The recent case of Ballerino v The Racecourse Association Limited comes as a timely reminder of the importance of taking a properly thought-out approach to making redundancies, particularly when any of those at risk are pregnant or within 18 months of the birth of their child.
What are the current protections for pregnant women and new mothers?
In April this year the right of employees on maternity, shared parental leave or adoption leave (the protected employees) to be offered a suitable alternative vacancy in a redundancy situation was extended to include not just the period of leave itself but also, for birth mothers, the period of pregnancy, and for all those who have taken the leave, a period of time after returning to work (the protected period). This protected period ends 18 months after the child's date of birth or placement for adoption.
Facts of the case
In the Ballerino case, the claimant had been successful in her application for a new part-time role when she was four months pregnant. She worked in the role for four months before taking maternity leave. During that leave her employer undertook a business reorganisation and created a full-time role which absorbed the claimant's duties as well as including additional more strategic duties. The claimant was offered both the opportunity to apply for this role and a draft settlement agreement to bring her employment to an end. When no agreement was reached between the parties, the claimant was dismissed.
The claimant brought a claim for automatic unfair dismissal, and sex and pregnancy or maternity discrimination. She argued that the redundancy was a sham and a device to get rid of her. At first instance the employment tribunal dismissed her claims, accepting the employer's argument that the role had been made redundant, and that the new role was not a suitable alternative due to the additional strategic duties it included. However, on appeal the Employment Appeal Tribunal (EAT) overturned this judgment. The employment tribunal had decided whether there was a genuine redundancy situation as a matter of overall impression rather than considering the issue in a structured way, one that should begin with considering whether the employer's need for employees to carry out work of a particular kind had either ceased or diminished. In this case the claimant's duties had not ceased or diminished but had been absorbed into the newly created full-time role. The EAT also noted that it will not always be the case that a role with more responsibilities will always be "unsuitable", so such a role could fall to be offered as a suitable alternative vacancy in a situation such as this. The case was sent back to the employment tribunal to reconsider.
What can employers learn from this judgment?
Although the context of this particular case relates to a woman on maternity leave, in all cases where a dismissal arises as a result of a reorganisation, employers need to properly consider whether that dismissal is by reason of redundancy. While a business reorganisation may well result in dismissals for redundancy, that will not always be the case. If the employer's requirements for employees to carry out work of particular kind has not ceased or diminished, a dismissal may be for "some other substantial reason" rather than redundancy. In that case neither the right to a redundancy payment nor the right for protected employees to be offered a suitable alternative vacancy will arise. Distinguishing the difference between these two reasons for dismissal can be complicated and legal advice should be sought before dismissing.
Where the right to be offered a suitable alternative vacancy does arise, careful consideration needs to be given as to what roles might fall into that category. As the EAT noted, a role with more responsibility will not always be unsuitable. Again, this is an area where seeking advice before acting will be beneficial.
What next?
In the King's Speech in July, the UK Government confirmed its plans to introduce an Employment Rights Bill to further increase protections by making it unlawful to dismiss a woman during her pregnancy or within six months of her return to work except in specified circumstances. We do not yet have any detail on what those specified circumstances might be, but it is clear that both now and in the future employers are going to have to exercise considerable care to avoid making potentially costly mistakes.
