Redundancy changes for new parents

The law surrounding redundancy for new parents is set to change from 6 April.

This will offer enhanced protection from redundancy for those who are pregnant, on shared parental leave, or taking time off for adoption.

If you need to make redundancies to cut costs and restructure your business, then you must be aware of the impact these changes could have on your process.

Current laws

Currently, a ‘protected period’ is in place for people taking maternity, adoption, and shared parental leave. This will remain the case until 5 April 2024.

If an employee who is taking these types of family leave is selected for redundancy, you must give them priority in offering alternative employment over other at-risk employees. This alternative employment should be:

  • Suitable and appropriate
  • Not have terms that are significantly worse than their current role.

If this is available and not offered with priority to the employee who is in a ‘protected period’, the dismissal is automatically classed as unfair.

You must follow this priority order even if there are candidates you believe to be more suitable for the alternative job role.

However, suppose those employees who have priority do not take the job role offered, or you have multiple positions available.

In that case, you can offer this alternative employment to other staff once agreements have been made.

Updated regulations

From April 6, these regulations will include pregnant employees from the moment they notify their employer.

The period of protection for those taking maternity, shared parental leave, or adoption leave is also set to be expanded. From 6 April, they will be protected for 18 months following the expected birth or placement of the child that the leave relates to.

It should also be noted that at least six weeks of shared parental leave must be taken for this extension to apply.

Making redundancies moving forward

If you are making redundancies, you must ensure that the correct priorities are given where alternative employment is available.

Those who are responsible for your business’s redundancy consultation must be aware of who has returned from adoption, shared parental leave, and maternity leave and when it was taken.

They will also need to know if there are any pregnant members of staff in the redundancy pool.

Once an agreement has been reached with the prioritised staff members, you should offer any remaining alternative job roles to other members of staff.

Statutory redundancy pay

You also need to ensure that any employees who are not offered alternative job roles are properly compensated with redundancy payments.

These payouts must be given to anyone with at least two years of service.

Under Government regulations, you must pay an employee:

  • Half a week’s pay for each full year they were under 22
  • One week’s pay for each full year they were over 22
  • One and a half week’s pay for each full year they were over 41

With the length of service capped at 20 years.

If employees are offered suitable job roles and do not choose to take them for no valid reason, then they are not entitled to statutory redundancy pay.

For advice on restructuring your business, cutting costs, or making redundancies, get in touch with our team today.