For many years there was a legal distinction between Ordinary Maternity Leave (often abbreviated to OML) and Additional Maternity Leave (often abbreviated to AML). There were different rules on who qualified to take these different forms of leave and each form of leave attracted different entitlements. With the Work and Families Act of 2006 extending women’s rights to take leave so that all women can now take up to 1 year’s leave (being 26 weeks OML and 26 week’s AML), regardless of their length of service, this distinction began to be eroded.
The process of removing the distinction has been further advanced by changes to the Sex Discrimination Act 1975 and the long-named Maternity and Parental Leave and Paternity and Adoptive Leave (Amendment) Regulations 2008. One of the reasons behind this was a case which suggested our legislation had not fully brought the EC Equal treatment framework directive into force in the UK; forcing our legislators into action.
For mothers of babies due or employees who adopt on or after October 5th employers will have to take great care not to discriminate against women taking AML by removing non-cash benefits which previously it had been safe to do. For example, many maternity leave policies provided for the employee to be able to keep her company car during OML but to have to return it to the employer if she took AML. The same was often true of benefits such as gym membership or private healthcare which were often provided during OML but not AML. Now, these non-cash benefits should continue to be provided throughout the entire period of maternity leave (up to 1 year).
Many employers who arranged childcare vouchers for their employees via salary sacrifice schemes are being caught out, having not appreciated that these benefits will continue to accrue during AML. HMRC have published guidance called “Statutory maternity leave - salary sacrifice and non-cash benefits” (http://www.hmrc.gov.uk/employers/sml-salary-sacrifice.pdf). It includes useful worked examples of a number of different scenarios.
Holiday is another area which is impacted: employees continue to accrue full contractual and statutory holiday pay for the entire duration of the leave period.
The European legal position suggests that this extension of rights would also cover pensions which should be maintained during maternity leave: something our Government is adamant is not the case and argues that the recent changes don’t affect. Employers in the UK are currently adopting a “risk not paying them until there is a clarity that we have to” approach which could see fingers burned in the long-term especially in the public sector where it is easier for an employee to enforce EC law directly.
It is worth reviewing your practice to ensure compliance as a woman who is deprived of any contractual or discretionary benefits during OML or AML may have claims for deductions from wages, a claim that she has been subjected to a detriment for a reason connected with pregnancy or maternity, a claim for breach of contract, automatically unfair dismissal (if she treats herself as constructively dismissed) in addition to a sex discrimination action, for which unlimited damages apply.
So what do you need to do? After understanding the changes, you will need to update your policies or handbooks to reflect the new legal position. I would advise against maintaining the status quo (hoping no-one will recognise their rights, risking a claim) as much as I would advise against removing the non-cash benefit to avoid the changes as that could get you into difficulties over unilateral changes to the contract of employment. If you did decide to make changes to the contract of employment there are proper procedures to be followed to achieve this including consultation with employees.
