Ordinary Maternity Leave (OML) – The first 26 weeks
• All contractual rights continue during OML, apart from the right to remuneration. So, subject to the employee’s contract, she is not entitled to be paid salary during this period.
• However, a female employee is entitled to statutory maternity pay provided that she has been employed for a continuous period of at least 26 weeks at the 15th week before the expected week of childbirth, and her normal weekly earnings are not less than the lower earnings limit (currently £79 per week). Statutory maternity pay is 90% of normal weekly earnings for the first 6 weeks and then 20 weeks at the lesser of £106 per week or 90% of normal weekly earnings.
Those without 26 weeks’ service are not entitled to any statutory maternity pay. However, they may qualify for Maternity Allowance of £106 per week, which is available from Jobcentre Plus.
• Contractual and statutory holiday will continue to accrue.
• Whether or not an employee is entitled to bonus payment during maternity leave and, if so, how much, is complicated and uncertain. The law on bonuses depends on the type of bonus given, and the provisions in the employment contract or handbook. For example, where an employer awards Christmas bonuses based on both individual and company performance, it is likely to constitute direct and also unjustifiable indirect sex discrimination (and, if the bonus is contractual, a breach of the Equal Pay Act) to exclude a woman from receiving the Christmas bonus simply because she has been on maternity leave.
However, there is case law to suggest that if an employer wishes to award a one-off bonus for some specific project, in which a woman has not participated during maternity leave, it is permissible not to pay her the bonus provided it is absolutely clear that the bonus is for that project, and nothing else. In that context, the employer would have to show that a loyalty bonus scheme was something quite separate from the contract of employment. Also, the EAT has recently decided in Hoyland v Asda Stores Ltd that an employer is entitled to pro-rate bonuses which reflect general contribution to a business’s success. Such bonuses can be pro-rated to reflect the period that an employee has been absent from work on maternity leave (OML and AML), save in respect of the two week period of compulsory maternity leave which must be paid in full.
• The right to keep a company car continues. It is unclear whether or not a car allowance falls within the definition of “remuneration”, but we find that employers generally play safe and continue paying car allowance as a contractual benefit, rather than as remuneration.
• Company pension contributions should continue during OML. Employee contributions should be based on her level of maternity pay.
• Insurances, such as private health insurance and dental insurance, must continue.
• Other incentives, such as gym membership, must be maintained.
• Continuous employment, length of service and pensionable employment all continue to accrue.
Additional Maternity Leave (AML) – The second 26 weeks
• Subject to the employee’s contract, the employee is not entitled to be paid salary during this period.
• Statutory entitlement to paid annual leave (four weeks per year including bank holidays) continues to accrue. Contractual holiday may also continue to accrue if this is provided for in the employee’s contract or the staff handbook. The employer can serve notice on the employee, requiring her to take statutory holiday under the Working Time Regulations 1998. By requiring the employee to take her statutory holiday entitlement during maternity, she is prevented from taking that holiday on returning from maternity leave. You could not use the same mechanism with contractual holiday, unless the handbook/contract allows it.
• Subject to the employee’s contract, there is no obligation to provide a company car, mobile phone or pay car allowance. However, depriving an employee of her mobile phone or car during AML may appear mean and ungenerous and not encourage the employee to return to work. One way round this may be to allow her to use the mobile phone/car but not to pay maintenance costs during maternity leave.
• Providing that the employer is not contractually obliged to continue benefits during any period of AML, there is no obligation on the employer to make pension contributions during AML. The employee need not make any contributions. Pensionable service does not accrue during AML.
• AML does count towards statutory continuous employment.
Notification Requests on Return
• There is no need for an employee to serve notice that she intends to take AML – it is an automatic right (provided she has the requisite service of 26 weeks continuous employment by the 15th week before the expected week of confinement) which starts at the end of OML.
• On the expiry of AML, the employee does not have to serve notice of her intention to return to work.
• Notice is only due where the employee intends to return from work earlier than her entitlement:
o before the expiry of OML;
o before the expiry of AML; or
o on the expiry of OML and without taking AML.
• Do invite her to company social events, such as the Christmas or Summer parties.
• Do keep her on lists – such as phone lists, distribution lists etc.
• Do keep the employee up to date with business developments, including arrivals and departures, but take care not to bombard her with information. Send copies of internal company magazines or newsletters.
• Do consult with her regarding any change to the handbook.
• Do consider her for pay rises during salary review, even if any increase will not take effect until she returns from maternity leave. Statutory maternity pay should be calculated by including any pay rises.
• Do consult about the level of contact she wants with the employer.
• Do offer to provide senior employees with laptops/home internet connection, etc.
• Don’t phone her regularly asking her if or when she will be returning to work.