Mothers win pay boost with new maternity pay rules

New regulations, which came into force on Wednesday, have changed the rules for calculating statutory maternity pay in favour of mothers and could cause problems for employers, according to legal experts.

Under the new regime employers must recalculate maternity pay levels if a pay rise comes into effect at any time between the start of the pay calculation period and the end of maternity leave.

The calculation period for maternity pay ends 14 weeks before the baby’s due date and takes into account the mother’s earnings in the previous eight weeks.

The regulations follow a judgement in the case of Alabaster v Woolwich plc by the European Court of Justice (ECJ) in March 2004. The ECJ held that failing to give effect to a pay rise awarded while the mother was on maternity leave contravened the equal treatment principles enshrined in European law.

The English Court of Appeal will decide later this year whether the new regulations will only affect those receiving maternity benefits after 6 April 2005, or whether they are to apply retrospectively.

Charles Russell employment lawyer, Gabriella Wright, said: “These regulations correct what could be viewed as an injustice in the previous system. But the changes will be yet another administrative hassle for employers and the implications for employers will be significant if the Court of Appeal decides that the regulations should apply retrospectively.”

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