A fresh reminder on redundancy protection
In the recent decision of Ballerino v. Racecourse Association Ltd [2024] EAT 98, the Employment Appeal Tribunal (EAT) upheld an appeal against an employment tribunal’s decision to dismiss an accountant’s claims of maternity discrimination and automatic unfair dismissal. Miss Ballerino was an accountant, who worked part-time. When on maternity leave, she was told about a proposal to make her role redundant. Her responsibilities would instead be carried out as part of a new, full-time position of Finance Manager and Business Analyst. Miss Ballerino was invited to apply for this role and, at the same time, was offered a settlement agreement. She did not apply for the alternative role and, when settlement discussions broke down, her employment was terminated on the grounds of redundancy.
Miss Ballerino brought claims for sex discrimination, maternity discrimination and automatic unfair dismissal. She alleged, among other things, that the redundancy situation was a sham – that there was not a genuine redundancy situation. She also alleged that the Finance Manager and Business Analyst role was a suitable alternative employment and so, given she was on maternity leave, she should have automatically been offered that role rather than invited to apply for it.
At first instance, the Employment Tribunal (ET) found that the Finance Manager and Business Analyst role was not a suitable alternative role and so there had been no requirement to offer it to Miss Ballerino. The ET also accepted there was an acceptable business reason for the reorganisation and that she had not been discriminated against.
Miss Ballerino appealed, arguing that, in coming to its decision, the original tribunal had failed to consider whether there was, in fact, a genuine redundancy situation. She argued that, without considering this, it was not possible to determine whether or not the Finance Manager and Business Analyst role was suitable alternative employment. The EAT agreed and identified the failure to first consider the genuine redundancy point as a crucial misstep. It commented that, whilst there might be occasions where it was unnecessary to apply the genuine redundancy test before going on to consider suitable alternative employment, that was not the case here based on the specific facts. That was because the Claimant’s role had been new itself and there had been uncertainty about the number of hours required, so that it could not simply be assumed that the role was no longer required. The EAT also accepted that there was some overlap between consideration of whether there was a diminished requirement for work of a particular kind (the genuine redundancy test) and the work the Finance Manager and Business Analyst would do (which was relevant to the question of whether it was suitable alternative employment).
Additionally, the EAT found that the answer to the “genuine redundancy” question required consideration before the ET could properly determine the employer’s motives in making her role redundant and whether the accountant had been discriminated against because of her maternity leave.
This decision highlights the importance of proper evaluation of whether the proposed termination of employment meets the statutory test for a redundancy dismissal. An assessment of this must be carried out during the early stages of planning. This is not only a key step for tribunals, but also for employers, to ensure the integrity of their process. Taking time to determine whether a redundancy situation genuinely exists before commencing a redundancy programme will help manage the risk of any later claims. This case is also a reminder of the protective measures available for employees on family leave.
What else should employers be aware of?
This case centred around Regulation 10 of the Maternity and Parental Leave Regulations 1999. Regulation 10 provides that, where a person who is on maternity leave is provisionally selected for redundancy, their employer is obliged to offer them any suitable alternative role that exists.
Since April, this protection has been extended under the Protection from Redundancy (Pregnancy and Family Leave) Act 2023 to include employees who are pregnant and those who are on, or are returning from, adoption, shared parental or maternity leave.
- Employees who are on adoption leave will be covered by the protection from the start of their leave until 18 months from the child’s placement date or entrance into the UK.
- Those on shared parental leave will benefit from priority from the start of their leave until either its end, if taking less than six consecutive weeks, or 18 months from the child’s birth date or placement date if taking six or more weeks.
- Employees who experience a miscarriage will be protected from the notification of the pregnancy until two weeks after the end of the pregnancy if it ends before 24 weeks.
- Finally, those on maternity leave will be given priority from the notification of their pregnancy until 18 months after the date of childbirth.
Key takeaways
The removal or change of a role will not always come within the law on redundancy in the UK and advice should be taken to make sure the correct termination process is being followed.
There is often a misconception that it is not possible to make staff redundant whilst they are on maternity leave. It is possible to make staff on maternity leave (or those who are pregnant, on adoption or on shared parental leave) redundant but redundancies in such situations will always come with a risk. To mitigate this risk, employers should ensure they are confident that there is a genuine redundancy situation at an early stage (ideally prior to making any redundancy announcement). This is particularly key where a pregnant employee, or an employee on protected family leave, is the only employee at risk. Employers should also remember the obligation to offer any suitable employment to the protected employee if they are provisionally selected for redundancy. In practical terms, to ensure this happens, it may be helpful for employers to keep a record of the protection period against the duration of the parental leave to ensure this does not get missed during any redundancy exercises. It will also be important to ensure managers dealing with redundancy situations are aware of this protection and use it appropriately.
