Upon having a baby, eligible parents are entitled to paid leave. The first two weeks must be taken by the mother (four weeks if she works in a factory), the remainder may be shared with her partner. This essential period allows them to look after the new arrival, bond and adjust to a new sleepless life! During this time, they have enhanced employment rights. Although simple in principle, in practice employers have found maternity leave complex and difficult to get right. Here are just a few examples of why tribunals handle so many maternity and pregnancy discrimination cases year in, year out.
Maternity leave, aside from providing eligible new mothers with their statutory right to leave and maternity pay, ensures that the terms and conditions of their contract of employment remain in place (except for salary). The breaking of those terms and conditions is, in many cases, the catalyst that could take you to an employment tribunal.
For instance, in an on-going case, an employee on maternity leave is fighting to retain her car allowance under the notion that it was an agreed benefit in her terms and conditions upon joining. However, the employers argue that the car allowance is a cash benefit, acting as a salary rise and accountable to higher national insurance contributions (a view shared by HMRC in their guidance). The outcome is yet to be decided. So is a car allowance part of salary (which the majority of employers believe) or a benefit like healthcare, in which case it should be paid? It’s an interesting question and a grey area to be resolved, so make sure you’re signed up to our newsletter and keeping an eye on our blogs to stay updated.
Another key maternity blunder to avoid is calculating maternity pay incorrectly – it’s based upon average weekly earnings before tax. What about those who are primarily rewarded in commission? This is an important question to address for the first six weeks of maternity leave, where 90% of average weekly earnings are payable. Average weekly earnings should include the rate of commission that the employee would expect to receive should they be in full time employment, before tax. Failure to include commission could land employers in trouble.
In another damaging case, an employer was found guilty of pregnancy discrimination for refusing to admit a pregnant employee to the childcare vouchers scheme. Employees’ memberships to the scheme were suspended during maternity, paternity and sick leave. As the employee was no longer entitled to the benefit whilst on maternity leave, an employment tribunal deemed discrimination had taken place, awarding the mother-to-be £5,361. Check out the full story here.
The above is just a flavour of the cost of getting maternity wrong. It’s expensive! And there are other things to consider too, such as managing re-entry to the workplace and establishing suitable cover whilst they’re away. These are all things that The HR Dept can help you with, so get in touch.