Case Ref: 3.1/ August 2004
Summary of case
A Bargaining Unit (BU) asked Thompsons for advice over an office notice issued by the employer which raised queries over entitlement to maternity pay.
The bargaining unit had asked for advice on what was considered unambiguous wording in the office notice which seemed to go farther than the employer had actually intended.
Advice was also sought about whether or not any paid maternity leave due could be calculated in the same way as that for periods of annual leave (i.e. including weekend and bank holiday premium payments).
Key advice provided by Thompsons
In providing the advice the solicitor reflected on key passages in the office notice. The notice was in two parts.
Part one confirmed the contractual arrangements which the solicitor noted were "more generous" than the basic statutory maternity leave entitlement than provided under the current regulations.
Part two of the notice provided detailed guidance on maternity leave and pay. Of particular relevance was a part which described details of the contractual entitlement to 22 weeks maternity pay as follows:
"Payment will be at the normal rate of pay applicable prior to the beginning of maternity leave. This includes any allowances in payment and regularly worked overtime. If your salary fluctuates, you may have your maternity pay based on average pay, including regularly worked overtime, over the last eight weeks prior to the qualifying period."
The solicitor went on to comment and advise that:
"The Office Notice is clear that women who are eligible for contractual maternity pay, are entitled to the first 22 weeks based on normal pay. Paragraph 8 defines normal pay as average salary including overtime. However, members are then entitled to four weeks at the lower rate of SMP. This lower rate is worth only £100 or 90% of average weekly earnings if this is less than £100.
"What the Department is currently telling your members does not comply with the Notice. Your members will need to calculate which is more beneficial. For some members it may be more beneficial to receive 6 weeks average salary followed by 20 weeks basic pay, rather than 22 weeks average pay and 4 weeks at £100.
"The Department are bound by the Notice, which provides details of a contractual entitlement. Therefore any member who wishes to may challenge this breach of contract. A claim may be made in the Tribunal for unlawful deduction of wages under section 13 of the Employment Rights Act 1996.
"A claim must be brought within three months of the deduction. Where there has been series of deductions the claim must be brought within three months of the final deduction, i.e. three months of the 22nd week of maternity pay. If the deadline for lodging the Tribunal claim has passed, a claim be brought to the County Court for breach of contract. The deadline for this claim is within six years of the breach."
With regard to the second aspect of the advice sought which related to whether or not paid maternity leave could be calculated in the same way as that for periods of annual leave, the solicitor pointed to the provisions of the Working Time Regulations. The BU were advised that:
"holiday entitlements under reg 13(1) of the Working Time Regulations 1998 continue to accrue when an employee is on long term sick leave. However in Bamsey v Albion Engineering  icr 1224 the EAT held that the definition of normal working hours applies when calculating holiday pay. Only contractual hours are include and, for example, overtime hours are not. Therefore, Kigass will not assist PCS members in the current dispute over rates of maternity pay. Kigass means that members accrue annual leave, during their ordinary maternity leave, the first 26 weeks leave. This will be based on basic pay and not average pay."
Legal department comment
The above highlights two important aspects of the advice given in this case. Firstly, there is confirmation that employers are bound by what they publish by office notices which provide details of contractual entitlements.
Secondly, that with regard to the application of the Working Time Regulations only contractual hours are included and for example overtime hours are not.