Changes to maternity rights: overview

Abi Frederick of Lewis Silkin begins a series of articles on forthcoming changes to maternity rights with an overview.

Introduction

UK maternity laws are being amended to bring them into line with the European Equal Treatment Directive (2002/73/EC). The changes relate to non-pay benefits during maternity leave, the calculation of bonuses, and the issue of the comparator for bringing sex discrimination claims.

The impetus for change was the High Court decision in Equal Opportunities Commission v Secretary of State for Trade and Industry [2007] IRLR 327 HC. The High Court agreed with the then Equal Opportunities Commission that the Government had, in certain respects, failed to implement the Directive properly into domestic law. The Government's response was to amend certain relevant provisions in the Sex Discrimination Act 1975. It also intends to amend the Maternity and Parental Leave etc Regulations 1999, although these amendments have not yet been published. The changes to the 1975 Act came into force on 6 April 2008. However, other than the removal of the need for a comparator (see below), they apply to women whose expected week of childbirth (EWC) begins on or after 5 October 2008.

No need for a comparator in discrimination claims

The High Court decision required the Government to remove from the sex discrimination legislation the need for claimants to identify a comparator in pregnancy or maternity discrimination claims. No such requirement exists under European law. Previously, s.3A of the Sex Discrimination Act 1975 required a woman to show that she had been treated less favourably than she would have been treated had she not become pregnant or taken maternity leave. She had to compare her treatment to that of a hypothetical comparator who was not pregnant, or who had not taken maternity leave. As of 6 April 2008, when the legislative change came into effect, a woman who is pregnant or taking maternity leave has to show only that she has been treated less favourably and that the grounds for the less favourable treatment were her pregnancy or the fact that she has exercised her maternity leave rights.

Non-pay benefits during ordinary and additional maternity leave

The High Court also held that there should be no distinction between ordinary maternity leave (OML) and additional maternity leave (AML) in terms of a woman's right to continue to receive her non-remuneration terms and conditions of employment. A woman currently on maternity leave is entitled to the benefit of all non-remuneration terms and conditions of employment during OML, whereas during AML she has the benefit of only a limited range of terms. These are related to notice, compensation in the event of redundancy, disciplinary and grievance procedures, membership of a pension scheme, and the implied term of trust and confidence.

In line with this, s.6A of the Sex Discrimination Act 1975 excluded nearly all discrimination claims in relation to bonuses and conditions during the AML period. The recent amendments to the Act will allow women with an EWC that begins on or after 5 October 2008 to bring sex discrimination claims in relation to non-remuneration benefits during the AML period in the same way as those in relation to the OML period. Such women will, therefore, be entitled to the same non-remuneration benefits during AML as during OML. Examples of such benefits include life assurance, private health insurance, gym subsidy, and private use of a company car or mobile phone. Any contractual element of annual leave, in excess of the statutory minimum, will also accrue during AML as well as OML. (The statutory minimum annual leave entitlement already accrues during OML and AML.)

Consequential amendments will have to be made to the Maternity and Parental Leave etc Regulations 1999 to reflect and confirm this new position in relation to non-pay benefits, although these amendments have not yet been published.

In relation to occupational pension contributions, social security legislation requires employers to continue to make the usual contributions for the whole time that employees are receiving statutory or contractual maternity pay from them. There is some debate as to whether pension contributions properly fall to be considered as non-remuneration benefits and therefore payable throughout AML under the recent changes, or as part of remuneration, which need not be continued during maternity leave. It is understood that the view of the Department for Business, Enterprise and Regulatory Reform is that pension contributions form part of remuneration and need not continue into unpaid AML as a result of the amendments to the 1975 Act. Amendments to the Maternity and Parental Leave etc Regulations 1999 are awaited, but it is unlikely that these will provide further clarification on this issue.

Calculation of bonuses

The High Court decision has also led to changes in the legislation relating to bonuses connected with periods of compulsory maternity leave (although the new position on bonuses has already been established through case law (Lewen v Denda [2000] IRLR 67 ECJ and Hoyland v Asda Stores Ltd [2006] IRLR 468 CS). Employers will need to ensure that any discretionary bonus takes full account of periods during which a woman was at work or on compulsory maternity leave, which is the two-week period after childbirth during which work is prohibited.

Employers should check bonus schemes and the method of calculating bonuses, to ensure that full credit is given for any period during which an employee was at work and that the period of compulsory maternity leave is treated for these purposes as if it was a period during which the employee was working.

Policies and procedures

The removal of the need for a comparator to bring a sex discrimination claim is unlikely to have a great practical impact on employers, and policies and procedures will need to be amended only if they set out the law in this area.

With regard to non-pay benefits, employers should check maternity policies and make changes as necessary. Many employers' maternity policies state that women are not entitled to receive their non-pay benefits while they are on AML. For women whose EWC begins on or after 5 October 2008 all non-pay benefits must continue throughout OML and AML and maternity policies will need to be amended to reflect this. See Maternity rights: Company maternity policy (employees with an expected week of childbirth beginning on or after 5 October 2008) for a model maternity policy from XpertHR's policies and documents service.

Abi Frederick (Abi.Frederick@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.