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Maternity entitlements and responsibilities: a guide. Babies due on or after 1 April 2007 - Part 2

URN No: 08/816/B

5. Maternity Leave
6. Statutory Maternity Pay and Maternity Allowance

Maternity Leave

All pregnant employees are entitled to 52 weeks’ maternity leave – or as much of that period as they wish to take – no matter how long they have worked for their employer. The purpose of maternity leave is to allow the mother to give birth and to recover from giving birth to her baby, as well as to bond with and care for her new child.

While it is up to employees to decide how much maternity leave they wish to take, up to the 52 weeks’ maximum, the law requires that a minimum of two weeks’ leave must be taken, or four weeks if the woman works in a factory. This is known as compulsory maternity leave.

While the new legislation introduced in 2006, applying to women whose expected week of childbirth begins on or after 1 April 2007, means that all women, regardless of their length of service, are entitled to up to 52 weeks’ maternity leave, the two distinct types of maternity leave remain as before. These are Ordinary Maternity Leave and Additional Maternity Leave.

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Notice Requirements

The notice an employee must give her employer of her intention to take maternity leave, and arrangements for doing so, as well as notice requirements for changing the dates of return from maternity leave, are covered in the section on 'Keeping in Touch, Planning Ahead and Notice Periods'.

Contractual Rights to Maternity Leave

If an employee has a contractual right to maternity leave in addition to the statutory right set out in this guidance, she may take advantage of whichever is the most favourable to her.

ORDINARY MATERNITY LEAVE

Ordinary Maternity Leave lasts for 26 weeks and may begin at a time of the woman’s choosing, any time from 11 weeks before the expected week of birth up until the birth itself.    If the employee is absent from work due to a pregnancy-related reason after the beginning of the fourth week before the expected week of childbirth, but before the date she has notified, the maternity leave period begins automatically on the day after the first day of her absence.

ADDITIONAL MATERNITY LEAVE

Additional Maternity Leave lasts for 26 weeks and, if taken, must follow immediately after Ordinary Maternity Leave. There cannot be a gap between the two types of maternity leave.

Contract of employment during Ordinary and Additional Maternity Leave

The contract of employment continues throughout the 52 weeks of Ordinary and Additional Maternity Leave, unless either the employer or employee expressly ends it or it expires.

It is unlawful to select a woman for redundancy or terminate her contract solely or principally because she is pregnant or on maternity leave. Any redundancy must follow the correct procedures (see guidance on redundancy arrangements for more information).

During Ordinary Maternity Leave an employee has a statutory right to continue to benefit from the terms and conditions of employment which would have applied to her had she been at work instead of on leave except for the terms providing for her wages or salary.  For women whose expected week of childbirth is on or after 5 October 2008, this right will continue throughout Ordinary and Additional Maternity leave. Whether a bonus is payable to an employee on maternity leave depends on the type of bonus and the terms of the particular bonus scheme.

Examples of contractual terms and conditions that will continue to apply during Maternity Leave might include, for example: gym membership; participation in share schemes; reimbursement of professional subscriptions; the use of a company car or mobile phone (unless provided for business use only); and other benefits such as health club membership.

However, if the employee does any of the limited amount of work allowed during maternity leave she should receive contractual pay, the detail depending on the agreement she reaches with her employer over the amount and nature of the work (see “Keeping in Touch Days” – see Keeping in Touch, Planning Ahead and Notice Periods).

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Contract of Employment during Additional Maternity Leave

For women whose expected week of childbirth is before 5 October 2008, the minimum terms and conditions of the employment contract which apply (Subject to any contractual agreement to the contrary) during Additional Maternity Leave are those set out below:

• The employee is entitled to benefit from her employer’s implied obligation to her of trust and confidence;
• She is bound by her implied obligation to her employer of good faith;
• The employee is bound by any terms in her contract relating to:

- disclosure of confidential information;
- acceptance of gifts or other benefits;
- participation in any other business

• She is entitled to receive whatever period of notice her contract provides for if her employment is terminated (an employee who is pregnant or on maternity leave is protected from dismissal which is wholly or partly related to her pregnancy or maternity leave);
• She must giver her employer the notice provided for by her contract of employment if she is terminating her contract;
• She is entitled to any contractual rights to compensation and statutory redundancy pay if she is made redundant;
• Any terms and conditions in the contract of employment relating to disciplinary or grievance procedures will continue to apply.

