SG Petch Ltd v English-Stewart

Where an employee is dismissed because the employer’s requirement for employees to carry out work of a particular kind has diminished, the dismissal is one for redundancy even if the work continues and is absorbed by fewer employees. A tribunal must then apply the redundancy-specific route in Regulation 20 of Maternity and Parental Leave Etc Regulations 1999.

A redundancy discovered while an employee is on maternity leave may be connected with that leave. Under Regulation 20(2), however, the tribunal must determine whether the redundancy circumstances applied equally to an undismissed employee holding a similar position, and whether maternity leave was the reason for selecting the employee.

The employer appealed against an Employment Tribunal decision which upheld claims of automatic unfair dismissal under section 99 of Employment Rights Act 1996 and Regulation 20 of Maternity and Parental Leave Etc Regulations 1999, and sex discrimination under section 3A of Sex Discrimination Act 1975.

During the claimant’s maternity leave, her managerial duties were absorbed by three colleagues. The employer concluded that the department required three employees rather than four and dismissed her for redundancy. The central issue was whether the Tribunal had applied the correct limb of Regulation 20 to that dismissal.

1. Appeal allowed and remitted. The Employment Tribunal’s findings established, or required it to find, a genuine redundancy. The employer’s requirement for employees in the department had diminished from four to three, and the claimant was not replaced. That conclusion followed the approach in McCrea v Cullen & Davison Ltd [1998] IRLR 30.

2. The Tribunal therefore erred in treating the case as one governed by Regulation 20(1)(a) of Maternity and Parental Leave Etc Regulations 1999. Where the reason for dismissal is redundancy, Regulation 20(1)(b) and 20(2) govern the automatic-unfair-dismissal question. The Tribunal had to determine the requirements in Regulation 20(2)(a), (b) and (c).

3. Regulation 20(2)(a) was satisfied. Regulation 20(2)(c) was also necessarily satisfied: the redundancy was discovered because the claimant was absent on maternity leave and her work had been absorbed by others. The provision requires a reason connected with maternity leave; it does not require proof that dismissal was because maternity leave was taken. On the facts found, the Tribunal could not lawfully find that the claimant was dismissed on the ground that she had taken maternity leave for the purposes of section 3A of Sex Discrimination Act 1975.

4. The unresolved issue was Regulation 20(2)(b): whether the redundancy circumstances applied equally to undismissed employees who held positions similar to the claimant’s. The Appeal Tribunal could not properly substitute either party’s proposed answer. It remitted that factual and evaluative issue to the same Tribunal.

5. The remitted hearing was also to determine the Polkey issue, namely whether the claimant would probably or inevitably have been dismissed in any event, and any resulting remedy.

• Employment Appeal Tribunal: appeal allowed; the automatic-unfair-dismissal and sex-discrimination conclusions were set aside and the Regulation 20(2)(b), Polkey and remedy issues remitted.
• Employment Tribunal, Newcastle-upon-Tyne: held that the claimant had been automatically unfairly dismissed under section 99 of Employment Rights Act 1996 and Regulation 20 of Maternity and Parental Leave Etc Regulations 1999, and subjected to sex discrimination under section 3A of Sex Discrimination Act 1975.