Navigating Layoffs and Maternity Leave: How Should HR Handle This Delicate Situation?

Handling Layoffs and Maternity Leave

Please advise me on how to handle the situation. We are shutting down one business unit due to low sales, and consequently, we are laying off the staff of that unit by giving them notice as per their employment contracts. There is a female staff member who is pregnant and expecting delivery in February 2020. Officially, she has not declared her pregnancy, and she is likely planning to take maternity leave sometime in December or January.

Unfortunately, we do not have any available positions in the organization where her skills can be utilized; otherwise, she could have been absorbed. Given the stringent nature of the maternity act and the sensitivity of the matter, please advise on whether her service can be terminated or retained, despite the lack of available work for her.

Regards,
HR buff

My advice would be to pay her the 6 months of maternity leave and then deal with whether there is any open position for her or not after she returns from her maternity leave. Though she has not officially declared her intent to proceed on maternity leave, your post here confirms that you are aware that she is pregnant and hence the possibility for her to proceed on maternity leave. Who knows where all this information may be available and who all may be willing to testify for her, especially when you are bound to have disgruntled employees in the event of a layoff.

Dear HR Buff,

First and foremost, I recommend using the correct terminology in your post. Due to the reduction in business, if you are required to reduce staff strength, it is called "retrenchment" and not "lay off."

Maternity Leave Considerations

Now, regarding the maternity leave of a woman employee: On the day her maternity leave starts, will your business unit be operational or not? If not, then you may not need to provide her with maternity benefits. If there is no business activity in the unit where she is employed, how can she be eligible to draw her salary? Please note that "salary" is not disbursed just because someone is at work. Employees receive their salary even when they are on leave.

Scenario of Business Unit Closure

Imagine a situation where a woman employee is on maternity leave, and the business unit is closed during her leave. After the closure, should she continue to receive maternity benefits? Certainly not!

I have provided my opinions based on general knowledge. However, I do not know of any case law to quote.

You mentioned the closure of the "business unit." When you say business unit, does it mean an independent business entity or just a section or department of a larger unit?

Thanks,
Dinesh Divekar