A redundancy is a type of dismissal. Redundancies occur when businesses close down, move location, or a reduction in the number of employees needed to do work of a particular kind.
Special rules apply, but it is possible to be made redundant during maternity leave, adoption leave or shared parental leave, as long as it’s a genuine redundancy situation and you have not been chosen for redundancy because of your pregnancy or maternity, adoption and shared parental leave (family-related leave).
This article provides information on the special rules that apply to redundancies for those who are on family-related leave. It also gives advice on rights and entitlements if you are being made redundant while you are pregnant or on family-related leave.
For other information and advice, see our other pages on:
- Dismissal during pregnancy and maternity leave
- What to do if you are under threat of redundancy
- Coronavirus FAQ page on Redundancy
Is there a genuine redundancy situation?
A genuine redundancy happens for one of three reasons:
- Your place of work closes or moves (this can be temporary or permanent)
- The type of work you do will no longer be carried out at your place of work
- Fewer employees are needed to do the particular type of work that you do
It is unlawful to make you redundant if one of the three reasons above does not apply. For example, if you are returning from maternity leave and your employer says your role is being made redundant, but you find out that they are keeping your maternity cover, then your role is not genuinely being made redundant. In that situation, you could have a potential claim against your employer for unfair dismissal and maternity discrimination, and you should seek advice.
If there isn’t a genuine redundancy situation, your employer can still dismiss you, but there must be a fair reason to do so. See our article on dismissal in maternity leave.
Is there a fair selection process?
If there is a genuine redundancy situation, your employer must follow a fair redundancy process. This usually involves identifying appropriate roles for redundancy, and consulting with individuals at risk of redundancy. More more details on what constitutes a fair selection process, see our article on Redundancy.
You have a right to be consulted even if your are on maternity/adoption/shared parental leave. Your employer should still give you as much warning as possible to enable you to consider alternative solutions.
You should not be selected for redundancy because of your pregnancy, or your maternity, adoption or shared parental leave. You should also not be selected for redundancy based on factors related to your pregnancy and/or leave. For instance, pregnancy-related sick leave, absence for prenatal appointment, or length of leave must not be taken into account. Criteria that indirectly discriminate against women (e.g. selecting part-time employees ahead of full-time employees) may also be unlawful.
If you think you have been unfairly selected for redundancy based on pregnancy or maternity/adoption/shared parental leave, or you were not consulted, it is important to seek advice. Also see our page on what to do if you are under threat of redundancy.
Were you given priority for a suitable alternative vacancy?
If you are selected for redundancy during maternity leave, you must be offered any suitable alternative vacancies before other colleagues. There are similar requirements for shared parental and adoption leave.
You do not have to apply or be interviewed for any suitable alternative vacancy but should be offered it over your colleagues. Your employer also cannot wait until all available vacancies have been filled before determining whether there is a suitable alternative vacancy.
To be a suitable alternative vacancy, the terms and conditions of the new job must not be substantially less than the old job. This must be determined in each case considering your individual circumstances, and whether the new job is similar in terms of status, content, salary, hours and location.
If you are not offered a suitable vacancy, or your employer insists that you apply for an alternative role, you may have a claim for unfair dismissal so it is important to seek advice.
Please note that you should make the decision to accept and offer for an alternative vacancy carefully. If your employer offers you a suitable alternative vacancy and you turn it down unreasonably you will lose your right to a redundancy payment. Whether it was reasonable for you to turn it down depends on your reasons and can include your health and your personal or family commitments.
What payment am I entitled to?
If you are made redundant, you may be entitled to:
- redundancy pay
- notice pay, or pay in lieu of notice
- accrued annual leave not yet taken
Whether or not you receive redundancy pay and notice pay depends on how long you have worked for your employer. Your contract might also give you more than the legal minimum. You should always check your contract to see what it says.
For more information, see our FAQ on on redundancy and notice pay.
