Maternity Leave and Benefits

Following on from the article in the August edition of Essential News ‘More Changes to Maternity Benefits’, regarding the rules on Maternity Leave and benefits, these recent changes in the law have removed the distinction between Ordinary Maternity Leave and Additional Maternity Leave in respect of contractual terms and conditions except for pay.

This means that women on Maternity Leave potentially accrue twelve months’ entitlement of statutory holiday and twelve months of any additional contractual holiday while they are off. This can present a scenario where an employee returns to work late in the holiday year from Maternity Leave and wants to take that holiday before the holiday year ends.

Can she do that?
She can certainly take any statutory entitlement accrued in that holiday year between when she returns to work and when the holiday year ends. If your holiday year is January to December and she returns on 1st November, she can take her statutory entitlement of 4.8 weeks in that remaining period. Statutory holiday cannot be carried over or bought out. This scenario existed before the recent law change and you, as the employer, should be prepared for it.

What about Contractual Leave?
You may have a bit more leeway here. There is nothing in the law to stop you carrying it over or buying it out if the employee agrees. However, if you enforce a buy-out or carry over without agreement it could lead to a discrimination complaint for reason that a maternity-related detriment has been suffered.

What about taking holiday before going on Maternity Leave?
If the Maternity Leave period all happens within the one holiday year (obviously this is unlikely if the whole twelve months is taken) then the leave can be used up before the Maternity Leave starts or after it fi nishes or a combination of the two. In order to avoid the scenario where it is all outstanding on return, you may want to discuss with the employee at an early stage when the leave will be used up. Technically, as the employer you can control when the leave is taken but remember – if the employee returns to work with outstanding statutory holiday accrued, she is entitled to take it as paid holiday no matter how late in the holiday year.

In most cases, the Maternity Leave will bridge two holiday years. Someone who starts their Maternity Leave on 1st July 2009 will have twelve months of accrued leave to take between January and July 2009 if the holiday year is January to December. If the holiday year is April to March then they have the entitlement to take a year’s holiday in the three months before they go. Many employees will realise this, or be advised of it, and will request the leave. Best practice is to alert the employee to the situation in any case and ensure it is booked. However, if the statutory leave is not taken by the time the end of the fi rst of the two holiday years is reached then it is lost. Needless to say, the holiday entitlement for the second of the two years is valid on return from Maternity Leave.

Squeezing in so much holiday in a short time is going to his us really hard. Can we do anything?
For holiday that has to be taken before Maternity Leave starts, the pragmatic thing to do is to bring in your Maternity Cover arrangements before the Maternity Leave starts, to cover for Annual Leave.

For holiday that has to be taken after Maternity Leave finishes, there is a possible way of alleviating it, but it has to be by agreement, you cannot insist. Say an employee is due to return from Maternity Leave on 1st November and your holiday year is January to December. She has two months to take all her Annual Leave and it is your busy period. You could suggest that she fi nishes her Maternity Leave one month earlier than planned and then spends a month on Annual Leave (or whatever period of time it takes to use it up) whilst you continue with your cover arrangements. She will effectively have been paid for her fi nal month off (which may be an appealing proposition) and will return to work on 1st November without any outstanding leave (which may be a better situation for you). Be sure to point out that this is not taking holiday whilst on Maternity Leave – it is fi nishing Maternity Leave and starting holiday.

Our employee wants to take the full twelve months Annual leave, does not want to cut it short and replace it with holiday and wants all her leave in the short remainder of the holiday year when she returns.

The only realistic and pragmatic advice is to plan for this. Either work out how you will fi t in the holiday in the remaining period or continue with your Maternity Cover arrangements whilst the leave is used up. You can negotiate on compensation or carry over for the contractual entitlement (holiday above 4.8 weeks) but the statutory component is the employee’s absolute right.

Our employee plans to take Maternity Leave of twelve months that coincides exactly with our holiday year, it is impossible to fit the holiday in. What do we do?
If there is any contractual provision for carry over of contractual holiday (above the statutory) then it should be operated. This does not, however, deal with the statutory holiday. In reality, an employee is likely to reduce her Maternity Leave to under a year to fi t the holiday in. But if this does not happen, then the only outcome would seem to be that the leave is lost. This gives rise to a situation where, for reason of maternity, an employee has lost her statutory entitlement to Annual Leave. This does not appear to be within the employer’s control so we can only await any case law. In the meantime, if you are faced with this scenario please phone the NorthgateArinso Employer Services Advice Line.