Reward
LoraMurphy ACIPP, CIPP senior policy liaison officer , provides a reminder of key issues
A n employee who is pregnant or has given birth is entitled to take 52 weeks of maternity leave (ML). The 52 weeks comprises 26 weeks of ordinary maternity leave (OML) and 26 weeks of additional maternity leave (AML); the latter beginning directly after OML ends. When a woman returns to work during the period of OML she is legally entitled to return to the job that she had prior to the period of ML. However, if she returns during the period of AML, and her employer cannot reasonably be expected to place her back into the same role, she can be offered a suitable alternative job on similar terms and conditions. An employee meeting the qualifying criteria may be entitled to be paid 39 weeks of statutory maternity pay (SMP). The first six weeks of which would be paid at 90% of her average weekly earnings, and the remaining 33 weeks paid at the lower of this amount or the statutory weekly rate of SMP. Organisations may offer more generous pay beyond SMP, usually referred to as ‘occupational maternity pay’ (OMP) or even ‘contractual maternity pay’ (CMP). Details relating to maternity pay should be confirmed within contracts of employment and reiterated in company policies. Benefits and rights Just as it is compulsory for businesses to ensure that they do not discriminate against women taking ML, the same rule applies to the area of rights and benefits. Female employees continue to accrue holiday entitlement throughout the duration of their ML, irrespective of whether they are paid or unpaid, and regardless of when they return to work. Employers must respect this right, which may mean that an employee can carry their holiday allowance from one leave year into the next, even if this contradicts
Act 2010 deem occupational pension schemes (which includes workplace schemes) to include a ‘maternity equality rule’ so that time when a woman is on ML is treated as though she were not taking such leave. This deeming applies to terms relating to scheme membership, accrual of scheme rights and determination of scheme benefits. As regards accruing scheme rights, a crucial implication is that the employer must maintain the woman’s pension rights by, for example, continuing employer pension contributions as if the woman was still at work (typically contributing not less than what was payable before the start of leave). This also applies to higher employer contributions arising under a salary sacrifice arrangement. However, the requirement does not apply to any period of unpaid AML. (Note that payment for a keeping-in-touch day renders the week in question as ‘paid leave’.) The employee, however, need only make pension contributions by reference to the amount of pay she receives during her leave, but she can choose to pay the contribution amount she would have paid before her ML began. ML and SShPL If a woman wishes to end her period of ML and start taking statutory shared parental leave (SShPL), she must complete a ‘binding notice’ confirming when her ML will end, which will curtail her right to SMP. She must take at least two weeks of ML (or four weeks if she works in a factory) prior to commencing SShPL. A maximum of 50 weeks of SShPL can be taken shared between the woman and another where certain conditions are met. There is a requirement to provide the employer with at least eight weeks’ notice before a period of SShPL commences. n
the contractual provisions. Some women may choose to add their accrued holiday leave to the end of their period of ML so that they can spend as much time as possible with their baby. Other employment rights are protected during ML, such as the entitlement to pay rises. Should an employee receive a rise in pay any time between the qualifying period and the end of the period of ML, then the ‘Alabaster ruling’ must be applied. ...confirmed within contracts of employment and reiterated in company policies Employers may request that benefits that are provided exclusively for company use, with no provision for personal use, are returned to the company during an employee’s ML; for example, a company car or a mobile phone. If, however, the benefit is provided for both business and personal use, then the employee should still have access to that benefit, meaning she could keep the company car or mobile phone whilst on ML. Anything provided that would be deemed a benefit-in-kind should still be provided to the employee during her period of ML in the same way as when she was at work. Guidance provided by GOV.UK, states: “All non-pay contractual benefits must continue during statutory maternity leave. These may include any childcare vouchers, company car or mobile phone provided to the employee as part of their contract of employment.”
Pensions The provisions of section 75 of the Equality
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| Professional in Payroll, Pensions and Reward |
Issue 58 | March 2020
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