Redundacy pay and parental leave

14th June 2019

Redundacy pay and parental leave

The Court of Justice of the European Union (ECJ) has considered the effect of parental leave on redundancy payments. RE v Praxair is a French case. In the UK, parental leave must be taken in whole weeks, but in France 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 during which she was working 4 days a week instead of 5. Her redundancy pay was calculated using her reduced salary for the 4-day week, instead of her normal pay. The ECJ said that the employer should have calculated redundancy pay based on her normal earnings. It said that if reductions were allowed, it might discourage workers from taking parental leave. Furthermore, it might encourage employers to dismiss employees on parental leave in preference to others, which would defeat the purpose of parental leave.

Why is this case relevant in the UK? Because the case confirms that any benefits like redundancy pay and holiday pay need to be calculated using normal salary. Employers should ensure that any staff dealing with this type of calculation are suitably trained on these issues.

For more information on redundancy and parental leave, contact Andrew West on 01473 298102 or email andrew.west@gotelee.co.uk.

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