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02 February 2015

Redundancy during maternity leave

The recent case of Sefton Borough Council v Wainwright provided some clarity on the application of Regulation 10 of the Maternity and Parental Leave etc. Regulations 1999, which entitles a woman on maternity leave whose job comes to an end by reason of redundancy to be offered alternative employment with her employer, before her existing contract ends, where there is a suitable vacancy.

The new contract must be for work appropriate for the employee and on terms and conditions that are not substantially less favourable than if she had continued to be employed under her previous contract. An employer's failure to comply with Regulation 10 renders any subsequent dismissal automatically unfair under the Employment Rights Act 1996 (ERA).

Mrs Wainwright worked for Sefton Borough Council as Head of Overview and Scrutiny. Faced with cuts to its budget, the Council carried out a restructuring process, as a result of which her role was combined with the equally graded position of a colleague, Mr Pierce, in a new position, Democratic Service Manager (DSM). By the time Mrs Wainwright and Mr Pierce were notified that their positions were at risk of redundancy, Mrs Wainwright had commenced a period of maternity leave. Both employees were considered capable of performing the role of DSM and were subsequently interviewed for the position. However, the Council was of the view that Mr Pierce was the better candidate and he was offered the job.

Mrs Wainwright was given three months' notice of redundancy and informed of her right to be redeployed. However, there were few alternative vacancies available and she did not express interest in any other position, nor was any offer made to her.

The Employment Tribunal (ET) upheld Mrs Wainwright's claims of automatic unfair dismissal and direct discrimination under Section 18 of the Equality Act 2010. The ET dismissed the Council's argument that she was not entitled to special treatment under Regulation 10 until the decision had been taken as to who was the best candidate for the role of DSM. In the ET's view, the right to be offered that vacancy arose when the redundancy situation regarding her existing job became known. The post of DSM was suitable, available and vacant and there should not have been a selection process for it as this 'undermined any protection afforded by Regulation 10'. Mrs Wainwright should have been slotted into the new position. The Council's failure to do so was a breach of Regulation 10 and thus rendered her dismissal automatically unfair and an act of direct pregnancy and maternity discrimination.

The Employment Appeal Tribunal (EAT) agreed with the ET's decision regarding Mrs Wainwright's claim of automatic unfair dismissal, rejecting the Council's submission that she was only 'displaced' after Mr Pierce had been given the DSM position and she was put in the 'redeployment' pool. The Council sought to rely on such terms rather than the term 'redundancy' as used by the Regulation. In doing so, it 'put its focus on the process… rather than the redundancy situation in which that process was to take place'. The ET's approach that 'redundancy' should be defined for Regulation 10 purposes as it is under Section 139 of the ERA was correct. Once an employee's position is redundant, the obligation under Regulation 10 arises, and this occurred when the Council decided to do away with Mrs Wainwright's job. It was open to the Council to offer her a suitable post other than the role of DSM, but it had not done so.

However, the EAT disagreed with the ET that a breach of Regulation 10 automatically means that there is 'inherent' discrimination for the purposes of Section 18 of the Equality Act. For a finding of direct discrimination, there must have been unfavourable treatment because of the protected characteristic. The ET had failed to ask the 'reason why' question – why had Mrs Wainwright been treated in the way she was? This was an error of law and this ground of appeal was therefore allowed and the matter referred to the same ET for further consideration.

Contact employment law partner Jo Davis on 01753 279029 or email employmentlaw@bpcollins.co.uk for advice on any redundancy matter.

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