Statutory Maternity Pay (SMP) – what are the rules?

This week Samira Ali of SCE Solicitors discusses SMP.

I think everyone gets confused about maternity and entitlements. So I thought a quick guide to help everyone understand their rights would be useful. Whether you are an employer or employee if after reading this guidance note you are still confused then please do make contact and I will try and place you on the correct path.

Who is entitled to SMP?

Employees qualify for SMP if they satisfy the:

 (1) The continuous employment rule:

- This means an employee must be employed by the same employer continuously for at least 26 weeks into the 15th week before the week the baby is due (the qualifying week).

- Exceptions can be made if the baby is born premature.

When can a break amount to being continuous employment?

When an employee:

- Is absent (for periods of 26 consecutive weeks or less) because of sickness, injury, pregnancy or childbirth;

- Has taken a period of statutory maternity leave, adoption leave, paternity leave or parental leave (in which case, that period counts towards the period of continuous employment);

- Did not take maternity leave but were not working because they had a break to give birth; they worked for the employer before and after the break, and the break is not more than 26 weeks;

- Has temporarily ceased because the employer was unable to offer the employee any work;

- Is away in circumstances in which, by arrangement or custom, is regarded as continuing for some purposes (for example, teachers employed on term-by-term contracts with the same or associated employers);

- Was unfairly dismissed and, after action under the Employment Rights Act 1996, were reinstated (or would have been, but for their pregnancy) and have refunded any redundancy or equivalent payment received from the employer upon dismissal;

- Is away because of a stoppage of work during an industrial dispute. A strike does not break continuity of employment, but the weeks or part weeks of a strike do not count towards the 26 weeks of employment.

Agency workers:

- Workers employed by an agency, in each of the 26 weeks into the qualifying week, satisfy the continuous employment rule providing they did some work during any week.

- There may be complete weeks when the employee did no work for the agency. This does not necessarily mean that the employee’s continuity of employment is broken.

What happens if someone’s employment stops work during or after the qualifying week?

If an employee’s employment ends during or after the qualifying week they can still qualify for SMP from your former employer.

Change of employer

If an employee changes jobs during her pregnancy, she is unlikely to be able to meet the continuous employment rule unless:

- TUPE applies;

- An Act of Parliament, one corporate body takes over from another as their employer;

- There is a change in the partners, personal representative or trustees who employ them;

- They move from one employer to another at a time when the two employers are associated employers, that is if one is a company of which the other (directly or indirectly) has control, or if both are companies of which a third person (directly or indirectly) has control;

- The employee is a teacher in a school maintained by a local education authority, and the employee moves to another school maintained by the same authority.

 (2) The Earnings Rule

To qualify for SMP the employee’s average gross weekly earning must be at least£97 per week for the tax year 2010/2011 and £102 a week for the tax year 2011/2012.

As a general rule, the employee’s earnings will be averaged over a period of at least 8 weeks up to and including the last pay day before the end of the qualifying week. This period is called the ‘relevant period’ (but this may vary depending on how the employee’s salary is paid).

What if the employee’s employment contract ends?

If an employee satisfies both the continuous employment rule and earning rule the employer must pay SMP even if their contract ends at any time after the start of the qualifying period the employer must pay SMP.

How much SMP do employee’s get?

- The first six weeks are paid at 90% of the employee’s average gross weekly earnings with no upper limit and

- For the remaining 33 weeks at the lower of either the standard rate of £128.73, or 90% of your average gross weekly earnings.

Is there anything else that employees must do to qualify for SMP?

YES they must:

- Tell their employer when they want their SMP to start and

- Provide medical evidence of the date the baby is due