Redundancy and maternity leave - who to protect?
This article was included in the spring/summer 2011 issue of People - the employment and pensions newsletter.
In the case of Eversheds Legal Services Limited v De Belin, the Employment Appeal Tribunal ("EAT") examined whether inflating the redundancy selection score of an employee on maternity leave constituted unlawful sex discrimination against a male colleague. Employers are well aware of the risk of treating a pregnant employee or an employee on maternity leave less favourably. However, this case is an important reminder that any disproportionately favourable treatment can also expose employers to potential claims from male employees.
This case was heard under the old discrimination legislation. Under section 1 of the Sex Discrimination Act 1975 ("SDA"), it was direct sex discrimination to treat a person less favourably on the ground of their sex. Section 2(2) of the SDA, however, states that, for the purposes of sex discrimination against men, "no account shall be taken of special treatment afforded to women in connection with pregnancy or childbirth". Similar provisions are contained in the new Equality Act 2010 ("EqA").
It is worth noting that under regulation 10 of the Maternity and Paternity Leave Regulations 1999 ("MPL Regulations"), a woman on maternity leave in a redundancy situation is entitled to be offered suitable alternative vacancies, effectively in priority to other employees who are at risk of redundancy. However, the MPL Regulations do not entitle a woman on maternity leave to be treated more favourably during a redundancy selection process generally.
The Claimant, Mr De Belin, and Ms Reinholz, worked as associates at the law firm Eversheds. In September 2008, it was decided that one of the two associates would be made redundant.
One of the criteria that they were each scored against was "lock up". This measured the length of time between undertaking a piece of work and receiving payment from the client. Eversheds measured this as at 31 July 2008, when Ms Reinholz was absent on maternity leave. As a score could not be calculated for Ms Reinholz, Eversheds awarded her the maximum score of 2 for this criterion, whereas Mr De Belin’s score was 0.5.
The overall score for Mr De Belin was 27, Ms Reinholz was awarded 27.5, meaning that Mr De Belin was selected for redundancy. Mr De Belin’s claims for direct sex discrimination and unfair dismissal were upheld at the Employment Tribunal. Eversheds appealed to the EAT.
The EAT held that employees on maternity leave cannot be treated more favourably than is reasonably necessary to compensate them for the disadvantages that arise from their maternity leave. If a woman who is pregnant or on maternity leave has been disproportionately favoured, then a male colleague who has suffered a disadvantage can succeed with a sex discrimination claim.
The EAT held that the measure adopted by Eversheds to remove the disadvantage faced by Ms Reinholz’s absence was not proportionate and went beyond what was reasonably necessary. The EAT held that there were less discriminatory ways of removing Ms Reinholzs’ disadvantage and that the lock up performance of both candidates could have been measured as at the last date that Ms Reinholz was at work (which had been identified by Me De Belin during a grievance hearing).
Although Eversheds had sought to argue that, in light of section 2(2) of the SDA, they were positively required to give Ms Reinholz the score they did, the EAT held that section 2(2) SDA did not assist them. The EAT noted that it followed from the principles of EU law in this area that it is necessary to read the words "special treatment afforded to women in connection with pregnancy or childbirth" as referring only to treatment accorded to a woman so far as it constitutes a proportionate means of achieving the legitimate aim of compensating her for the disadvantages occasioned by her pregnancy or maternity leave.
Many employers are conscious that employees on maternity leave should not be disadvantaged. However, this case highlights the fact that employers should not assume that by treating a woman more favourably, they are protecting themselves from discrimination claims from male employees. The EAT acknowledged that a decision which protected employers from liability in respect of any advantageous treatment afforded to women who are pregnant or on maternity leave, however excessive or unfair to colleagues, would provide a more distinct "bright line". However, the EAT noted that the price would be too high and the familiar proportionality principle strikes the right balance.
When undertaking any redundancy process involving employees who are pregnant or on maternity leave, employers should therefore consider the impact of the selection criteria and whether they are proportionate. Rather than automatically favouring the female employee, it is important that employers carefully consider the ways that disadvantages of a maternity absence can be removed whilst not going beyond what is reasonably necessary.