Pregnant staff and sex discrimination

Q One of my staff only started work here a few weeks ago, and now she tells me she is pregnant. Do I have to give her time off and pay her too?

A Regardless of their length of service, pregnant employees who give proper notification to their employers are entitled to at least 26 weeks’ maternity leave.

Only those with at least 26 weeks’ continuous service and who have made sufficient national insurance contributions by the 15th week before their due date are entitled to statutory maternity pay (SMP) during the leave period. Others can apply for maternity allowance from a Social Security or Jobcentre Plus office.

SMP is split into two parts. The payments for the first six weeks are earnings-related (90 per cent of average weekly earnings), and the remaining 20 weeks drop to a flat rate of £100 per week if that is lower. Employers can deduct at least 92 per cent of the SMP they have to pay out from their next payment of PAYE and national insurance.

Q An employee is about to start maternity leave and her SMP has all been worked out. The company has just announced pay rises that would benefit her if she were here. Do I have to increase her maternity pay?

A No. According to UK law, a pregnant employee’s average weekly earnings for the purposes of SMP is to be calculated over the period between 14 and 22 weeks before the expected week of childbirth. However, a recent ruling from the European Court of Justice has left thousands of UK employers facing the prospect of claims for extra maternity pay.

In Alabaster v Woolwich plc (Case C-147/02), the European Court found that maternity pay should reflect any increase that would have been received if the employee had been at work, even if it falls outside the relevant period prescribed by UK law.

While she is not entitled to the same level of pay as her colleagues, an employee on maternity leave is entitled to an amount of SMP that accurately recognises the pay she would be getting if she had been at work. Therefore, the calculation should include the increase, but UK law does not require this yet. To deny her this would be sex discrimination. Employers should consider making financial provision for claims by such employees in case they bring claims as a result of the Alabaster ruling. In any event, it is unlikely to be too long before the UK Government changes the rules to comply with that ruling.

Q Business has been bad this year, and everyone has had to take a pay cut. Is it okay to reduce the maternity pay we’re giving out to employees still on leave?

A The European Court would not rule on exactly how pay rises should be factored into SMP, or whether salary decreases in the same period should also be taken into account. This is a matter for the UK Government, and now it will have to decide urgently what employers should do.

It is difficult to see what claim a pregnant employee could bring if decreases are made across the board, as current UK law does not provide for a reduction to affect those on maternity leave unless it falls within the reference period.

If a pay reduction was made while a female employee was off on leave, on her return to work and receipt of her reduced salary, she might argue that she had been discriminated against.

Remember that any negative treatment during maternity leave or pregnancy can amount to discrimination. It is also important to consult with the employee on maternity leave about a proposed pay reduction in the same way as you would do with the those who are still present.

Q One of my employees tells me she should have received more maternity pay when she was on leave with her first child, as everyone else in the company got pay rises while she was off. That was almost 10 years ago. Surely she can’t claim more money now?

A Claims could go as far back as 1975, when the Sex Discrimination Act established the notion of equal treatment in the workplace. This is a potential nightmare for employers, particularly where records are sparse. In the worst case scenario for employers, women who remain with the same organisation, or who left their job less than six months before making a tribunal application, could potentially claim in respect of any discrimination since the 1975 Act was introduced.

However, the courts may decide to restrict claims by only allowing them to go back five years in Scotland, and six years in England and Wales. A decision is awaited.

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