Thu, 7 Oct 2010

New maternity rights to cost UK £2.5bn

Employers have increased pressure on the Government and the European Union to reduce new maternity rights. The British Chambers of Commerce last month claimed that the most recent plans will cost businesses £2.5bn a year.

The proposals, part of the European Union Pregnant Workers Directive, would offer 20 weeks’ leave on full pay. MEPs are due to vote on the proposed law this month.

Current UK entitlements are for up to a year off, with the first six weeks on 90% pay, followed by 33 weeks on Statutory Maternity Pay and the rest unpaid.

The British Chambers of Commerce said the extra cost was too big a burden for employers, and complained that MEPs will not be fully informed, as a European Union impact assessment carried out only considered the costs and benefits for 10 out of the 27 member states.

Speaking to Payroll World, Kieran O’Keeffe, head of European Affairs at the British Chambers of Commerce, said: ‘There are two groups in the parliament that are split, which makes it difficult to tell what the result will be. Of course we hope they see sense and look closely at the Impact Assessment published by the European Union.’

He added: ‘MEPs must consider who will be expected to pay for this. Employers have looked after employees, and the Government will not bear the cost.

‘This directive should be about setting minimum European Union standards for the health and safety of pregnant workers, not
adding new payroll costs for overburdened companies and national social security systems.

‘These figures confirm that the Parliament’s proposals are completely unaffordable as governments across the European Union seek to deal with budget deficits and the aftermath of recession.

‘The Commission’s original proposal to extend maternity leave to 18 weeks, but with individual member states allowed to decide the level of pay, is certainly a better and more affordable option,’ said Mr O’Keeffe.