There can be a lot of confusion about what should happen if there is a redundancy situation whilst you are on maternity leave.
The law says that if it is not practicable by reason of redundancy for an employer to continue to employ a woman on maternity leave, whether ordinary or additional, under her existing employment contract, the employee is entitled to be offered (not just invited to apply for) alternative employment with her employer where there is one available. Such alternative employment must be both suitable and appropriate for her to do in the circumstances and no less favourable in terms of capacity or place where she is employed or in relation to the other terms and conditions of her employment.
This basically gives the woman priority over other employees who are at risk of redundancy, even if they are better qualified for the job. But it is also for the employer to decide if the job is suitable and they should provide written evidence of why the role is suitable or not. Failure on the part of the employer to offer alternative employment is automatically unfair dismissal.
Please note however that if there is no suitable alternative vacancy a redundancy would be fair if all other redundancy procedures were followed.
An employee that is dismissed on the grounds of redundancy is entitled to statutory redundancy pay if she meets the necessary eligibility requirements. These are:
– she is an employee
– she has at least two years’ continuous service and
– she has been dismissed for redundancy.
Statutory redundancy pay is calculated by a combination of age, years of service and weekly gross pay, subject to a weekly statutory maximum as calculated at the employment termination date. You may well be entitled to contractual redundancy pay under your contract but any sum received as contractual redundancy pay will be set off against the statutory amount. Any payment that you receive as part of a redundancy package is tax free up to a certain amount (currently £30,000) and it is the redundancy “pay” element that is tax fee and not any other element such as pay given in lieu of notice, even if the severance pay and pay in lieu is under that amount.