Legal Issues – Potential changes to redundancy law

The government has announced that it is looking at introducing new legislation on redundancy to increase the protections for new parents.

The law on redundancy as it stands now contains myriad protections for employees, including limited grounds on which a redundancy situation can be genuine, the need for consultation with employees at risk and a requirement to consider any and all alternatives to dismissing an employee due to redundancy.

Where 20 or more redundancies within 90 days are proposed, the law goes further, and requires a minimum period of collective consultation with employee representatives on key issues such as the method of selection and how redundancy payments will be calculated.

Employees on adoption, maternity and shared parental leave have an additional protection in that where they are at risk of redundancy, they must be offered suitable alternative employment ahead of other employees, albeit there are qualifying criteria for a vacancy to be deemed a suitable alternative.

Those protections apply only during the leave period, and not before (including during pregnancy) or following a return to work. They do not require employers to create vacancies to accommodate those on family leave, but if a vacancy is available the employer must consider whether an employee on family leave should be matched into the role as a suitable alternative.

However, the government has stated that the current rules do not go far enough to safeguard parents. It has pointed to evidence that women are being selected for redundancy upon their return to work and that over 50,000 women per year may be dismissed job due to being pregnant or on maternity leave.

In response to this, the government is consulting on changing the laws to extend the protected period for new mothers to six months after they are back at work. The new rules could also be applied to other employees, such as men returning from adoption or shared parental leave.

If the proposed changes are implemented, it will add an additional layer of complexity to redundancy consultation for employers, as they will have to look favourably not only on those currently on family leave but also those who have returned to work from family leave within the last six months.

It could also make it more likely for employers to have more than one employee to have priority over others for a vacancy, which might result in some form of selection process (e.g. interview) being required to decide who should be appointed to the post. Given the consequences for not adhering to these protections, there is likely to be a greater need to justify any decisions made when there are competing interests between employees on or recently back from family leave.

We will of course issue further updates as and when this issue develops. In the meantime, if you have any questions on any of the issues mentioned in the above article please contact Seanpaul McCahill.

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