Employment Law Case Update: Pregnancy and Redundancy

All employers should be aware of how to treat employees once they announce they are pregnant.  Our Employment Law team today review the case of Mrs S Shipp v City Sprint UK Ltd 2021 and a textbook case of pregnancy discrimination in a redundancy situation.

Mrs Shipp worked for the company from September 2010 until September 2020. When she went on maternity leave in June 2019 she held the position of Marketing Director and was paid an annual salary of £100,000.

After telling colleagues she was pregnant, Mrs Shipp was subjected to inappropriate comments from male colleagues including questions about when she stopped taking contraception, whether her baby was planned, and how she thought the pregnancy would affect her long-term career prospects.

While she was on maternity leave, there was a restructure of the company. A new CEO was appointed and he began to implement changes in the company’s senior leadership structure. Mrs Shipp was not informed or consulted on any of these changes, and in September 2019 she was informed via letter that her role was at risk of redundancy.

Mrs Shipp was then offered an alternative role as Director of Marketing. The job description Mrs Shipp received from Ms Kilcoyne, Head of HR, was just a combination of various generic marketing director job descriptions and was not specific to the business. Mrs Shipp was also informed that the role of Director of Marketing was lower in seniority and status to her old role of Marketing Director, and had a lower annual salary of £80,000. Ms Kilcoyne could not explain how the duties of this new role differed from the Marketing Director role Mrs Shipp had previously held. That, combined with the fact that the Director of Marketing role did not appear on any of the company’s organisational charts, made Mrs Shipp suspicious that the role did not really exist.

The Employment Tribunal (ET) noted that other senior executives who had found new roles within the company following the restructure were not required to take a pay cut.

Mrs Shipp raised a grievance about the lack of consultation, the decision to demote her, and the comments made by her colleagues before she went on maternity leave. In her grievance she said “It seems very ‘convenient’ that the only person who has been demoted from the operating board level, is the person who was on Maternity Leave at the time the decisions were made”.

Neither her grievance nor her appeal were upheld by the company and she subsequently filed a claim with the ET for discrimination and harassment related to sex, discrimination related to pregnancy and maternity, breach of contract, and unfair dismissal.

The ET upheld her claim of harassment, finding that the comments made by her colleagues were unwanted and “had the effect of creating a humiliating and degrading environment”.

Mrs Shipp also succeeded in her claims of unfair dismissal and discrimination related to sex and pregnancy and maternity. The ET found that the new CEO had decided that there was no role for Mrs Shipp in the business because she was on maternity leave. Judge Grewal noted there was “stark difference” in the way Mrs Shipp was treated to that of her colleagues and the “only explanation” for this difference in treatment was that she was on maternity leave. The evidence indicated that the role of Director of Marketing did not really exist, and was offered to Mrs Shipp with considerably less favourable terms so that she would refuse it. The redundancy consultation process was therefore a “sham” and there was no fair reason for dismissal.

The ET awarded Mrs Shipp £30,000 for injury to feelings.

The outcome of this case is unsurprising as it appears to be a pretty clear case of discrimination based on maternity or pregnancy. Employers should remember that employees who are pregnant or on maternity leave have enhanced protections against redundancy and in most cases will have the right to return to their previously held position, on the same terms of employment. In cases where it is impossible for the employee to return to their previously held role, they should be offered another suitable role, on terms and conditions that are not less favourable to the role they previously held. 

If you have any questions regarding this article, you can call our Employment team today on 023 8071 7717 or email employment@warnergoodman.co.uk.

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ENDS

This is for information purposes only and is no substitute for, and should not be interpreted as, legal advice.  All content was correct at the time of publishing and we cannot be held responsible for any changes that may invalidate this article.