Redundancy during or after maternity leave: how the law is failing women
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Louise Heath
Description: Employment
Laurene Veale analyses why the current law is still failing to protect new and expectant mothers from unfair redundancy dismissal, an issue brought into sharp focus by the continuing fallout from the pandemic.
As the economic effects of the pandemic persist, 2021 is fast becoming the year of redundancies. There is a real risk that women will be hit hardest, undoing years of progress on gender equality in the workplace. Why women in particular? The gender pay gap statistics show that on average women have jobs with lower levels of management responsibility than men and are over-represented in part-time work. These kind of jobs are often first in line for redundancies. Women are also most vulnerable to redundancy when they choose to have children.
Protection from redundancy during pregnancy or maternity leave is virtually non-existent for workers without the status of ‘employee’, yet women are more likely than men to be in precarious employment. The rise of atypical employment arrangements means that an increasing proportion of working women are left out of the legal protections afforded to new and expectant mothers. But even for women with the lucky status of employee, the law protecting new and expectant mothers from redundancy is not fit for purpose.
Unfair selection for redundancy
In a context of economic uncertainty, many employers prefer to lay off an employee rather than pay her maternity pay. Employment Rights Act 1996 (ERA) s99 provides that a dismissal is unfair if the employer uses the pretext of redundancy to dismiss an employee for reasons related to her pregnancy, childbirth, maternity or maternity leave. However, the current economic climate makes it particularly hard to argue that the redundancy was a sham. The employer might cloak the woman’s selection for redundancy with seemingly objective selection criteria – performance, experience or technical knowledge, for example. It will be argued that she scored the lowest in a fair and objective selection exercise.
The potential for unfair disadvantage is significant when an employer decides to compare the performance, experience or technical knowledge of an employee who has been on maternity leave for between six months and a year with that of other employees. That is so even when an employer steers clear of blatantly discriminatory criteria (like attendance records that don’t discount pregnancy- and maternity-related absence). One of my clients was on maternity leave when a large restructuring exercise took place at the company. On her return, a criterion in the redundancy exercise was familiarity with the company’s new structure. She scored the lowest and was made redundant.
Redundancy selection based on an employee’s performance before her maternity leave can also be discriminatory. A woman might start her maternity leave just a few weeks before she is due to give birth. That means she has worked for most of her pregnancy and in particular during its first term, which for many women is the most difficult one. Her performance may be affected by recurring morning sickness, fatigue and other physical symptoms of pregnancy. Yet during this difficult time, women are usually held to the same standard of performance, motivation and – apart from statutory time off work for antenatal appointments – attendance. To avoid discrimination, an employer should score the employee based on performance before her pregnancy, but that could be one or two years previously, perhaps when she did not have much experience at the company, held a different role, or when the workplace or performance targets were different.
Other selection criteria in redundancy processes, especially in non-manual jobs, can be particularly slippery for expectant or new mothers. ‘Teamwork’ or ‘relationship building’ can disadvantage a woman who’s been away for a long period, or who chose not to attend work socials during pregnancy because they so often involve drinking. Not to mention managers having conscious or unconscious prejudices that women with children are less committed to their careers.
‘Managing without’ an employee on maternity leave
Maternity and Parental Leave etc Regulations 1999 SI No 3312 (MAPLE Regs) reg 20(2) provides that where an employee is selected for redundancy for a reason ‘related to’ pregnancy or maternity, among employees in similar roles, then her dismissal is automatically unfair. This would appear to cover women who are selected for redundancy for performance or other defects in their work related to pregnancy or maternity absence.
But as too many women will know, the protection is too narrow. Reg 20(2) only applies if other employees in a ‘similar’ job also faced redundancy but were not dismissed. Take the common example of a woman whose role is distributed among several team members during her maternity leave. In the current economic recession, many employers will choose to cut costs by making their workforce simply manage without her rather than hire maternity cover. What often happens is that other team members increase their workload to absorb hers and, on her return, her role is no longer needed. Her redundancy is connected with her maternity leave, but reg 20(2) does not protect her, because no other employee in a ‘similar’ role faces redundancy – if anything her colleagues have become more needed than before. This reeks of discrimination, but the fact is that she is redundant, they are not. Reg 20(2) is therefore useless to women whose job has been ‘spread out’ during their absence.
