Maternity
- still more questions than answers
In
April 2003, in an attempt to simplify the rules on maternity
leave and pay, the
Government introduced changes to the maternity legislation.
Nevertheless,
maternity remains a complex area of employment law, and recent
decisions in the European Court of Justice (ECJ) and the Employment
Appeal
Tribunal (EAT) throw up more questions than answers.
This
article looks at the recent decisions of the ECJ and the EAT
and considers their impact on current employment practices.
Pay
rises
For the first
6 weeks of maternity leave, statutory maternity pay (SMP) is
paid at ‘higher rate’. This is calculated as 90% of
a woman’s normal weekly pay during the eight-week period
ending with the ‘qualifying week’ which is the 15th
week before the employee’s expected week of childbirth.
For
the rest of the ordinary maternity leave period, subject to
any higher contractually agreed level, it is paid at ‘lower
rate’, which is a flat rate, currently £102.80 per
week.
It
has long been established that if a woman is awarded a pay rise
whilst on maternity leave which is backdated to include the
eight-week period, then the woman’s normal weekly earnings
should be recalculated to reflect the backdated pay rise. What
happens, though, where the pay rise is not backdated?
This
question was referred to the ECJ by the Court of Appeal, in
the recent case of Alabaster v Woolwich plc. The ECJ held that
even though a pay rise is not backdated, all pay rises awarded
between the beginning of the eight-week period and the end of
maternity leave must be reflected in the calculation. However,
the ECJ declined to give any guidance as to how any pay rise
awarded before or during maternity leave should be factored
into the calculation, leaving this for the Government to decide.
This
leaves open such issues as when should an employer pay the recalculated
element of SMP to the employee and how should an employer recoup
it (as entitled to do) from the Inland Revenue? Also, what is
the position of employees who, prior to Alabaster, were given
pay rises that were not backdated, so not reflected in their
SMP? Do they now have a claim, or are they out of time?
It
may be that, when the Court of Appeal considers the answers
provided by the ECJ, it will also provide guidance on these
issues. Alternatively, it may be that we must await clarification
through new legislation or further decisions in this area.
Holiday
entitlement
The ECJ confirmed
in the recent case of Gomez v Continental Industrias del Caucho
that a woman on maternity leave is entitled to take holiday
(under the EC Working Time Directive) at a time other than during
her maternity leave. This was so even where, as in this case,
the woman’s maternity leave coincided with a period of
annual leave taken by the whole workforce, pursuant to a collective
agreement. This meant that, although the workforce as a whole
was obliged to take holiday at a specific time, Ms Gomez could
take her leave at a different time.
How
does this ruling affect UK law? Does it entitle a woman whose
maternity leave spans two holiday years to carry over any untaken
holiday from the first into the
second year? That would seem to be contrary to the Working Time
Regulations 1998 (which implement theWorking Time Directive
in the UK), which preclude a worker carrying over unused holiday
from one year into the following year. Are women on maternity
leave an exception to this rule, now?
In
the light of this uncertainty, it is hard to suggest how employers
should proceed. One possible option is to encourage employees
to take outstanding holiday before
going on maternity leave. Again, we await further guidance on
how to implement the law.
Failure
to inform of job vacancy
The
EAT recently reached a curious decision in a constructive dismissal
case, Paul v Visa International. Ms
Paul worked for Visa International as an administrator in its
operating regulations department. The department carried out
two types of work: credit
card design, on which she worked, and dispute resolution. Ms
Paul had expressed an interest in moving into dispute resolution
before going on maternity leave. During
her absence, a new post was created in dispute resolution for
an operating regulations analyst. Ms Paul was not told about
the post and it was filled by an
external candidate. When she found out, she was so upset that
she had not been told that she resigned.
The EAT held that an employer who fails to inform a woman on
maternity leave of a job vacancy which, had she known about
it, she would have applied for, was in fundamental breach of
the implied duty of mutual trust and confidence, even though
the woman did not have the necessary experience for the job.
The employer was also held to have discriminated against her
on the grounds of her sex.
It
is unclear whether the EAT would have reached the same decision
if Ms Paul had not expressed an interest in moving into another
role before she went on maternity
leave. Visa International may also seek leave to appeal this
decision. However, subject to any appeal, the message from this
decision is that you should notify any woman who is absent on
maternity leave of any job vacancy for which she might wish
to apply, even when you believe she would be neither suitable
nor qualified. Otherwise, you could be faced with a potential
constructive dismissal claim!
For
further details visit www.ffw.com
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