Dismissal of employee returning from maternity leave was not discriminatory, but could be automatically unfair

In SG Petch Ltd v English-Stewart, the Employment Appeal Tribunal (“EAT”) held that the dismissal of an employee as redundant upon her return from maternity leave was not discriminatory on maternity grounds, but might have been automatically unfair, albeit for different reasons than those identified by the Employment Tribunal. 

9th January 2013

In SG Petch Ltd v English-Stewart, the Employment Appeal Tribunal (“EAT”) held that the dismissal of an employee as redundant upon her return from maternity leave was not discriminatory on maternity grounds, but might have been automatically unfair, albeit for different reasons than those identified by the Employment Tribunal.  

The Claimant was a part-time marketing manager, whose duties had been picked up by the other three members of the marketing team during her maternity leave.  On her return to work, she was told that her work had been absorbed by other members of the team and that her role was redundant.  The Claimant was the only employee dismissed for redundancy.  The Tribunal concluded that she had been dismissed because of her maternity leave, and that this constituted maternity discrimination under the Equality Act 2010, and was automatically unfair pursuant to regulation 20(1) of the Maternity and Parental Leave etc Regulations 1999 (the "Maternity Regulations").

The EAT overturned this decision, holding that, as the Tribunal had found there was a genuine redundancy situation, the reason for dismissal was clearly redundancy, and could not therefore have been the Claimant’s maternity leave.  The discrimination claim was rejected on this basis.  Further, Regulation 20(1) of the Maternity Regulations provides that a dismissal will be automatically unfair if the reason or principal reason for dismissal is connected with the fact that the employee took maternity leave.  Again, the EAT held that, as the dismissal was for redundancy and not maternity leave, her dismissal was not automatically unfair under Regulation 20(1).  However, the EAT noted that the Tribunal had not considered whether the dismissal was automatically unfair under Regulation 20(2) of the Maternity Regulations, which provides that a dismissal will be automatically unfair if, in a genuine redundancy situation, an employee is selected for redundancy because of maternity leave.  The case has therefore been remitted back to the Tribunal to consider this point.  

Impact for Employers

  • The EAT concluded that the Claimant’s dismissal was not discriminatory or automatically unfair as it was not because of her maternity leave: there was a genuine redundancy situation.  Whilst it was then noted that the Claimant’s selection for redundancy might have been automatically unfair under the Maternity Regulations, notwithstanding the genuine redundancy situation, it failed to consider whether her selection for redundancy was also discriminatory.  In light of the Tribunal’s suggestion that the employer did not carry out a proper redundancy process, it seems that, in respect of the discrimination claim, the burden of proof should have shifted to the employer to demonstrate that no discrimination had occurred in respect of the decision to select the Claimant for redundancy over the other three employees.  In this regard, it would not be necessary to show that the sole or even the principal reason for the dismissal was the fact that she had taken maternity leave, only that it had "a significant influence on the outcome".  On this basis, this element of the EAT’s decision could be open to challenge.
  • Employers are increasingly under pressure to make costs savings, but this decision serves as an important reminder to adhere to a fair process when handling redundancies, considering which individuals should properly make up any redundancy pool and applying fair selection criteria.  Consultation should take place with employees, including in relation to suitable alternative vacancies, and any decisions should be documented.
  • If a redundancy situation arises during an employee's maternity leave, specific rules apply. If it is not practicable by reason of redundancy for the employer to continue to employ her under her existing contract, she will be entitled to be offered a suitable alternative vacancy (where one is available) to start immediately after her existing contract ends. The employee on maternity leave is therefore given priority over other employees who are also at risk of redundancy.