Changes to maternity rights: frequently asked questions
Rebecca Jobling of Lewis Silkin concludes a series of articles on changes to maternity rights with some frequently asked questions.
Which legislation has been amended and why?
The Sex Discrimination Act 1975 has been amended by the Sex Discrimination Act 1975 (Amendment) Regulations 2008. The changes have been made in response to the High Court ruling in Equal Opportunities Commission v Secretary of State for Trade and Industry [2007] IRLR 327 HC that the European Equal Treatment Directive (2002/73/EC) had not been properly implemented in domestic law.
What changes have been made to maternity rights?
There are two key changes relating to maternity rights. For those employees caught by the changes, there will be no distinction between the types of discrimination claims that can be brought in respect of ordinary maternity leave (OML) and additional maternity leave (AML). Previously, most discrimination claims relating to terms and conditions of employment during AML were excluded by the 1975 Act. Following the amendment, affected women will be able to bring sex discrimination claims in relation to non-remuneration benefits during AML as well as during OML. Therefore the benefits provided during AML must be consistent with those provided during OML. The Maternity and Parental Leave etc Regulations 1999 are due to be amended to reflect these changes.
In relation to bringing sex discrimination claims, it is no longer necessary for there to be a comparator, for a woman to bring a claim of pregnancy- or maternity-related sex discrimination. She must simply demonstrate less favourable treatment on the grounds of pregnancy or exercising her right to take maternity leave.
When do these changes take effect?
The changes came into force on 6 April 2008, but the provisions relating to benefits during AML apply to employees with an expected week of childbirth (EWC) that begins on or after 5 October 2008.
Terms and conditions of employment
Do these changes affect the terms and conditions that apply during OML?
No. There is no change to the position that during OML an employee has the right to the terms and conditions that would have applied had she been at work. This excludes terms and conditions relating to remuneration.
Do these changes affect the terms and conditions that apply during AML?
Currently, contractual entitlements during AML are much more limited than those during OML. Although the contract continues in existence, employees have the continuing benefit of only a limited number of terms, for example the obligation of mutual trust and confidence and terms and conditions relating to disciplinary and grievance procedures, notice and redundancy. However, employees with an EWC that begins on or after 5 October 2008 will be able to enforce their full range of benefits, apart from pay, during AML. This means the same terms will apply during OML and AML.
What will the practical effect of this change be?
During the whole of her maternity leave a woman must be provided with all contractual or discretionary benefits, apart from remuneration. For example, life assurance, private health insurance, health club membership and participation in a share scheme must continue during this period.
What about a company car?
This depends on how the employee is permitted to use the car. If it is restricted to business use then it is not a benefit and there is no need for it to be available during OML or AML. However, if it is provided for personal use, the car will have to be provided throughout the full maternity leave period.
How does the change affect how holiday entitlement accrues during maternity leave?
Women with an EWC prior to 5 October 2008 accrue only statutory holiday during AML (currently 24 days' holiday a year including bank holidays, based on a five-day week). However, where the EWC begins on or after 5 October 2008, contractual holiday will also accrue during AML. If this exceeds the statutory minimum the greater amount must accrue.
Are pension contributions affected?
Contributions into an occupational pension scheme must continue to be made for all women who are on paid maternity leave, whether the maternity pay is statutory or contractual or a combination of the two (para.5 of Sch.5 of the Social Security Act 1989). However, the situation after maternity pay ends is uncertain.
It is understood that the view of the Department for Business, Enterprise and Regulatory Reform (DBERR) is that pension contributions constitute remuneration and therefore employers do not need to continue paying them beyond the period of paid maternity leave. The changes to the maternity legislation make it possible for discrimination claims to be brought in relation to non-remuneration benefits only, during AML. Therefore, the changes should not affect pensions.
However, the position is not necessarily this clear. The 1999 Regulations define "remuneration" as "sums payable to an employee by way of wages or salary". Pension contributions are usually distinct from salary and could be seen as a non-remuneration benefit, in which case they would fall to be payable during AML. The DBERR's position is that pension rights will not be extended through AML, but it seems that some clarification on this issue may be needed in the future.
How will the change affect bonuses?
There is a specific change to the rules concerning discretionary bonuses. Currently, in some circumstances, bonus payments can be reduced pro-rata, to take account of time spent on maternity leave. However, the amendment under the 2008 Regulations means that the compulsory maternity leave period (the two weeks immediately following the birth) must be taken into account for bonus purposes.
What action could an employee take if we breach the requirements?
An employee who is deprived of her full entitlement to terms and conditions during maternity leave has the option of bringing a number of claims. The potential claims that she could bring are:
- unlawful deductions from wages (eg in respect of unpaid bonuses and accrued annual leave due if the contract ends);
- detrimental treatment under the Employment Rights Act 1996 and the 1999 Regulations;
- automatic unfair dismissal if a serious breach of contract results in a constructive dismissal;
- sex discrimination under the 1975 Act; and
- damages for breach of contract.
What action should we take to ensure that we do not breach these provisions?
Maternity policies should be reviewed and updated to reflect these changes. In particular any provisions that have the effect of differentiating between the benefits available to employees on OML and AML should be amended. Bonus schemes may also need to be amended to ensure that women on maternity leave will be given the benefit of the compulsory maternity leave period in the calculation of discretionary bonuses.
Discrimination
What changes have been made in relation to discrimination law?
In most discrimination claims, an employee needs to show that he or she was treated less favourably than another person whose relevant circumstances were the same or not materially different. The comparator may be real or hypothetical. Previously, in discrimination cases relating to pregnancy or maternity leave, an employee had to show that she was treated less favourably than she would have been treated had she not become pregnant or taken maternity leave.
Following the changes to the 1975 Act there is no longer a need for any form of comparator. A woman must show only that she was treated less favourably on the ground of her pregnancy, or on the ground that she took maternity leave. (See Changes to maternity rights: overview and Changes to maternity rights: case study 1 in this series for more details.)
Does this mean it is irrelevant how we treat other employees?
No. Evidence of how non-pregnant employees are treated, and any evidence of how the pregnant employee would have been treated had she not been pregnant, will be relevant. It is the formal requirement for a comparator that has been removed.
Next week's article will be an overview of the points-based tier system for employing foreign nationals and will be published on 7 July.
Rebecca Jobling (rebecca.jobling@lewissilkin.com) is an associate in the Employment and Incentives Department at Lewis Silkin.
Further information on Lewis Silkin can be accessed at www.lewissilkin.com.
