27/09/2010

Employment e-Brief – redundancy and maternity pay

In this week’s e-Brief we consider the case of Simpson v Endsleigh Insurance Services Ltd and others which looked at the issue of redundancies taking place during an employee’s maternity leave and what constitutes a suitable alternative vacancy.

Background

During a redundancy exercise, under the Maternity and Parental etc Leave Regulations 1999 (‘MPL’), an employee who is on maternity leave is entitled to be offered any alternative vacancy that arises. Often misunderstood, is the fact that this right provides that the alternative must be offered in priority to those not on maternity leave provided that certain conditions are satisfied.

Regulation 10(3)(a) MPL provides that ‘the work to be done under it is of a kind which is both suitable in relation to the employee and appropriate for her to do in the circumstances, and’ Regulation 10(3)(b) provides that ‘its provisions as to the capacity and place in which she is to be employed, and as to the other terms and conditions of her employment, are not substantially less favourable to her than if she had continued to be employed under the previous contract’.

Facts

Whilst Mrs Simpson was on maternity leave, Endsleigh announced that it would be closing most of their retail outlets. Work from these retail outlets was to be transferred to call centres in Cheltenham, amongst others. One of the outlets facing closure, in London, was the place where Mrs Simpson worked. After Mrs Simpson’s redundancy was confirmed, she issued proceedings for automatic unfair dismissal.

Decision

The Employment Tribunal held, and the Employment Appeals Tribunal agreed, that although it had found that there were four alternative vacancies in Cheltenham, Endsleigh was not under a duty to offer these vacancies to Mrs Simpson. These vacancies were not suitable alternatives as Mrs Simpson would not have relocated and were substantially less favourable.

Further, Regulations 10(3)(a) and 10(3)(b) went hand-in-hand; both needed to be satisfied to determine whether a suitable alternative vacancy existed which should be offered.

The implications of this case are that any suitable alternative vacancy would need to be both ‘suitable and appropriate’ and ‘not substantially less favourable’ for the woman on maternity leave. However, the decision should not be taken as carte-blanche to not offer alternative vacancies simply because an employer believes it is not suitable.

As with many such decisions, this one is fact-sensitive. Please seek advice in any particular case and for further information, please contact any member of the employment team.