Today's article concerns the question of pregnancy-related dismissals.

Case Name and Reference: Reardon v Global Shares (Ireland) Limited (UD 611/2009)
Court or Tribunal: Employment Appeals Tribunal (“EAT”)
Legislative Reference: Unfair Dismissals Acts, 1997 to 2007 (the “Acts”)
Jurisdictions/Subject Matter: Pregnancy Dismissal

Facts

The claimant (“employee”) was appointed Head of Finance with the respondent (the “employer”), a start up company, in February 2007. The main activity of the company is the administration of employee share plans. She was complemented by both the auditors and the Board of Directors for her good work. She had no performance or disciplinary problems during the course of her employment with the company.

In December 2007 she became pregnant and formally announced her pregnancy to the CEO of the company on 28 February 2008. From that time on she felt she was being left out of decision making, she felt her workload was increased and that unreasonable demands were made of her. When she approached the operations manager he failed to deal with her grievance and requested she take on the extra responsibility of doing further fundraising before having her baby.

She left to have her baby in June 2008 and was due to return to work on 30 April 2009. The employee was called to a meeting with the CEO and new chairman on 17 February 2009 and told matters were not working out on the operational side of the business. The employee was told that the company were cutting costs and a number of significant changes were being made. The CEO explained that the company was looking to combine the finance and operations activities of the company and that this would result in her being made redundant. The chairman of the company outlined he did not consider the employee suitable for the new role of joint Operations/ Finance Director, and that it would be unlikely she would be appointed to it. The employer did not give any consideration to the employee’s offer of a diminished role in the company.

On 18 February 2009 the employee received an email from the CEO of the company reiterating that if the employee was not successful in procuring the restructured position she would be made redundant. The employee didn’t apply for the job as she felt it was made clear to her that there was no point. Mr H (who was filling in the employee’s role in her absence) was appointed joint Operations/ Finance Director and currently holds the position.


Determination

The EAT, which was chaired by Mr E. Murray in Cork on 10 March 2010, found that the employee’s dismissal for the purported reason of redundancy was void as the employee was on maternity leave. The tribunal was therefore satisfied that the employee’s dismissal was unfair and awarded €49,400 to the employee.


Legal Review

The Tribunal concluded that notice of dismissal for the purported reason of redundancy was given in the email of 18 February 2009. The employee was on maternity leave at this time which is protective leave according to Section 21 (1)(a) of the Maternity Protection Act 1994 (“MPA”).

Section 23 of the MPA specifically provides that any purported termination, notice of termination or purported suspension of an employee’s employment while the employee is absent on protective leave shall be void. Section 23 does not preclude employers from discussing potential changes to the employee’s employment situation but it does, however, prohibit the employer from actually taking action to terminate their employment while the employee is on maternity leave. Generally, best advice is not to take any precipitous steps, including having any in depth discussions with the employee until after her return from maternity leave.

Not only did the employer in this case make the cardinal mistake of effectively dismissing the employee while she was on maternity leave, but he also failed to convince the Tribunal that the dismissal resulted from a redundancy situation. The Tribunal concluded that the employment of another person, Mr H, the operations & finance director:

“would be qualitatively more advantageous to the Company than the continuing employment of the claimant, and it is clear that the role the claimant had was not redundant, but was relabelled. The Respondent gave no consideration to the redeployment, even in a diminished role, of the claimant.”

Employers must be aware that, when considering a redundancy defence raised by an employer, the EAT will ask the following questions:

1. Was the redundancy genuine, or did the dismissal take place under the cloak of redundancy?
2. Was there a cause and effect relationship between the redundancy and the dismissal?

There may, according to the evidence, be an overall redundancy situation but the cause and effect approach requires that the employee’s own job must be affected (Elbay v Iona National Airways Ltd [1993] ELR 166). It is worth noting that the Tribunal effectively constructed the date of dismissal as the date the employee received the email.

Employers must be absolutely clear that any purported termination of employment while the employee is on protective leave will automatically be void. Employers must also be conscious of always acting in a manner that is procedurally and objectively fair in order to prevent potential constructive dismissal claims.