Redundancy pay and parental leave

10 June 2019

The Court of Justice of the European Union (ECJ) has recently looked at parental leave and its effect on redundancy payments.

RE v Praxair is a French case. Although in the UK, parental leave must be taken in whole weeks, French employees can take part-time parental leave and use it to reduce their weekly hours of work for a certain period.

In RE v Praxair, the employee was dismissed following a period of part time parental leave where she was working 4 days a week instead of 5 (she took the fifth day off as parental leave). Her redundancy pay was calculated using her reduced salary for the 4-day week, rather than her normal pay. The ECJ said that the employer should have ignored any reduction in pay due to parental leave when calculating redundancy pay. If reductions were allowed, it might discourage workers from taking parental leave at all, and it might encourage an employer to dismiss someone on parental leave over other employees. This would defeat the purpose of parental leave, which is supposed to make it easier for employees to juggle work and family life. The ECJ said that the employee's redundancy payments should have been calculated using her normal salary.

Why is this case relevant in the UK if we don't have part time parental leave? Because the case confirms that any benefits like redundancy pay and holiday pay need to be calculated using normal salary, ignoring any periods of parental leave where pay is reduced or stopped. Employers should ensure that any staff dealing with this type of calculation are suitably trained on these issues.

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