Redundancy pay and SMP/SAP/ShPP
You will be entitled to statutory redundancy pay if you have been employed by your employer for at least 2 years.
Your terms and conditions are continuous during family-related leave. Your employer must count leave as continuous employment for redundancy pay purposes even though you were not in work.
If you are on family-related leave, your redundancy pay should be calculated based on your pay before your statutory leave period started. It should not be based on Statutory Maternity Pay (SMP), Statutory Adoption Pay (SAP), or Shared Parental Pay (ShPP). If your contract provides for more generous pay, your redundancy pay should also not be calculated on this basis.
If you returned to work on reduced hours or part-time after your leave period, your redundancy pay will be based on your pay at the time of the redundancy. Your length of service will be based on how long you have been in your job (including years working full-time and part-time).
Notice pay and SMP/SAP/ShPP
The rules around notice pay and family leave are complex and not clear. If you are uncertain about your entitlement, you should seek advice.
What notice period am I entitled to?
If your employer is making you redundant, by law they must give you a minimum amount of notice – this is known as statutory notice. How much you get depends on how long you’ve been employed. If you have been employed by your company for 2-12 years, you will get one full weeks’ notice for every year you have worked for the company up to a maximum of 12 weeks.
However, most contracts will have a different period of notice – this is called contractual notice.
Your employer should give you whichever notice period is longer.
What notice pay am I entitled to?
If your notice period covers a period of your family leave, notice pay is a complex issue and the rules are not very clear. How much pay you are entitled to depends on whether your contractual is at least one week longer than your statutory notice period.
If your contractual notice period is at least 1 week more than the statutory notice period, your employer only has to pay SMP/ShPP/SAP during the notice period (for the weeks that you are entitled to it). So, for instance, if you entitled to three months contractual notice and 2 months statutory notice, your employer should pay your notice according to your contractual wages for periods that you would have been working, plus your full SMP/ShPP/SAP entitlement.
If your contractual notice period is at least 1 week less than the statutory notice period, then you would be entitled to full pay for the notice period according to your contractual wages. If you are receiving SMP/ShPP/SAP for some or all of this period, then this would be offset/included against any notice period you would receive. So, for instance, if you are entitled to 2 months contractual notice, and 3 months statutory notice, you would be entitled to your full pay for 3 months less any SMP/ShPP/SAP payments you would be entitled to during that period. You should still receive your full SMP/ShPP/SAP entitlement for periods beyond your notice.
You employer can keep you employed until the end of your notice period, or choose to give you pay in lieu of notice. If you are given pay in lieu, your employment ends immediately and you do not need to serve your notice period.
If your contract allows your employer to give pay in lieu, your employer can deduct your SMP/SAP/ShPP from the payment (but they must still pay your full SMP/SAP/ShPP entitlement). If your contract does not allow your employer to give you pay in lieu, and they want to pay you in lieu anyway, they cannot deduct your SMP/SAP/ShPP and should give you full notice pay plus your full SMP/SAP/ShPP entitlement.
Because the law is not clear, many employers choose to pay full notice pay plus SMP/SAP/ShPP. If this is not the case, and you are unclear about your employer’s calculation, you should seek advice.
Pay for accrued annual leave
If there is annual leave that you were not able to take before the end of your notice period, you have the right to be paid for this holiday, even if you cannot take it.
You continue to accrue annual leave – just as you continue to accrue all of your other contractual rights (including pension contributions, tax free allowances etc.) – during your leave period. Therefore, your employer must pay you for annual leave accrued during your leave period.
Frequently Asked Questions
I recently returned to work, and have been notified I’m at risk of redundancy. Am I still protected?
It depends on when you became at risk of redundancy. If the risk of redundancy arose while you were still on leave, then you will be protected.
However, as soon as you return to work, your employer is no longer required to offer you any suitable alternative vacancy. Your employ can require that you interview for a new role, and can choose to give suitable vacancies to other colleagues.
