By Adis Sehic and Sarmila Bose - 30 May 2023
Imagine this scenario: you're a cleaner for a small business, working 40 hours a week. You've just become pregnant, informed your employer and agreed when you will stop working to have your baby. Unfortunately, your pregnancy is not easy and you have to go on sick leave for a while. Eventually you return to work, but due to pregnancy-related health issues, you work fewer hours than you otherwise would have in your normal schedule. When it's time to go on leave, your employer tells you that you will receive a reduced amount of Statutory Maternity Pay (SMP), because you earned less than your normal pay during what is known as the 'relevant period'. Or, worse still, your employer tells you that you are not entitled to SMP at all.
Unfortunately, this isn't just a figment of our imagination. It describes precisely the set of circumstances that some pregnant women engaged in low paid work are facing.
In this blog post, we look at why the rules on SMP in this context are not just unfair, but how they are potentially discriminatory to pregnant workers in lower paid jobs.
What is SMP?
SMP is a regular payment that is made by employers to employees or workers who have had a baby and are on maternity leave or taking time off due to maternity. Subject to certain conditions, employees and workers, working full or part-time, can claim SMP, regardless of whether they intend to return to work after the baby is born.
The amount of SMP that is paid depends on the result of quite a complex calculation of the worker’s earnings, including:
How do you qualify?
It is not enough for someone to be pregnant and in work in order to receive SMP. Instead, individuals have to meet certain qualifying criteria, which includes giving notice to the employer within prescribed times, submitting specified evidence of the pregnancy and due date and, importantly, earning enough over a specific period during the pregnancy.
Specifically, to be entitled to SMP a pregnant worker must earn a minimum amount (currently £123 before tax) per week on average in the eight weeks (or two months, depending on how the worker is paid) before the end of the 15th week before the week the baby is due. This stretch of time is known as the 'relevant period'.
Section 21 of the Statutory Maternity Pay (General) Regulations 1986 uses the term 'normal weekly earnings' during the 'relevant period' (defined in section 21(3)) as the basis for calculating eligibility and the amount of SMP that is payable.
Why are the current rules unfair?
We think the current rules are unfair, as there is no flexibility on the 'relevant period' if a pregnant worker is earning less because they have been off sick or working fewer hours in that time due to pregnancy-related illness.
This makes even LESS sense when you consider that the rules allow for flexibility in other situations when earnings in those weeks might be lower, or even higher, than normal. Here are some examples:
Example 1 - furloughed workers
The SMP regulations were revised in 2020 to take account of the impact of COVID-19 and the large numbers of workers placed on furlough in that period. As furlough pay was at a lower rate than workers' normal pay, the regulations were amended so that employers would refer to what workers would normally be earning during the 'relevant period' (rather than their lower, furlough pay) when calculating entitlement, so they wouldn't be disadvantaged.
Example 2 - high earners and bonuses
The rules seem to allow flexibility if someone receives higher than their 'normal weekly earnings' during the 'relevant period'. For instance, if a woman is awarded a pay increase and that pay increase applies to any part of the period between the beginning of the relevant period and the end of her period of statutory maternity leave, her normal weekly earnings are to be calculated as if such an increase applied in each week of the relevant period (section 21 (7) of the regulations). SMP in such cases would have to be recalculated and backdated as necessary to reflect the higher amount. Similarly, because bonuses count as earnings, if a worker receives a bonus during the 'relevant period', their average weekly pay during that period could be significantly higher than what their 'normal weekly pay' would have been otherwise.
In other words, except for furloughed workers, the average weekly pay used to calculate entitlement appears in practice to be what someone is actually paid, rather than their 'normal pay'. This might be beneficial to those working in higher paid and prestigious sectors, but for our beneficiaries stuck in lower-paid and more precarious employment, it demonstrates that the current system is plainly unfair.
Is there a discrimination issue?
Potentially. The Equality Act 2010 protects people from discrimination and discriminatory practices, both in the workplace but also in wider society. Section 18(2) of the Act is clear that someone will discriminate against a woman if they treat her unfavourably 'because of illness suffered by her as a result of it [being pregnant]'.
We suggest that if women are treated unfavourably by losing entitlement to SMP/being paid a lower amount of SMP because of a pregnancy-related illness, that could amount to discrimination.
Can the problem be fixed?
Yes!
Just as the government amended the regulations for furloughed workers during the Covid-19 pandemic, they could be amended again to plug this gap in the law.
For example, the regulations could allow for flexibility regarding the calculation of 'normal weekly earnings' during the 'relevant period'. This could be done by allowing the weeks when a pregnant worker was off sick/working fewer hours due to pregnancy-related illness to be left out, or other weeks before/after that period to be substituted for the affected weeks.
This would provide an easy fix to an issue that has been and will continue to affect women engaged in lower paid work. We urge the Government to take action on this important and pressing issue!
Have you been affected by any of these issues? We are keen to hear from women who have been affected by pitfalls in the SMP system, particularly where sickness during the ‘relevant period’ has affected your eligibility and/or the amount of SMP you received. For help with discrimination, including pregnancy or maternity discrimination, get in touch: https://www.workrightscentre.org/contact
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