While you are on maternity leave, you continue to benefit from all of your rights and benefits (except remuneration) as though you were at work. You can read our article on calculating maternity pay to help you work out what kind of pay you can get while on maternity leave. This article will clarify what happens to your other rights and benefits as an employee on maternity leave, such as annual leave, pay rises, pension contributions and childcare vouchers.
All employees have a statutory right to 28 days a year (pro-rata for part-timers). This can include bank holidays. Some employers offer more paid holiday than the statutory minimum.
You continue to build up paid holidays, as if you were at work, throughout your maternity leave. If possible, talk to your employer beforehand about when to take this holiday, for example, before you start your maternity leave, or at the end of your maternity leave, or a mixture. Your employer may have to allow you to carry over more annual leave than normal (which may mean you carry over leave into the next leave year even though this wouldn’t usually be allowed) to make sure you do not lose any of the holiday you accrue during maternity leave.
If you leave your job, you are entitled to pay in lieu of the holidays you have built up but not taken. You do not have the right to pay instead of paid holidays unless you leave employment – you must be allowed to actually take the holiday and be paid for it as normal. If you are denied your rights to paid leave or pay in lieu and you think you are entitled, the first step would be to explain your concern to your employer (if necessary, by a written grievance) before considering making a claim in the employment tribunal.
You are not entitled to ‘remuneration’ during maternity leave. The law states that ‘remuneration’ includes payments of wages or salary. This means that you are not entitled to your basic pay and potentially any other financial payments that you regularly receive from your employer as part of your salary package. The law is not clear about what other financial payments you can expect to receive, so you will need to discuss with your employer whether a particular payment is part of your normal salary, or whether it is an extra payment. You can argue that remuneration is only basic pay and that you are entitled to receive items such as a car allowance or mortgage subsidy as they appear separately on your pay slip.
If you get a car allowance instead of the use of a car it is arguable you should continue to get the allowance during your leave as the right to a company car continues during maternity leave. There has been one Employment Tribunal case where it was decided that a car allowance was not payable during maternity leave, but this does not necessarily have to be decided in the same way by other tribunals.
This is a complicated area as there are different types of bonuses and there have been many tribunal cases on this issue.
If you have been refused all or part of a bonus discuss it with your employer to try to understand why they believe it is not payable. If the position is not clear or you do not agree or accept their explanation seek further advice.
At present the general position is that bonus or commission payments that are part of your salary or regular earnings or performance-related pay are likely to be regarded as remuneration so are not payable during maternity leave.
However, it would be maternity discrimination to refuse to pay the proportion of any bonus or commission that relates to the time that you were actually at work (this was decided in the case of Lewen v Denda). For example, if you were at work for half the year and on maternity leave for the other half of the year, you are likely to be entitled to half of the bonus (subject to meeting any conditions attached to the bonus such as achievement of performance targets). Where the due date for payment of commission falls during maternity leave, if the commission relates to work you did before you started maternity leave, this will be payable.
You are also entitled to the proportion of any bonus that relates to the time you were on compulsory maternity leave (two weeks immediately following the birth of the baby or four weeks for factory workers).
If you usually earn commissions you may be entitled to payment of commissions that you would usually earn, during the period of compulsory maternity leave.
To work out whether you might be entitled to a bonus or commission payment during your maternity leave you should check:
- in the case of a bonus, the type of bonus (contractual or discretionary),
- what the bonus or commission has been or is supposed to be paid for (for example, work done in the past, as a reward for high performance, in connection with a period of service); and
- the period to which it relates (is it payable in respect of work you have done before going on maternity leave even though the date for payment is during your maternity leave? Is it an annual bonus and how does this overlap with your period of maternity leave?)
The following documents may contain information about your bonus or commissions which will help you work out what the position is during maternity leave:
- your terms and conditions/contract of employment;
- your employer’s policy or section of a company handbook on commissions/bonuses;
- any letters from your employer about these payments.
You should also check your employer’s maternity policy to see what is says about payments during maternity leave.
In Gillespie v The Northern Health and Social Services Board the ECJ held that a woman on maternity leave should receive a pay rise awarded during her maternity leave, like any other worker. To deny such an increase to a woman on maternity leave would discriminate against her as, had she not been pregnant, she would have received the pay rise.
If a pay-rise is awarded whilst you’re on maternity leave when obviously you don’t get paid your normal salary but Statutory Maternity Pay (SMP) or are unpaid, you are still treated as receiving it. To determine how much SMP you should get, your employer should recalculate your average weekly earnings as if these earnings included the pay-rise. The rule is that your SMP is calculated according to your average earnings during an eight-week reference period ending with the Qualifying Week . But, a pay-rise which is (or would have been) awarded after the start of this eight week reference period but before the end of statutory maternity leave must be taken into account in calculating SMP, as if the pay rise had taken effect at the start of the reference period. In effect, this means that the pay rise is backdated for SMP purposes, and you – on maternity leave – will receive it earlier than other employees. Even if the pay rise is awarded in the last week of statutory maternity leave (by which time the you may have already exhausted your entitlement to SMP), your whole SMP entitlement from day one will have to be recalculated and a top-up payment made.
Benefits such as a company car, mobile phone, luncheon vouchers, club membership, health and other insurance continue as normal during maternity leave. You can keep a company car or mobile phone provided for personal use by your company throughout the time you are off. Also, participation in share schemes, professional subscriptions, free or subsidised travel, and subsidised childcare should continue.
The case of Peninsula Business Services Ltd v Donaldson UKEAT/0249/15 decided that there was no statutory obligation to continue to pay salary-sacrifice vouchers during statutory maternity pay.
Vouchers must still be paid when:
- The vouchers are not salary sacrifice – they are paid in addition to wages.
- There is a contractual obligation to continue to pay.
- There is sufficient contractual maternity pay to sacrifice to pay for the vouchers.
During the first 26 weeks of your maternity leave (also called Ordinary Maternity Leave “OML” for more details see here), your employer must continue to pay full pension contributions as though you were working normally, whether or not you plan to return to work afterwards. This applies whether you are being paid maternity pay or Maternity Allowance or neither. Your employer’s contributions must be based on your normal pay. If your pension scheme requires you to pay contributions they will be based on the maternity pay (Statutory Maternity Pay or contractual maternity pay) that you actually receive.
You will continue to be entitled to pension contributions from your employer during some of your Additional Maternity Leave (which starts at the end of OML and corresponds to the last 26 weeks of the 52 weeks’ maternity leave), for the time you are still getting maternity pay (Statutory Maternity Pay or contractual – or occupational – maternity pay). Entitlement ends once maternity pay ends. As with OML, your employer’s contributions should be based on your normal pay and your contributions should be based on the maternity pay you actually receive. It is not clear whether you are entitled to pension contributions after your paid maternity leave has ended. You should seek advice if there is a dispute with your employer about this.
This advice applies in England, Wales, Scotland and Northern Ireland. If you live in another part of the UK, the law may differ. Please call our helpline for more details
If you have further questions and would like to contact our advice team please use our advice contact form below or call us.