fair (provided all other requirements have been followed) and the employee will lose their statutory redundancy payment.
Other pregnancy, maternity and family leave protections are also enshrined in law, including under the Equality Act 2010, which makes it unlawful for a person to discriminate by treating woman unfavourably because of pregnancy or maternity, as well as in other regards, for example, by treating her less favourably because of her sex or sexual orientation. Currently pregnancy and maternity protection under the Equality Act runs from the start of pregnancy until the end of maternity leave or when the woman returns to work after the pregnancy, if earlier.
Adoption leave is not a protected characteristic under the Equality Act, but employees taking adoption leave have the right not to be subjected to any detriment for certain reasons related to their leave. In addition, a dismissal is automatically unfair where the reason or principal reason relates to their adoption leave. Similar protection applies in relation to employees who take other forms of leave such as paternity leave and shared parental leave.
What will new parents be entitled to under the new law?
The 2023 Act empowers the Secretary of State through regulations to extend the period over which redundancy protection is available.
It is widely expected that the regulations will extend the protection currently only available during maternity leave, so that it begins from when an individual tells their employer they are pregnant and ends 18 months after the birth.4 Equivalent protections are also expected to be extended to parents returning from adoption leave and SPL (but not paternity leave). There has been some debate over how long the protection should be after returning from SPL. During the parliamentary debates on the Bill, Kevin Hollinrake, Parliamentary Under Secretary of State at the Department for Business and Trade, said that the government is working with the Pregnancy and Maternity Discrimination Advisory Board in advance of settlement on the precise details of the regulations.5 The debates also indicate that there have been discussions around having a qualifying period, whereby a new parent must take six consecutive weeks of family leave to be entitled to the redundancy protections.
Significantly, the protection may also apply post miscarriage since the new Act gives power to the Secretary of State to start calculating the period of protection from the end of pregnancy.
What does this mean for employers?
Not only does this mean that those returning from family leave are to be given first refusal to alternative employment opportunities, but that they will be protected for a longer period of time. The government believes that this will help shield new parents and expectant mothers from workplace discrimination, offering them greater job security at an important time in their lives.
Employers having to make redundancies should take great care to ensure that all those who are pregnant or on maternity, adoption or SPL, or who have returned from such leave for the period set out in the forthcoming regulations, are given first refusal of any suitable alternative vacancies. Failure to do this could result in a redundancy dismissal being automatically unfair and lead to a potential claim of discrimination. Compensation awarded for such claims is not capped.
In practice, employers should take particular care when tracking employees on leave so that the identity of all those benefiting from this special redundancy protection is clear. It’s important to remember that the right to be prioritised for a suitable vacancy only arises once the employee has been selected for redundancy. Protected employees should not be excluded from the selection process itself as this runs the risk of discriminating against other employees in the selection pool.
It is vital that the employer can demonstrate that a suitable offer of alternative employment was actually made to the protected employee where such vacancy exists. Merely inviting an employee to apply for a job is insufficient. If an employee fails to apply for the vacancy, and is made redundant, the employee will still be entitled to their redundancy payment and may have a claim for automatic unfair dismissal.
Larger employers may face difficulties where there are several protected employees at any one time but insufficient vacancies for all of them. Which employee should be prioritised? The problem may be solved by considering whether the alternative role in question is suitable for all of the protected employees. It could be that the alternative role is suitable in respect of only some of the protected employees. Otherwise, the employer could seek volunteers for redundancy. If this doesn’t work, there would need to be a competitive selection process involving the protected employees.
In practice, for employers, with the effect of the 2023 Act unlikely to manifest itself until sometime in 2024, employers should nevertheless plan to update their various family leave policies and redundancy procedures. HR and managers may also benefit from training in the event of a potential redundancy situation.
If you have any questions or are considering introducing a Family Leave policy or updating the redundancy procedures in your organisation, please get in touch.
3Regulation 10 of the Maternity and Paternity Leave Regulations 1999
4The government’s press release when announcing the Bill in October 2022 said that “The policy intention is that new Regulations will apply the MAPLE protections through an expanded period covering from when a woman tells her employer she is pregnant until 18 months after the birth. The 18-month window ensures that a mother returning from a year of maternity leave can receive 6 months additional redundancy protection. The 18-month window will also apply to Maternity Leave and Shared Parental Leave.