Second helpings all round

25 March 2008

Last year it was held that the UK had failed to implement properly the Equal Treatment Directive the first time round, when it introduced legislation in 2005. The Government has now published amended regulations to make up for the initial short comings and which, crucially for employers, will create enhanced maternity rights for women during the second half of their maternity leave period.

In Equal Opportunities Commission v Secretary of State for Trade and Industry (2007) the High Court ruled that the Employment Equality (Sex Discrimination) Regulations 2005 did not adequately implement the Equal Treatment Directive in relation to the definitions of harassment and discrimination on grounds of pregnancy or maternity, and with regard to the rights of women on maternity leave. As a consequence, the Government was required to make certain changes, which it has now done in the form of the Sex Discrimination Act 1975 (Amendment) Regulations 2008. These Regulations will come into force on 6 April 2008 and will have the following effect:

The definition of harassment is amended to unwanted conducted related to either the sex of the complainant or another person.
Therefore, an employee will be able to bring a claim even if the harassment is not aimed directly at them but, nonetheless, has the effect of violating their dignity or creating an intimidating, hostile, degrading, humiliating or offensive environment for them to work in.
Creating a duty on employers to take reasonably practical steps to prevent employees suffering harassment committed by an external third party, e.g. customers.
Where an employee is subjected to such harassment during the course of employment, provided the employer knew that the employee had suffered harassment on at least two other occasions, the employer will be held liable if they fail to take appropriate action to protect the employee and further harassment occurs.
Removing the requirement for a comparator who is not pregnant or who has not taken maternity leave in discrimination claims of this nature.
An employer will now be acting unlawfully if, on the grounds of pregnancy, he treats her less favourably than if she had not been pregnant or, if on the grounds that she has taken or sought to take maternity leave, he treats her less favourably than if she were not exercising these rights.

However, the most significant change is the removal of the distinction made between the Ordinary Maternity Leave period (OML) and the Additional Maternity Leave period (AML). Currently, during the OML period the employee is entitled to receive all her normal terms and conditions, except remuneration. Therefore, employers must continue to provide contractual benefits for at least the first six months including holiday, company cars, etc. Whereas, during AML, only certain terms and conditions continue to apply, such as notice periods, disciplinary and grievance procedures or contractual redundancy schemes and, with the exception of statutory holiday which continues to accrue, employers can cease to provide benefits for the last 6 months of the maternity leave period. Furthermore, a woman returning from OML has the right to return to the same job, whereas, a woman returning from AML has the right to return to the same job or, if that is not reasonably practicable, to a suitable alternative job.

By removing the distinction, an employee on maternity leave will have the benefit of all her normal terms and conditions, except for remuneration, for the duration of her maternity leave. The entitlement to receive a bonus therefore depends firstly on whether it is classed as remuneration. If not, arguably the employee should not be excluded because she on maternity leave. This is not an absolute right and can be dependant on a number of factors, including the type of scheme. However, the law is currently clear that, when calculating a contractual bonus, the two week compulsory maternity leave period must be included as though the employee had been at work. The new Regulations will also extend this principle to non-contractual bonuses.

Following changes implemented from April 2007, all employees irrespective of length of service are now entitled to both OML and AML, so employers must be prepared to provide the same level of benefits for up to one year for all employees who become pregnant. The Government has acknowledged that employers will need to time to adjust to this change, which is why the implementation date for this provision is later than the other changes and will only have effect for women whose expected week of childbirth begins on or after 5 October 2008. The Government is also using this time to draft amendments to the Maternity and Parental Leave Regulations to reflect these changes.

Meanwhile, employers should carry out their own impact assessment and update their maternity policies. Employees qualifying for the enhanced rights should be notifying their employers of the fact that they are pregnant towards the end of June and will want up to date confirmation of their rights. This is a situation in which neither party wants to be left second guessing.