The continuation of any other terms and conditions is a matter for negotiation and agreement between the employer and employee (or their representatives). Employers should, however, ensure that they are acting lawfully under the Equal Pay Act 1970 and the Sex Discrimination Act (both are links to Government Equalities Office website) as well as the Employment Equality (Age) Regulations 2006.

Continuous Employment

During her Ordinary Maternity Leave period a woman continues to be employed. This means that this period counts towards her period of continuous employment for the purposes of entitlement to other statutory employment rights (for example, the right to a redundancy payment). It also counts for assessing seniority, and other personal length-of-service payments, such as pay increments under her contract of employment. For women whose expected week of childbirth is on or after 5 October 2008, this right will continue throughout Ordinary and Additional Maternity leave.

However, for women whose expected week of childbirth is before 5 October 2008, the Additional Maternity Leave period is not required to be counted for the purpose of calculating payments based on an individual employee’s length of service – such as pension rights and pay increases linked to length of service (unless the contract of employment provides for service to accrue during Additional Maternity Leave for the purposes of contractual benefits). In these circumstances the period of employment before the start of Additional Maternity Leave will be ‘joined up’ with the period of employment on her return to work as if they were continuous.

Employers should, of course, ensure that they are acting lawfully under the Equal Pay Act 1970 and the Sex Discrimination Act (both are links to Government Equalities Office website)

Guidance on the accrual of annual leave during both Ordinary and Additional Maternity leave is provided at the end of this section.

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OCCUPATIONAL PENSION SCHEMES DURING ORDINARY AND ADDITIONAL MATERNITY LEAVE

Employer Contributions

During any period of ‘paid maternity leave’ – regardless of whether this is Ordinary or Additional Maternity Leave – an employer’s pension contribution should be calculated as if the woman is working normally and receiving the normal remuneration for doing so. ‘Paid Maternity Leave’ is when the employee is receiving Statutory Maternity Pay or contractual (occupational) maternity pay, or a combination of both. In other words, if an employee takes 26 weeks of Ordinary Maternity Leave followed by thirteen weeks of Additional Maternity Leave, returning to work when the period of Statutory Maternity Pay comes to an end (see Statutory Maternity Pay and Maternity Allowance), the pension contributions the employer makes should continue throughout the whole period as though the woman was working normally and had taken no maternity leave at all. However, if, rather than returning to work when the period of paid maternity leave came to an end, and employee remains on leave and uses up the rest of her Additional Maternity Leave and is not paid for these final 13 weeks, the employer need not continue the pension contributions during the unpaid leave unless the contract of employment provides otherwise.

Employee Contributions

If the rules of the pension scheme require the employee to contribute towards her occupational pension, her contributions should be based on the amount of pay she receives during the maternity leave period – whether Statutory Maternity Pay, contractual pay, or a combination of both.
Further information on occupational pensions is provided by the Pensions Service (links to Pensions Service website).

ANNUAL LEAVE AND MATERNITY LEAVE

Employees on maternity leave retain their entitlement to statutory annual leave throughout ordinary and additional maternity leave. If the employee is also entitled to contractual annual leave (that is, annual leave that is provided by her contract, on top the statutory minimum provided by law) she will continue to accrue this additional, contractual entitlement during Ordinary Maternity Leave. Women whose expected week of childbirth is on or after 5October 2008 will continue to accrue contractual annual leave during Additional Maternity leave.  However, women whose child is expected before this date will not continue accruing contractual annual leave during Additional Maternity Leave unless she has agreed otherwise with her employer.

It is not possible for an employee to take annual leave at the same time as maternity leave. It will, though, usually be possible for an employee to use any untaken annual leave either before she starts her maternity leave, or once her maternity leave has finished.

She could, for example, agree with her employer that she will take two weeks’ annual leave immediately before starting maternity leave. This would mean that her last day at work before maternity leave was actually two weeks before her maternity leave began.  It should be remembered, though, that if the baby is born early the maternity leave must start from that point.

Employers and employees will often find it useful, once the woman has given notice that she is pregnant, to incorporate annual leave arrangements into their planning. This is particularly important if the employee plans to take a whole year’s maternity leave, as it is not possible to carry over statutory annual leave from one leave year to the next, or to pay the employee in lieu of any untaken statutory annual leave unless the contract is terminated. It is, of course, up to the employer and the employee to agree between them whether to carry over or provide pay in lieu of any untaken contractual annual leave above the statutory minimum.