Pregnancy discrimination
Another struggle faces women who do not inform their employer of their pregnancy. Many avoid breaking the news until they have to give notice of their maternity leave because of a justified fear of discrimination – for example, missing out on a long-term project because of anticipated maternity absence, or falling off the radar for training, promotion or development opportunities because such incentives are rarely offered to someone who is about to go on maternity leave.
Even without having announced her pregnancy, an employee can be unfairly selected for redundancy because of a dip in her performance as a result of the physical symptoms of her pregnancy. That would appear to be redundancy selection because of a reason ‘related to’ her pregnancy, prohibited by ERA s99. Disappointingly, the case law currently requires that an employer knew or believed that the employee was pregnant before an ERA s99 claim can succeed (Ramdoolar v Bycity Ltd UKEAT/0236/04/DM; [2005] ICR 368, EAT).
Likewise, Equality Act 2010 (EqA) s18, which prohibits the unfavourable treatment of a worker during her pregnancy ‘because of’ her pregnancy or ‘illness suffered by her as a result of it’, also requires the employer’s actual knowledge of the pregnancy. This creates significant difficulty for pregnant women who do not want to announce their pregnancy until they have to.
A woman could claim indirect sex discrimination (there is no indirect pregnancy discrimination in the statute, but any pregnancy-related discrimination not covered by EqA s18 can, thanks to European human rights case law, be pleaded as sex discrimination), but indirect discrimination is justifiable. An employer may successfully argue that performance-based or other objective redundancy criteria are justified, even if they do put new or expectant mothers at a disadvantage. For example, in 2021 a travel agency struggling to survive as a result of the pandemic might justify a redundancy exercise that scored an employee the lowest because she had the least ‘client rapport’ in the last three years, in circumstances where she was on maternity leave in 2019 and then on furlough in 2020.
Missing out on suitable alternative jobs
MAPLE Regs reg 10 (in conjunction with reg 20(1)(b)) gives an employee at risk of redundancy during her maternity leave the right to be offered, before other employees, a suitable alternative vacancy if one is available. A suitable vacancy is a role either at the employer or at an ‘associated employer’, involving work which is of a kind that is suitable and appropriate for her to do and which does not have terms and conditions substantially less favourable than her previous job. If the employer does not offer this vacancy and makes her redundant, she can claim unfair dismissal. The same right to ‘jump the queue’ for vacancies applies to employees on adoption leave or shared parental leave (reg 20(1)(b) in conjunction with ERA 1996 s99(3)).
However, in practice, the protection only goes so far. Although the requirement is that the employer actively searches for suitable alternatives – even those that cost more – many employers underestimate their duty to carry out an adequate search. For example, they may fail to look for vacancies at associated employers (parent or sister companies, other branches etc) or to consider improving the terms and conditions of a vacancy so that it becomes suitable for the employee.
Precisely because she is on maternity leave, a new mother will rarely be in a position to know whether her employer’s search for suitable vacancies was thorough or whether a vacancy exists that the employer has not mentioned. She may also have insufficient information to argue that a new role could be created or an existing one modified to make it suitable for her.
The MAPLE Regs make it astonishingly easy to deny a woman the intended protection. Reg 10 only applies when the dismissal ends an employee’s maternity leave (ordinary or additional maternity leave). The employer need only wait a few days from her return and she loses her protection from redundancy. Yet the redundancy of an employee who took maternity leave often only becomes evident after her return, when – within days, weeks or months – it becomes clear that many of her tasks have simply gone or been absorbed by someone else.
The furlough scheme adds another layer of difficulty. During this pandemic, many employees were immediately furloughed upon returning from maternity leave. It was only after their furlough that they were made redundant – but by then they had no extra protection, because their maternity leave had ended. This scenario will only become more common when the government’s furlough scheme ends.
