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Counting the cost
As the UK finally claws its way out of recession, the last thing that the Exchequer or UK plc wanted to hear was news that a European Union committee has voted in favour of extending maternity leave in Member States by 20 weeks – a move that could cost the UK £2bn.
Under current EU policy, which was agreed in 1992, minimum maternity leave for Member States is set at 14 weeks, during this time women must get paid at least as much as the nation's sick pay rate. However, draft legislation from the EU Women's Rights Committee proposes increasing this to 20 weeks and suggests that women receive their full salary throughout. In addition, the committee is proposing two weeks fully paid paternity leave for fathers.
Existing UK policy on maternity leave is not as generous as other Member States and the proposed draft policy, if ratified, would signal a huge change for UK companies, trebling the current basic maternity entitlement. Under existing regulations mothers can take up to one year of maternity leave, in which during the first six weeks they receive 90 per cent of their salary, followed by 33 weeks on Statutory Maternity Pay (£123/week, in addition to maternity allowance and £6,000 in tax credits), with the remaining leave unpaid.
Following the amendment of the Pregnant Workers Directive in the European Parliament, Dr Adam Marshall, director of Policy at the British Chambers of Commerce (BCC), said: "The Pregnant Workers Directive should be about setting minimum EU standards for the health and safety of pregnant workers – not adding new payroll costs for overburdened companies and national social security systems.
"This vote introduces complexity and uncertainty, which are totally unnecessary, as the UK and other EU countries already have well-developed national maternity pay systems. Companies need to be given the space to deliver growth and jobs - without being hamstrung by new and costly maternity rules."
The BCC is urging the government to demand a three-year moratorium on new EU employment law, unless the Commission can prove that changes in legislation will create jobs.
Small and Medium-sized Enterprises (SMEs) would be the worst affected by policy changes as much of the economic burden of increased maternity entitlements would fall to employers and not the Exchequer.
Of greater concern is the impact that such a move could have on gender equality in the workplace. Many SMEs are already reticent to employ women of child-bearing age – as situation many believe would only worsen should the draft proposal become law.
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