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Return to Work before, or at the end of, Ordinary Maternity Leave

When a woman returns to work from Ordinary Maternity Leave she has a right to return to the same job on the same terms and conditions as before her leave began. See Return to Work After Maternity Leave.

She is entitled to benefit from any general improvements to the rate of pay, or other terms and conditions, which may have been introduced for her grade or class of work while she was away, as if she hadn’t been away. If a pay rise has been awarded during maternity leave, and, but for her absence she would have received it, her employer should have recalculated her SMP.  More detailed advice is provided by DWP.

Return to Work before or at the end of Additional Maternity Leave.

An employee who returns to work after Additional Maternity Leave – in other words a woman who has taken more than 26 weeks’ maternity leave – is entitled to return to the same job on the same terms and conditions of employment as if she had not been absent, unless there is a reason why it is not reasonably practicable for her to return to her old job, in which case she should be offered a similar job on terms and conditions which are not less favourable than her original job.

It is good practice for employers to consult with mothers about any proposed changes to their job at the end of their maternity leave if it is possible to do so.

REDUNDANCY DURING MATERNITY LEAVE

If a redundancy situation arises at any stage during an employee’s maternity leave which means it is not practicable for the employer to continue to employ her under her original contract of employment, she is entitled to be offered (before that contract ends) a suitable alternative vacancy, where one is available. This includes a vacancy with an associated employer or with a successor to the original employer.

The new contract must take effect immediately on the ending of the original one and must be such that:

• the work to be done by the employee is both suitable and appropriate for her to do in the circumstances; and
• the capacity and place in which she is to be employed and the other terms and conditions of her employment are not substantially less favourable to her than if she had continued to be employed under the original contract.

It is unlawful for an employer to make an employee redundant during ordinary or additional maternity leave period without first complying with these requirements. An employee made redundant in these circumstances will have a claim for unfair dismissal and may also be able to claim sex discrimination. An employee who has been dismissed in this way should appeal against the dismissal as part of the requirement under the Statutory Dispute Resolution Procedures. Failure by employers or employees to use these statutory procedures could result in an increase or reduction to any compensation awarded. The Acas Code of Practice on disciplinary and grievance procedures sets out the statutory dispute resolution procedures that should be followed before an employee may, if the dispute is not resolved, complain to an Employment Tribunal. Employers and employees may also find the general Acas advice on dispute resolution helpful.

If the employer has a suitable alternative vacancy available but fails to offer it to the employee, the redundancy dismissal will be regarded as an unfair dismissal. If the employer offers the employee a suitable alternative vacancy (she is entitled to a four- week trial period in which to decide whether the employment is suitable, and this period may be extended beyond four weeks by written agreement) and she unreasonably refuses it, either before or during the trial period, she may forfeit her right to a redundancy payment.  Further guidance on unfair dismissal and redundancy is available from BERR.

Entitlements on redundancy during maternity leave

If an employee on ordinary or additional maternity leave is made redundant, her maternity leave period comes to an end. She is entitled to receive from her employer a written statement of the reasons for her dismissal, regardless of whether or not she has requested one, and regardless of her length of service. If her employer fails to provide a statement, or provides one that she considers to be inadequate or untrue, she may make a complaint to an employment tribunal, having first followed the Statutory Dispute Resolution Procedures  (see Acas Code of Practice on dispute resolution). The employee should also receive her normal notice entitlement, or pay in lieu of notice (further BERR guidance available).

The employee may also be entitled to a redundancy payment

The employee will still be entitled to Statutory Maternity Pay of up to 39 weeks once she has qualified for it.

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OTHER ENTITLEMENTS

There are a number of other statutory entitlements which employees or their partners may be able to take advantage of. Separate guidance is provided on each of these, but in summary, they include:

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Statutory Maternity Pay and Maternity Allowance

More detailed guidance on Statutory Maternity Pay and Maternity Allowance is available from the following sources:

Further advice and guidance for employees on Statutory Maternity Pay (links to DWP website) and Maternity Allowance (links to Jobcentre Plus website)

For advice for employers on administering Statutory Maternity Pay: HMRC’s statutory payments advice (links to HMRC website), including an online calculator to help employers calculate SMP payments

HMRC’s Employers’ Helpline can help employers work out the amount of SMP to pay and provide advice on how and when to pay it: 08457 143143

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Maternity entitlements and responsibilities: a guide. Babies due on or after 1 April 2007 - Part 3