In 2016, the House of Commons Women and Equalities Committee proposed to extend redundancy protection beyond a woman’s return from maternity leave.1Pregnancy and maternity discrimination. First report of session 2016–17, HC 90, 31 August 2016. After a consultation in 2019, Theresa May’s government committed to extending this protection for six months from a new mother’s return to work.2Good work plan: pregnancy and maternity discrimination consultation: government response, Department for Business, Energy & Industrial Strategy, July 2019. Almost two years later, the law remains unchanged. The Women and Equalities Committee had to introduce a private members’ bill, the Pregnancy and Maternity (Redundancy Protection) Bill, on 8 July 2020 under the Ten Minute Rule to revive the proposal. The bill is still waiting for a date for its second reading.
Much more is needed, however. Maternity Action calls reg 10 ‘woefully inadequate’ and I agree. The law protecting women from redundancy dismissal for maternity-related reasons is too blunt. It does not sufficiently address the subtle reasons why women who choose to have children are so often at a disadvantage in a redundancy exercise. Without legal reform in this area, women will continue to be held back in the workplace.
Ten suggestions for more earnest reform to protect women
1Extend pregnancy and maternity protection to those who do not have the status of employees. With the rise of atypical employment, the law must recognise that women in precarious jobs are the most in need of protection.
2Remove the requirement (which is not in statute, but in the case law) that an employer must have known or believed that an employee was pregnant as an essential ingredient to an ERA s99 claim and an EqA s18 claim. If a dismissal was, on the facts, related to a woman’s pregnancy, she ought to be able to claim unfair dismissal and discrimination without having to show that her employer knew of her pregnancy.
3Remove the unnecessary requirement in MAPLE Regs reg 20(2) that other employees in ‘similar’ jobs also be at risk of redundancy for the maternity protection to apply. This would address the problem identified nine years ago in SG Petch Ltd v English-Stewart UKEAT/0213/12/JOJ of employers discovering that they can ‘manage without’ an employee on maternity leave.
4Removing the time limit on the prohibition in EqA s18(2) of unfavourable treatment because of pregnancy or a pregnancy-related illness. The law currently limits this protection to a ‘protected period’ starting with the woman’s pregnancy and ending when she returns to work or the end of additional maternity leave (whichever is earlier). Removing this time limit would protect a woman selected for redundancy after her return to work, but because of a low score in a redundancy exercise that is affected by her pregnancy or a pregnancy-related illness.
5Create a requirement that employers hire a maternity replacement, except when there is good reason not to. This would tackle the heart of the problem: the extreme vulnerability to redundancy of an employee who must spend so much time away from work in order to have a child.
6Expressly list pregnancy and maternity as a protected characteristic within EqA s19 (which prohibits indirect discrimination). This would reflect the case law and ensure legal clarity and transparency. Workers and employers ought to be capable of knowing that indirect pregnancy/maternity discrimination is unlawful without having to read European human rights case law to know that it is covered by indirect sex discrimination. This will also help workers refer to indirect discrimination when challenging seemingly fair but indirectly discriminatory redundancy selection criteria.
7Make ‘keep in touch’ days during maternity leave a statutory right. If a woman on maternity leave wants the chance to keep in the loop at work, she should not be denied it. This is a simple and mutually beneficial way to prevent women who have children from being isolated during leave and disadvantaged on their return.
8Extend equal pay law to allow a woman who has been on maternity leave to compare her salary and other work benefits with women who have not taken maternity leave. Currently, equal pay only allows a comparator of a different sex. Yet many women find that they earn less than their female counterparts simply because they chose to have a child.
9Extend paternity leave and entirely overhaul shared parental leave (which has a take-up rate of just two per cent) so that men take on their fair share of post-birth childcare. The reasons why this is urgently needed are neatly summarised by the TUC.
10Extend eligibility to free or subsidised childcare. Childcare in the UK is the second most expensive in the world. In line with the public sector equality duty (EqA s149), local authorities, with government funding, must extend eligibility and accessibility of free childcare, which is widely recognised as a long-term solution to gender inequality.
 
2     Good work plan: pregnancy and maternity discrimination consultation: government response, Department for Business, Energy & Industrial Strategy, July 2019. »

About the author(s)

Description: Laurene Veale - author
Laurene Veale is a barrister at Cloisters specialising in employment and discrimination law.