Redundancy protection to be extended to cover pregnancy and return from family leave

Under the current law, those on maternity leave, shared parental leave or adoption leave have special protection in a redundancy situation. They have the right to be offered a suitable alternative vacancy, if one is available, before being made redundant. This gives employees on these types of leave priority access to redeployment opportunities over other redundant employees.

The Protection from Redundancy (Pregnancy and Family Leave) Act 2023 extends the priority status to pregnant employees and those who have recently returned from maternity leave and shared parental leave. However, it requires further regulations from the government setting out precisely how the entitlement will work. The regulations are not expected to come into force before April 2024.

Who will be protected?

Aside from those already protected, currently those on maternity leave, the Act extends protection to:

• A pregnant employee who is in “a protected period of pregnancy”;

• An employee who has recently suffered a miscarriage;

• Maternity returners;

• Adoption leave returners; and

• Shared parental leave returners.

The Act provides very limited information on the details of the protection, not even stating the length of protection to be given or how a “protected period” of pregnancy will be calculated.

However, from the consultation and previous government press releases, the length of protection is almost certain to be six months for those returning from maternity and adoption leave. Meanwhile, a “protected period” of pregnancy is likely to commence once an employee informs her employer of her pregnancy. However, a new provision also provides for the protected period to begin after the end of the pregnancy. The explanatory notes for the Bill explain that this is to cover miscarriages that have taken place before an employer was even aware of the pregnancy. This is to allow the employee to receive the protection she would have otherwise been entitled to. We will need to wait and see whether this does appear in the regulations and how the “protected period”’ will be defined. Currently, the law only recognises miscarriages that take place after 24 weeks as this is when an entitlement to maternity leave arises.

Employers will also need to wait for the regulations to see what length of protection is given to those who have taken shared parental leave. The consultation response accepts that it does not make sense to give a new parent six months’ redundancy protection after taking just a week of SPL, but there will be some kind of protection that is proportionate to the threat of discrimination. Another complicating factor pointed out in the consultation is that a mother should be no worse off if she curtails her maternity leave and then takes a period of SPL.

Employees taking paternity leave are not offered any redundancy protection on the basis that the new law is to ensure that employers do not make an early judgment on performance in the first few months of someone returning to work after a long absence. That would not be the case with paternity leave.

Key implications for employers

There is nothing for employers to action at the moment as we await the regulations setting out the detail of how the new protections will operate. However, employers will want to think through the implications of the new protections and the issues that may arise.

New and expectant mothers will be able to double their period of redundancy protection to a period of about two years (assuming they tell their employer about their pregnancy at 12 weeks, take a year of maternity leave, and are then protected for six months afterwards).

In our response to the consultation, we pointed out this could cause a practical headache for employers when running a redundancy exercise, particularly in a female-dominated workforce where there may be many employees who must be given priority for suitable alternative vacancies. In addition, women may feel under pressure to inform their employer about their pregnancy very early on (before their 12-week scan, for example) if there is an impending redundancy exercise.

Although partners and fathers taking SPL are already protected, the extension of protection to cover the period of return from SPL could also mean employers having to get increasingly used to men having these priority rights.

Whilst we await the regulations to spell out the consequences of failing to offer a protected employee a suitable alternative vacancy, it is likely that the regulations will state that a failure to do so will mean the employee has a claim for an automatic unfair dismissal. This would mirror the current law entitling employees on maternity leave priority status for redeployment opportunities.

From a policy perspective, there are strong arguments in favour of protecting new and expectant parents from discrimination and avoiding them having to compete for redeployment opportunities at a vulnerable time. There are nonetheless likely to be individual instances where the rules will feel unfair to managers and employees on the ground, such as where it results in the loss of a particularly high-performing employee in favour of an employee with priority status. This will need to be managed carefully.

More generally, employers will need to adopt systems for identifying potentially suitable vacancies across their operations, including any other companies in their group of companies. This may prove challenging, especially since the Covid-19 pandemic has demonstrated the potential for many roles to be worked on a remote basis, which widens the scope of potentially suitable roles considerably.