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The very complex issue of maternity pay

By Ian Holloway, head of legislation and compliance at Cintra HR & Payroll Services

A Trade Union Congress (TUC) announcement about the UK’s rate of statutory maternity pay made headline news on 24 March. Housed on their Website under the ‘pregnancy discrimination’ section, it makes troubling reading for people that have made the choice to have children and those who have not. To summarise, the announcement says that out of 24 European countries, the UK ranks 22nd in terms of ‘decently paid’ maternity leave and is in the ‘relegation zone’. The only EU countries below the UK are Ireland and Slovakia.

I have a number of concerns about this announcement.

The report focuses on the entitlement to pay rather than the entitlement to leave. A balanced report should, surely, look at the maternity system as a whole. If this was done, the UK would be seen to be near the promotion spot with guaranteed leave of 52 weeks, second only to Bulgaria, of which 39 may be paid.

Further, the announcement is critical of the UK within Europe but fails to mention that the UK entitlement to leave is far in excess of the EU directive. This says member states must provide a minimum of only 14 weeks. In 2016 as a Remain campaigner, TUC general secretary Frances O’Grady was clear that worker rights derived from membership of the European Union. However, the body as a whole does not seem to be balanced in its approach where domestic legislation exceeds EU minimum requirements.

Also, where is the mention of adoption leave and pay? The focus is on discrimination as a result of pregnancy but isn’t the announcement itself discriminatory by virtue of the fact that it neglects to mention the choice made to bring a child into the home through adoption?

The solution?

The TUC recommends several things (and I can only assume children adopted into the homeplace were meant to be covered by these but have been ignored as the result of a disappointing oversight):

*1. *Increase statutory maternity pay (SMP) and Maternity Allowance to the same level as the minimum wage so mothers are mot ‘forced’ back into the workplace for financial reasons.

*2. *Increase shared parental pay and paternity pay to the same level as the minimum wage, ensuring that partners also benefit from a rate increase.

*3. *Help self-employed mothers by paying Maternity Allowance at an equivalent rate for the first six weeks at an earning-related rate.

*4. *Make shared parental leave (SPL) more flexible and allowable in smaller ‘chunks’.

An escalating problem?

Let’s get back to basics – bringing a child into the homeplace (via birth or adoption) is, generally, a lifestyle decision. Once that decision has been made, it is only right that parents are given employment law protections, such as the right not to suffer discrimination or barriers to re-entering the workplace. UK domestic legislation, as directed by Europe, does provide these protections.

However, every situation has two angles. If more maternity, adoption, paternity and shared pay is paid, who meets the cost of this? Currently, the government meets 92% of the cost, increasing to 100% if the employer meets the small employer criteria. Can UK plc afford to make increased payments to workers and, if not, would the employer be required to meet more of the cost? I cannot imagine that being popular with employers, and you wonder if this would lead to employers looking at potential parents as a future cost burden.

If the payments are increased, does this mean that things like income tax and/or National Insurance has to rise in order to meet the necessary funding? I cannot imagine this being popular either and the extra tax/NICs burden could, quite understandably, be read as a discrimination against those that had made the deliberate choice not to bring children into the homeplace.

In short

It’s an interesting and headline-grabbing announcement but one that fails to look at the whole situation. It is quite right that the TUC raises this issue for workers and that is their reason for existence.

However, who is going to be brave enough to put the opposing view on behalf of employers and those of us that have made the lifestyle decision not to have parental responsibilities?!

Posted on 27th March 2017 by Jerome Smail

 

 

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