How will redundancy regulations for new parents change from 6 April?

Starting from 6 April, new regulations will enhance protection against redundancy for individuals who are pregnant, on shared parental leave, or on adoption leave.

If you a business owner and are contemplating redundancies as a strategy for cost-cutting and restructuring, then you will need to understand the implications of these regulatory changes on your redundancy procedures.

What is the current legal framework?

Up until 5 April 2024, employees on maternity, adoption, or shared parental leave benefit from a ‘protected period’.

During this time, should they face redundancy, they have the right to receive offers of alternative employment ahead of other employees also at risk.

This alternative position must be suitable and must not be inferior in regards to their current role.

If you fail to offer such priority to your employees, the dismissal can be deemed automatically unfair.

You need to offer these priority positions even if you consider other candidates as more fitting for the role.

However, if the prioritised employee declines your offer, or if more than one vacancy exists, you may then extend the offer to other staff, provided you have reached an agreement with those in the priority group.

Are there any upcoming changes?

The extent of these regulations will widen from 6 April to include pregnant employees from the moment they inform their employer of their pregnancy.

Additionally, the protection period for individuals on maternity, shared parental, or adoption leave will extend to 18 months after the expected birth or adoption of the child.

It is important to note that this extended protection applies only if at least six weeks of the shared parental leave is taken.

How to implement redundancies under the new legislation

When you implement redundancies, it is crucial you prioritise those eligible for alternative positions correctly.

Redundancy consultation representatives must be aware of employees who have recently returned from maternity, shared parental, or adoption leave – this included the dates these leaves were taken, as well as any pregnant employees facing redundancy.

Once prioritised individuals have been considered for alternative roles, any remaining positions can be offered to other employees.

Is statutory redundancy pay changing?

You, as an employer, must ensure your employees who are not offered or refuse suitable alternative roles without just cause receive redundancy payments – this is provided they have been employed for a minimum of two years.

According to Government guidelines, redundancy payments should be calculated as follows:

-        Half a week’s salary for each full year of service below 22 years of age

-        A full week’s salary for each full year of service at 22 years of age or older

-        One and a half week’s salary for each full year of service at 41 years of age or older, with a service cap of 20 years

Employees who decline these offered suitable positions, without a legitimate reason, forfeit their right to statutory redundancy pay.

If you would like guidance on business restructuring, reduction of cost, or the redundancy process, please get in touch with the team at Iceberg Accounting.