Maternity: frequently asked questions

Caroline Blackwood of Osborne Clarke concludes this month's series of articles on recent developments concerning maternity rights by answering some frequently asked questions.

How will the new maternity laws coming into force under the Work and Families Act 2006 affect employees' entitlement to maternity leave?

All employees who meet the qualifying criteria are currently entitled to 26 weeks' ordinary maternity leave (OML), regardless of their length of service with their employer. A further 26 weeks' additional maternity leave (AML) is available to employees who have worked continuously for their employer for at least 26 weeks by the end of the 15^th week before the expected week of childbirth.

The Maternity and Parental Leave etc and the Paternity and Adoption Leave (Amendment) Regulations 2006, issued under the Work and Families Act 2006, provide that all pregnant employees whose babies are due on or after 1 April 2007 will be entitled to both OML and AML, regardless of their length of service.

How will the new maternity laws affect employees' entitlement to maternity pay?

Under the draft Statutory Maternity Pay and Maternity Allowance (Amendment) Regulations 2006, statutory maternity pay (SMP) will increase from 26 weeks to 39 weeks for employees whose babies are due on or after 1 April 2007. The Government plans to increase this to 12 months by the end of this Parliament.

All qualifying employees will therefore be able to benefit from the full 39 weeks' paid leave if they choose to do so.

If all pregnant employees will be able to take both OML and AML, will any differences remain between the two types of leave?

Yes. During OML, an employee must continue to receive all of her contractual benefits except pay. During AML, the employment contract continues, but only very limited terms remain in force (for example, the employer's duties of trust and confidence towards the employee, and the employee's duty of good faith to the employer).

We understand that there are new notice provisions if an employee wants to change the date she returns from maternity leave - how do these provisions work?

Currently, an employee must give 28 days' notice if she wishes to return to work early from her maternity leave. However, an employee whose baby is due on or after 1 April 2007 will have to give eight weeks' notice if she wishes to change the date of her return to work. Therefore an employee will not have a right to change her date of return during the last two months of her maternity leave, as she will be unable to give sufficient notice to do so. These new provisions give employers more time to plan for unexpected changes in relation to the date of return for those on maternity leave.

We thought that there was an exemption in relation to protection for an employee on maternity leave for small employers, but heard that the new regulations are removing this - what is the position?

There is currently an exemption for employers with five or fewer employees in relation to the right to return from maternity leave, but this has caused confusion because small employers that do not hold open a position for an employee on maternity leave may still face sex discrimination claims. The Government has therefore decided to remove the exemption, so that all employers have the same duties in relation to employees on maternity leave.

We find it difficult dealing with maternity leave because of the uncertainty about whether or not we are allowed to ask the absent employee when she plans to return to work and if we are allowed to keep in touch with her during her maternity leave. Does the new legislation provide any assistance on this?

Employers must assume that employees will return to work from maternity leave on the last day of AML or OML, and they do not have a right to demand to be informed about whether the employee plans to return earlier or not at all. Under the new provisions, however, if an employee on maternity leave decides she would like to return to work earlier than the last day of her AML, she will have to give eight weeks' notice, which will give the employer time to plan for her return.

Case law has demonstrated that employers have a duty to keep employees on maternity leave reasonably informed of major office changes or developments; for example, employees on maternity leave should always be included in consultation about any redundancies that may affect them, and should be notified of any job vacancies that may be relevant to them.

The new laws confirm that employers are entitled to have 'reasonable contact' with employees on maternity leave. The Department of Trade and Industry will provide guidance on what constitutes 'reasonable contact' in due course. In addition, the legislation introduces 'keeping in touch days', which allow the employee to attend work for up to 10 days during her maternity leave, if both the employer and employee agree.

Our company has had an exceptional past year, with profits rising by more than 80% due to an upturn in the market and hard work by the employees. Will we still have to pay Mary, one of our employees who is on maternity leave, any bonus to which she is contractually entitled?

Contractual benefits are dealt with under the Equal Pay Act 1970, which was amended on 1 October 2005.

Mary will be entitled to a contractual bonus for the time when she was on compulsory maternity leave but not in respect of the rest of her maternity leave period. Therefore, with the exception of the two-week period of compulsory maternity leave, you should pay Mary a pro rata bonus to reflect her period of absence from work.

It is worth noting that, even if a bonus is not referred to in an employee's employment contract or is stated to be discretionary, it will still be classed as contractual if it has been paid on an annual basis to all employees without any discretion being exercised by the company.

One of our employees who is on maternity leave, Carol, will be paid SMP at a rate of 90% of her average earnings for the first six weeks of her maternity leave. However, we are due to award Carol a pay increase while she is on maternity leave. What effect will this have on the rate of SMP that we must pay her?

The amount of SMP payable is calculated using the amount of earnings paid to Carol in the eight-week period up to and including the 15^th week before her expected week of childbirth.

Under the Statutory Maternity Pay (General) (Amendment) Regulations 2005, if you were to effect a pay rise between the period of the 23^rd week before Carol's expected week of childbirth and the end of her maternity leave period (OML or AML), you would have to recalculate the SMP due to her to take into account her pay rise. This period could be up to 17 months and would result in Carol being given a new rate of SMP where SMP is already being paid or has already been paid in full (if she were by that time on AML). In effect, this means that the pay rise is backdated for SMP purposes and that Carol might receive her pay rise earlier than other employees.

If Carol received 90% of her salary for the first six weeks of her maternity leave, an additional payment would be due in respect of this period. However, if Carol received 90% of her salary for the whole 26-week maternity pay period (because she is a low earner), a recalculation in respect of the further 20 weeks of SMP would also be required.

The next topic of the week article will be the first in a series on bullying and harassment and will be published on 4 September.

Caroline Blackwood is a training and know-how lawyer in the employment, pensions and incentives department at Osborne Clarke (Caroline.Blackwood@osborneclarke.com).

Further information on Osborne Clarke can be accessed at www.osborneclarke.com.