Maternity leave - 5 pitfalls to avoid

Even this most cold-hearted of lawyers couldn't fail to smile at the recent images of young Prince George on his first official engagement.  Yet, whilst the Duchess of Cambridge returned to official duties some time ago, for many other working mums with children born around the same time as George it's likely that they may only now be turning their thoughts to their return to work.  

A quick straw poll of my friends with young children produced some rather contrasting accounts of their maternity leave experiences: for some it was very much "out of sight, out of mind, with a quick scrabble around the week before my return"; while others had a more positive experience.  The diversity of their experiences only serves to highlight the fact that some particularly tricky issues can arise when dealing with maternity leave, and with this in mind I set out below a list of five pitfalls to avoid.

1)    Keeping in touch

It is important to ensure that you don't forget about employees on maternity leave and/or wrongly assume that they do not want to be bothered with work when they are away.

An employer may make "reasonable contact" with an employee from time to time during maternity leave. This enables the employer and employee to discuss, for example, an employee's return to work or to keep the employee informed of important developments at work.  As a minimum, the employee should be informed of any promotion opportunities or vacancies which arise during her maternity leave – whether or not the employer believes the employee would wish to apply for them – to avoid arguments of discrimination and/or constructive dismissal.

It is good practice to discuss with an employee before she goes on maternity leave how much contact she would like during her leave and how she would like to be contacted. She should, of course, be made aware that there is no pressure for her to take any action or attend any events during her maternity leave.

An employee can also currently take advantage of up to 10 ‘Keeping in touch’ (“KIT”) days during her period of maternity leave, which will not affect her entitlement to maternity pay. (This is due to increase under the legislation relating to shared parental leave, scheduled to come into force this autumn.) These can be a particularly useful tool for an employer to help an employee feel like she is being kept ‘in the loop’ and can make returning from maternity leave significantly less daunting.  Payment for KIT days is a matter for agreement between the employee and employer.

2)    Redundancy – consultation

A significant number of my friends experienced some sort of re-organisation in their departments whilst on maternity leave and the extent to which they were consulted on these changes varied wildly.  There is a common misconception that an employee cannot be made redundant whilst on maternity leave.  This is not true but steps do need to be taken to minimise the risk of allegations of discrimination and/or unfair dismissal.   

While there may be issues regarding the extent to which an employee wishes to have contact with her employer during her period of maternity leave (as highlighted above), it is key to involve such an employee as fully as possible in any redundancy consultation exercise.

The employee should be informed and consulted as far as possible to the same extent as the other employees – for example, she should be invited to a meeting (which may be held by telephone) to put her at risk of redundancy and be given the opportunity to participate fully in the process (including compliance with any collective obligations).

3)    Redundancy - suitable alternative employment

If an employee's role is confirmed as redundant whilst she is still on maternity leave, she is entitled to be offered a suitable alternative vacancy (where one is available) to start immediately after her existing contract ends. This would also include a vacancy for example with an associated employer.  An important factor which is sometimes overlooked by employers is the requirement that the employee on maternity leave is entitled to such an offer of suitable alternative employment in priority over any other employees.  This is one of the very few areas where positive discrimination is permitted under UK law. 

4)    Effect of a pay rise on Statutory Maternity Pay ("SMP")

For qualifying employees, SMP is based on the employee's average earnings during an eight-week reference period ending with the 'qualifying week' (which is the 15th week before the expected week of childbirth). However, a requirement of which not all employers are aware is that a pay rise which is (or would have been) awarded after the start of the eight week reference period but before the end of the employee's period of statutory maternity leave must be taken into account in calculating SMP, as if the pay rise had taken effect at the start of the reference period.  This effectively means that the pay rise is backdated for SMP purposes and as such the whole SMP entitlement will need to be recalculated and a top-up payment made.

5)    Bonuses

Where an employee’s contract has a bonus clause (which can include discretionary bonuses), the law infers a ‘maternity equality clause’ into the terms. This means that bonuses should be paid to employees who have taken statutory maternity leave during the bonus year. However, the bonus is only required to account for any part of the relevant bonus year:

-          during which the employee was at work before going on maternity leave;

-          during which the employee is absent for the two weeks' compulsory maternity leave; and/or

-          during which the employee was at work after her return from statutory maternity leave.

 Where the bonus is discretionary, an employer is bound by the duty – in relation to employees on maternity leave just as in relation to employees who are not – not to exercise such discretion ‘perversely’. Therefore, the contribution made by an employee on maternity leave for the period when she was at work should be properly considered in the calculation of bonuses.

Where the relevant bonus is not governed by the provisions of the employee’s contract – ie where there is absolutely no obligation on the employer to consider making a bonus, let alone do so on a discretionary basis – the law has indicated that, if such a bonus is paid to other employees, it should also be paid to an employee on maternity leave. Again, in most cases it need only be paid on a pro rata basis, taking account (as above) of the periods of work plus the compulsory maternity leave period.  This area can be particularly tricky and so specific legal advice should be taken if faced with this situation.