Maternity leave and early severance

Case ref: 10.1/ Oct 05

Summary of case

This case involved a member on maternity leave who applied for early severance. The members date of confinement was 11/05/05. Her intended start date for maternity leave was 31/03/05. She had been offered an early severance package from 31/03/05. 

The Personnel Department argued that staff could not expect to receive both maternity pay and early severance.

Advice Requested

Thompsons were asked for the following advice: 

As the two dates coincided, was Ms Y deemed to be on maternity leave when the early severance started?

If not could Ms Y change her intended start date for maternity leave so that it started before her severance thus kicking in her statutory maternity pay.

Key advice provided by Thompsons

Our solicitor advised that in order to qualify for statutory maternity pay the member must:

  • have been continuously employed for at least 26 weeks continuing into the fifteenth week before the expected week of confinement (known as the "qualifying week")
  • have average weekly earnings of not less than the lower earnings limit for the payment of National Insurance
  • have stopped working for her employer wholly or partly because of pregnancy, or her job had ended without her consent after the start of the qualifying week
  • be pregnant and, in order to claim SMP, she must have reached the eleventh week before the expected week of confinement or have given birth before that date
  • produce medical evidence and give the required notice to her employer
  • have stopped working.

In this particular case the solicitor went on to provide the following detailed advice: 

"Although it appears that your member satisfies most of the qualifying conditions, clearly if she accepts voluntary severance she will not have stopped working for her employer, wholly or partly because of her pregnancy nor has her job ended without her consent (because she has agreed to it). A woman who is made redundant after the start of the qualifying week and before she starts her maternity leave would ordinarily qualify for SMP, although arguably voluntary redundancy would not have the same effect. 

"It is unclear which came first, your member's decision to commence her maternity leave on 31st March 2005 or the offer of early voluntary severance effect from 31st March 2005. It is therefore unclear whether or not the employer is seeking to avoid your member's entitlement to SMP by offering early voluntary severance which will take effect before the commencement of her maternity leave (which would crystallise her entitlement to SMP).

"Another possibility may be that your member has been offered early voluntary severance and is choosing to start her maternity leave on the same day in order to ensure she does qualify for SMP. Whether she is deemed to be on maternity leave when the early severance is effected will depend on practically what occurs - is the 31st March 2005 the first day of maternity leave when your member is not at work?

"If so, and if the same date is the date on which her employment is due to be terminated by reason of voluntary redundancy, it would appear that she has commenced her maternity leave before the severance has been effected. In my opinion, this would mean that the entitlement to SMP has crystallised before the voluntary termination of her employment, and as such she would be entitled to receive SMP from her employer. 

"The second question you ask is whether the employer could retract the offer of early voluntary severance. It would appear that your member's position is not actually redundant, and in principle the employer could retract an offer of early severance at any point. However, such action might be discriminatory if the reason that the severance package is retracted is in direct response to your member asserting her statutory right to take maternity leave. 

"The third question you ask is whether or not your member should change the intended start date for maternity leave so that it starts before her severance, thus kicking in her entitlement to SMP before the severance is affected. I have already stated that, in my opinion, provided that the 31st March is the first day of her maternity leave and the last day on which she will be employed, her right to SMP has crystallised prior to the termination of her employment. 

"I think that the personnel department of your member's employer are misguided in their understanding of the entitlement to SMP. Their commitment that they thought she may "have to resign to enable her to receive SMP" is clearly the exact opposite to the actual position. Whilst they may believe that Ms Y is "having it both ways" by receiving SMP and an early severance package, if the right to SMP crystallises before her employment terminates, then she is not having it both ways rather taking advantage of both her statutory rights and the offer of early severance.

"If your member's employer seeks to retract the offer of early severance in direct response to your member asserting her right to take statutory maternity leave (and, by implication, receive SMP) such action might be considered direct discrimination on the grounds of your member's gender and/or pregnancy.

"Personnel seem to have advised you that it is a complicated issue in view of the fact that paid maternity leave is reckonable for pension purposes, and this could have an effect on the early severance package. Bearing in mind that SMP can be exactly calculated, I think it would be relatively simple for Personnel to take what your member might receive in SMP into account for the purposes of calculating her severance package, if this is appropriate. 

"For the avoidance of doubt your member's entitlement to contractual maternity pay, that is anything to which she is entitled over and above the statutory rate, ceases from the date on which her employment with the employer ceases."

Legal department comment

Although guidance on the issue will be available from other PCS publications, the solicitor neatly describes the criteria which covers qualification for receipt of statutory maternity pay.

Of particular importance is confirmation that in the circumstances which arose in this case, the member was merely taking advantage of both her statutory right and the offer of early severance.

Any withdrawal of the offer of early severance may have been considered as an act of direct discrimination on the grounds of gender and/or pregnancy.

Clearly more detailed advice would be required and possible legal representation considered appropriate in any ET claim around these matters.

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