CAN AN EMPLOYER REALLY MAKE A PERSON REDUNDANT WHILST ON MATERNITY LEAVE?
We are often asked by Channel Island employers embarking on a redundancy or restructuring process whether they have an obligation to offer an alternative role to an employee who is on maternity leave. There is an understandable assumption by many that an employee who is pregnant or on maternity leave cannot be selected for redundancy for fear of being discriminatory. But, as the UK's Employment Appeal Tribunal has just confirmed, that assumption is not strictly correct.
In Sefton Borough Council v Wainwright, the Tribunal was asked to consider whether the Council was obligated to offer (and give) an alternative role to a woman on maternity, rather than select her for redundancy. Interestingly, the response to this issue was greatly divided but thankfully Judge Eady has provided some much needed clarity.
Mrs W was employed by the Council as head of its Overview and Scrutiny department. A colleague, Mr Pierce, was employed as head of its Member Services department. Both positions were equally graded, held the same level of hierarchical status and carried the same level of remuneration. Faced with having to make budget cuts, the Council embarked on a redundancy process which affected both departments. In an attempt to reduce headcount, the Council decided to combine both departments and create a new Democratic Services department; this created a new role of Democratic Services Manager. Both Mrs W and Mr P were notified that their positions were at risk of redundancy; Mrs W then commenced a period of maternity leave.
The Council acknowledged that both employees were qualified to perform the new role and, indeed, had Mrs W been the only suitable candidate then she would have easily slotted into that position. However, being faced with two suitable candidates the Council had no alternative but to commence a selection process whereby both individuals were interviewed. After consideration of the objective criteria and their performance at interview, the Council decided that Mr P was the better candidate and offered him the new role. Mrs W was notified of the termination of her employment on the grounds of redundancy and required to serve her 3 month notice period.
Not content with the Council's decision, Mrs W issued a claim for unfair dismissal and sex discrimination. She believed that it was unlawful to make an employee redundant while on maternity leave; rather that an employer should be obligated to offer a suitable alternative role and any failure to do so would automatically render the termination as unfair.
Applying this logic to the facts, Mrs W argued that the role of Democratic Services Manager should have been offered to her initially and only if she refused the offer should it then have been offered to Mr P. The Tribunal at first instance agreed. It concluded that there should have been no competition; Mrs W may have simply slotted into that role upon her return from leave. The Council's decision to appoint Mr P rendered her dismissal automatically unfair because of direct discrimination on the grounds of maternity.
The first instance decision resulted in divided opinion. Many commentators felt that simply slotting Mrs W into that new role could have been regarded as an act of discrimination towards Mr P; after all, he was deemed to be the better candidate.
The Council appealed and, to the delight of many commentators, Judge Eady overturned the first instance decision. Following a detailed review of the facts and the initial Tribunal's reasoning, she felt that there was no unlawful treatment towards Mrs W by appointing Mr P in the new role; he was chosen purely because he was the better candidate and performed well at interview. The decision was not because of her maternity; the protected characteristic. The reason was simply that Mr P was the better candidate overall.
In her judgment, Judge Eady made it quite clear that when carrying out a redundancy or restructuring process it is entirely at the employer's discretion how to proceed. There is no legal requirement on an employer to do more than is reasonably necessary and to do so would be disproportionate, and places that employer at risk of unlawfully discriminating against others, i.e. Mr P. The unfavourable treatment suffered by Mrs W in not being selected for the new role just happened to coincide with her maternity; it was not because of it.
In summary, when an employer is faced with a redundancy or restructuring process, it should not be afraid of selecting a pregnant woman or woman on maternity leave if she has been selected against objective verifiable criteria. Providing those protected characteristics are not the deciding factor in her selection, then a reasonable employer may feel safe in the knowledge that its decision to dismiss is not itself discriminatory.
An employer should simply ask itself the question: "what is the reason for selecting the employee for redundancy?" If the answer is simply that she is not the better candidate then according to Judge Eady, this is perfectly fair and reasonable; there is no obligation on that employer to offer her an alternative role.
Although this is an important judgment for UK employers, it is also important that Channel Islanders pay heed. Redundancy has been a topical issue for quite some time and many often wonder whether a woman can be selected for redundancy if she is pregnant or on maternity leave. In short, the answer is "yes" but employers must determine the true reason and make sure that reason is not discriminatory. Guernsey law already prohibits unlawful conduct on the grounds of those protected characteristics and Jersey will follow suit from September 2015. However, if in any doubt, an employer should seek appropriate legal advice before embarking on any decision-making which could prove a costly exercise if the decision is wrong.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.