COMPLIANCE
How to award pay rises during maternity leave
E mployers need to be aware of the Alabaster ruling when employees are on maternity leave and have been awarded a pay increase. This could be anytime between the start of the eight-week ‘relevant period’ for calculating statutory maternity pay (SMP) and the end of the individual’s statutory maternity leave. The CIPP’s Advisory Service receives regular questions around this ruling and what pay must be considered. In this article, I will cover the history of the Alabaster case, give a whistlestop tour of how to calculate SMP and provide a working example of how to recalculate it using the ruling. Rest assured, if you can calculate SMP, you can carry out an Alabaster recalculation! Case law overview Mrs Michelle Alabaster was employed by Barclays Bank (Woolwich Plc) between 1987 and 1996, taking a period of maternity leave from January 1996. Alabaster received a pay increase which took effect from 1 December 1995. She went on maternity leave on 8 January 1996 and chose not to return to Barclays, ending her employment on 23 August 1996. Alabaster took her employer to an employment tribunal in January 1997 on the grounds that it failed to reflect the salary increase in her maternity pay. This was a breach of the Equal Pay Act and European law, although Barclays had compliantly calculated her SMP based on the SMP regulations. Fast forward to 2004, where the European Court of Justice found that the SMP regulations didn’t implement European Union (EU) law, and consequently, The Statutory Maternity Pay (General) Regulations 1986 were amended. (Regulation 21 (7) was added in 2005, and can be found here: https://ow.ly/ O9RL50RPhSF). And here we are today. Who gets SMP? To qualify for SMP, the individual must be an employee and: l be on the payroll in the ‘qualifying week’ – the 15th week before the
Samantha O’Sullivan ChMCIPPdip, CIPP policy and advisory lead, reviews the Alabaster ruling and highlights everything you need to know about it
expected week of childbirth l give the sufficient notice
l give an employer proof they’re pregnant l have been continuously employed by the employer for at least 26 weeks up to any day in the qualifying week
| Professional in Payroll, Pensions and Reward | July - August 2024 | Issue 102 24
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