The selection criteria for choosing your role for redundancy must still be fair. Time off because of pregnancy or maternity/adoption/shared parental leave must not be taken into account. The redundancy must still also be genuine. See our page on Redundancy.
I’m pregnant, and my employer just informed me that I’m at risk of redundancy. Am I protected?
Unlike women on maternity leave, pregnant women who have not yet started maternity leave have no special protection in a redundancy situation. Your employer will not usually be required to offer you a suitable alternative vacancy.
However, the selection criteria for choosing your role for redundancy must still be fair. You cannot be selected for redundancy because you are pregnant, or for factors related to your pregnancy. For instance, time off because of pregnancy or your impending maternity leave must not be taken into account.
The redundancy must still also be genuine. See our page on Redundancy.
I’ve been made redundant before I am due to go on family leave, will I continue to get statutory pay?
If you are made redundant before the qualifying week (the 15th week before the expected week of childbirth), you will not get SMP but you may be able to claim Maternity Allowance (MA).
If you are made redundant in or after the qualifying week but before your maternity leave starts, you are still entitled to SMP (as long as you meet the qualifying conditions) for 39 weeks or until you start a new job.
Shared Parental Leave
If you are made redundant before or during Shared Parental Leave, you will only be entitled to ShPP if you have booked it. It is not automatically payable like SMP/MA.
For more information on booking SPL, see our page on How to take Shared Parental Leave (SPL) – notice and booking.
If you are made redundant after the beginning of the week during which you were notified of being matched with a child for adoption, you should still receive SAP for the whole period of adoption leave.
What should I do if my employer won’t pay my SMP/SAP/ShPP?
When a settlement agreement includes SMP/SAP/ShPP, the agreement must clearly record the full amount of statutory pay to which you are entitled, tax and NICs deductions, and the full amount of contractual redundancy.
If the settlement agreement does not specify the amount of SMP/SAP/ShPP, you should try to resolve things by asking your employer to pay any outstanding SMP/SAP/ShPP.
If your employer does not pay your full SMP/SAP/ShPP you should contact HM Revenue & Customs Statutory Payments Disputes Team on 0300 322 9422.
Can my employer pay my SMP/SAP/ShPP in one lump sum or should they keep paying me monthly?
What do I do if I don’t think my employer has not followed a fair process, or I don’t think there is a genuine redundancy?
If your employer has not followed a fair process, or the redundancy is not genuine, you may have a claim for unfair dismissal. In order to claim unfair dismissal, you must have worked for your employer for at least two years.
If you feel you have been made redundant because you are pregnant or on family-related leave, you may also have a claim for discrimination and automatic unfair dismissal. You do not need to have worked for your employer for at least two years to make these claims.
In some situations, you do not need 2 years of service with an employer to claim unfair dismissal. If the dismissal is automatically unfair (for example if you have been selected for redundancy because you are pregnant or on family-related leave), you can bring a claim against your employer regardless of how long you’ve worked for them.
If you feel you have been unfairly dismissed or discriminated against, you should consider raising a grievance and/or starting an employment tribunal claim.
We also have a page on what to do if you are under threat of redundancy.
There are strict deadlines for making claims so you should not delay in doing this. You should seek legal advice if you are considering bringing a claim.
What should I do if I think my employer has discriminated against me in the redundancy process?
If you feel you were selected for redundancy or not chosen for a role that was suitable for a discriminatory reason, for example, because you are female, pregnant, on family-related leave or because of another protected characteristic (race, sexual orientation, gender reassignment, marital status, age, disability, religion or belief) then you may have a claim for discriminatory dismissal.
You should seek advice if you believe that you may have been made redundant unfairly. There are strict deadlines for making claims so you should not delay doing this.
We also have a page on what to do if you are under threat of redundancy.
This advice applies in England, Wales and Scotland . If you live in another part of the UK, the law may differ. Please call our helpline for more details.
If you have further questions and would like to contact our advice team please use our advice contact form below or call us.