Employers embarking on redundancy or restructuring exercises need to be aware of significant changes from 6 April 2024 to UK redundancy rules which give priority protection to employees on maternity, adoption and shared parental leave (SPL). The changes from 6 April mean that the period of priority protection will extend to 18 months and will also apply to pregnant employees from the day they notify their employer of their pregnancy. This is important because a failure to give priority protection can result in a redundancy dismissal being both automatically unfair and deemed discriminatory.
This blog explains the upcoming changes and considers issues arising and how employers can manage the impact. It also looks at the practical issues arising from a larger number of employees being given priority status.
What is happening?
Under current rules, employees on maternity, adoption or shared parental leave who are selected for redundancy are entitled to be offered a suitable alternative vacancy, if one is available, giving them priority protection against dismissal. The changes extend the period of time to which that priority is in place.
What are the new periods of protection from 6 April 2024?
When protection starts and ends depends on the circumstances, summarised in the table below:
When do the changes take effect?
6 April 2024 (although the amending legislation is (at the time of publication) still in draft form).
Priority protection during pregnancy applies where an employee notifies their employer of pregnancy on or after 6 April 2024. In a maternity, adoption or SPL situation, the new rules apply where the statutory period of leave ends on or after 6 April 2024.
What if the employee notified the employer of their pregnancy before 6 April 2024?
On a literal interpretation of the regulations, employees in this position will not be in a priority position during their pregnancy and will be protected under the new rules from the start of their maternity leave. However, it is not clear whether employees who re-inform their employer of pregnancy on or after 6 April 2024 will be protected for the remainder of their pregnancy, or whether someone who has notified their employer of pregnancy before 6 April 2024, and who remains pregnant on that date, has by implication notified them on or after 6 April 2024 as well.
What does ‘informed of the pregnancy’ mean for the start of protection?
There is no prescribed form for notification of pregnancy, and it does not need to be in writing. An employer is able to ask for notification in writing that the baby has been born.
An employer could consider having specific pregnancy notification requirements, or at least ensure they have a process for ensuring that verbal notifications of pregnancy are centrally recorded. However, employers who fail to provide priority where their own internal requirements or processes are not followed are unlikely to be absolved from liability.
Employers should be alive to the extension of priority protection into pregnancy leading to employees informing them of pregnancy at an earlier stage than they might otherwise have done (e.g. before a 12-week scan), triggering other pregnancy related obligations for employers.
Does this mean an employer cannot make someone redundant if they are in a protected position?
No. The legislation does not prevent pregnant employees or those on or returning from maternity, adoption or SPL being selected for redundancy or being made redundant. It gives them priority over any suitable alternative vacancies, if any exist. If they are selected for redundancy and no suitable alternative vacancies exist, the priority protection is never engaged, and their employment will come to an end.
What is a ‘suitable alternative vacancy’?
From an objective perspective, a vacancy will be suitable alternative employment if the employee meets the requirements for the job and has the appropriate skill and experience sought, and where the terms of the position are commensurate to their previous role. Factors such as status, responsibility, pay, hours, place of work will be relevant when comparing the alternative employment to their previous role.
It is also worth noting that the vacancy does not need to be confirmed to the employee’s immediate employer – suitable alterative vacancies with an associated employer are also covered.
What if someone without priority is a better candidate for the vacancy?
This is irrelevant. If the vacancy is a suitable alternative for an employee in a priority position, they must be offered that position ahead of anyone else, even if someone else is more qualified or experienced for the role.
What if more than one person has priority for a vacancy?
Unfortunately, there is nothing in the legislation, nor any other legal guidance, on how employers navigate this tricky situation. In this vacuum, best practice would be to select for the role from the pool of priority protected employees using fair and objective selection criteria.
A careful analysis of whether a vacancy is genuinely ‘suitable’ may help reduce or remove any priority candidates in some circumstances, but risks employees with priority arguing that a particular role was in fact suitable for them. Employers should keep a clear record of any rationale to justify why a role was not deemed ‘suitable’.
It is possible that not all of the employees in a priority position want to be considered for a suitable alternative vacancy, preferring instead to be made redundant. It may help employers to be open to accepting volunteers for redundancy, or otherwise be flexible about employees refusing suitable alternative employment (which ordinarily would deprive them of a redundancy payment if that refusal was unreasonable).
What if an employer gets this wrong?
Employees with priority protection who are not offered a suitable alternative position may have a claim for automatically unfair dismissal (and pregnant employees or those on maternity leave, a claim of sex discrimination). While the employee should have received a redundancy payment which would be set-off against any award of compensation for unfair dismissal, additional compensation may be payable.
Employers may also face claims of detriment by employees on maternity, adoption and SPL and/or of discrimination (particularly on grounds of sex, pregnancy and maternity) in the way that the approach to priority is handled.
Top practical tips for employers
- Have a robust system in place so that at any given point it is easy to identify which employees have priority protection, and the dates when that starts and ends, to limit inadvertently falling foul of obligations. Establishing those dates may not always be straight forward or known straight away.
- Be prepared for earlier notification of pregnancy, and potentially an uptick in employees taking SPL.
- Ensure managers as well as HR are aware of the changes and what they mean – the fact that some employees have priority status for alterative vacancies can seem unfair to some so increasing their awareness of the rules can help with management of any redundancy scenarios within their teams.
- Introduce guidelines for helping to consistently assess whether a vacancy is a ‘suitable’ alternative.
- Consider issues of alternative roles and priority from the outset of redundancy planning.
The legislation
The Protection from Redundancy (Pregnancy and Family Leave) Act 2023 and associated (currently draft) Maternity Leave, Adoption Leave and Shared Parental Leave (Amendment) Regulations 2024 amend the Employment Rights Act 1996, Maternity and Parental Leave Regulations 1999, Paternity and Adoption Leave Regulations 2002 and Shared Parental Leave Regulations 2014 to extend the period of protection that employees on maternity, adoption or shared parental leave receive in a redundancy situation.