As part of the evolving landscape of UK employment law, 2024 brings forth a series of new family-friendly rights, including the Protection from Redundancy (Pregnancy and Family Leave) Act 2023, which brings extended redundancy protection for employees during significant life events such as maternity, adoption, or shared parental leave. These changes, coupled with new rights for carers to unpaid time off and alterations to statutory paternity leave, mark a crucial step towards fostering a more inclusive and supportive work environment.
This article aims to shed light on the expanded redundancy protection, offering insights and actionable advice for employers. Here, we focus on understanding the implications of these changes and provide tips on how to best prepare your business. If you would like further clarity on how, as an employer, you need to adapt your practices then our team of highly experienced employment law solicitors are available to help.
Contents:
Recap on the position pre-6 April 2024
What protection did employees on maternity, adoption or shared parental leave have in a redundancy situation?
Employees on maternity, adoption or shared parental leave have special protection in a redundancy situation. Where a redundancy situation arises in your business and an employee on maternity, adoption or shared parental leave is at risk of having their employment terminated on redundancy grounds, you must offer that employee a suitable alternative vacancy (if one exists) before terminating their employment.
Importantly, the employee on maternity, adoption or shared parental leave has priority in relation to the suitable alternative vacancy over other employees who are also at risk of redundancy. This is known as having ‘priority status’ in redundancy situations. It is a significant right under UK employment laws because it gives protected employees preferential treatment for suitable alternative vacancies.
What is a suitable alternative vacancy?
In general, this means a role that:
- Is suitable in relation to the employee and appropriate for them to do in the circumstances.
- Is not substantially less favourable to the employee than their current role in terms of the capacity and place the employee would be employed and other terms and conditions of their employment.
For example, you may wish to consider an employee in an Account Manager role for a Customer Success Manager role if one is available and reasonably satisfies the above criteria. These are not always easy decisions to make, and you may want to check your strategy with a legal expert before you proceed.
When should you offer suitable alternative vacancies to protected employees?
Employees only benefit from the priority status redundancy protection when their role has been confirmed as being at risk of redundancy. You should not offer suitable alternative vacancies to protected employees at any earlier stage (eg when applying selection criteria and scoring employees) as that could run the risk of discrimination claims from non-protected employees.
If there are no suitable alternative vacancies available, then you do not need to offer one to the protected employee. However, you should try to make proactive efforts to identify other potential vacancies in your organisation, for example referring employees to internal job sites, discussing alternative roles with team leaders or adjacent functions and fairly considering any applications the employee makes for alternative roles within your business. There is no requirement to create a special role for the employee.
What is changing and when?
The priority status redundancy protection provided to employees on maternity, adoption or shared parental leave will shortly be extended to:
- Pregnant women. If you have pregnant employees in your business that qualify for statutory maternity leave (SML), they will benefit from the priority status redundancy protection from the moment they disclose their pregnancy to you, all the way up to the end of the day on which they start SML.
- Employees returning from maternity, adoption and shared parental leave.Employees will benefit from an additional period of redundancy protection for 18 months after the expected week of childbirth or placement for adoption. Where an employee is taking six or more consecutive weeks of shared parental leave, and they haven’t taken maternity or adoption leave, they will also be protected for 18 months after the expected week of childbirth or placement for adoption.
The extended protections apply to any pregnancy disclosed to you on or after 6 April 2024, periods of maternity or adoption leave that end on or after 6 April 2024 and to a period of six weeks of shared parental leave that starts on or after 6 April 2024.
What is significant about these changes?
- More extensive protections. These changes introduce significantly enhanced protections for pregnant employees and employees returning from maternity, adoption and shared parental leave. Previously, employees only had priority status redundancy protection during their period of maternity, adoption or shared parental leave. Pregnant employees in particular will have a very extensive period of protection. Assuming they notify you of their pregnancy 12 weeks before their due date, they will have nearly two years of protection running from the date they disclose their pregnancy to 18 months after their expected week of childbirth meaning their protection will extend for a period after their return from maternity leave following the birth of their child.
- Increase in scope of protected employees. The changes increase the scope of employees who benefit from priority status in a redundancy situation. In addition to pregnant employees, the changes mean that employees returning from different types of time off rights, including men on shared parental leave, will benefit from extended protection.
- Complexity in redundancy planning. Planning redundancies and team restructures is likely to require more detailed analysis by your HR teams. They will need to identify whether an employee is protected at the time of the proposed redundancy or restructure, which will include checking the date an employee’s protected period began, when it ends and whether the redundancy or restructure takes place within the protected period. Internal systems for flagging protected periods are likely to help when it comes to redundancy and restructure planning. Additional complexity may arise due to the increase in scope of protected employees - it’s possible that multiple employees with priority status would need to compete for a single vacancy. For these reasons, HR teams should build additional time for planning and analysis into a redundancy or restructure project.
What are the legal risks for failing to offer priority status?
If you don’t offer priority status to a protected employee and you subsequently make them redundant, you risk legal claims for automatic unfair dismissal and potentially discrimination. These can be costly claims because there is no cap on the compensation that can be awarded. Employees can also bring these claims from day one of their employment as there is no minimum length of service required. It’s therefore important to review all employees at risk of redundancy closely and proactively offer suitable alternative vacancies to employees with priority status where these exist.
What steps can you take to prepare for these changes?
- Review any upcoming redundancies and restructures. If you’re planning any redundancies or restructures and these are due to take place on or after 6 April 2024, you will need to identify which employees may be protected under the new rules. It’s not clear whether employees are protected where they, for example, notify you of their pregnancy between now and 6 April 2024. If you have any redundancies or restructures that are ongoing and believe there may be protected employees, we encourage you to seek advice from our employment team.
- Build internal systems for logging leave. To simplify redundancy and restructure planning, it will be helpful to develop a system that logs the specific type of leave the employee has taken, whether or not it is a protected period of leave and the start and return dates.
- Train leaders and managers. Awareness training about the priority status right will be invaluable for those involved in redundancies and restructures. HR teams will need to be familiar with how priority status works in redundancy situations. Business leaders will also need to be aware of the right since they may be faced with a situation in which they prefer a non-protected employee over a protected employee in a redundancy situation.
If you’re planning HR and management training sessions within your business, our employment team can support you with this. We also offer a fixed fee HR Compliance Audit, which can be a useful starting point to help identify any missing or out-of-date policies and documents and to ensure your business is compliant with the latest employment legislation.
