Economic downturn hits new mothers harder

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Maternity leave looks set to become even more financially challenging for British women. British women only typically receive 47% of the minimum wage while on maternity leave. Yet with UK inflation hitting a 40 year high of 9%, the real-world spending power of women on maternity leave is reducing dramatically. The British Chambers of Commerce also recently warned that the UK could tip into recession later this year. Experience during previous recessions suggests that women are disproportionately made redundant while on maternity leave during economic downturns.

Recent research by Maternity Action found that most new mothers only take 39 weeks of paid maternity leave, with just 45% taking longer. Rising costs may soon force mothers to shorten their planned maternity leave. However, if childcare costs increase markedly, some may find returning to work after maternity leave unviable financially.  This is especially so for lower earners and those without family to assist with their childcare needs.

In the UK, women may take up to 52 weeks’ maternity leave, made up of 26 weeks of “ordinary maternity leave” and a further 26 weeks of “additional maternity leave”.

Statutory maternity pay is paid for up to 39 weeks, with the first 6 weeks being paid at 90% of their average weekly pre-tax earnings and the remaining 33 weeks being paid at £156.66, or 90% of the workers average weekly earnings, whichever is lower. Tax and national insurance payments must be deducted. This means that, after 6 weeks, many are often left with little income. The resulting financial strain will clearly soon be exacerbated by inflation.

An employee’s employment rights  are protected during maternity leave, and they continue to accrue holidays, while retaining the right to return to their job during ordinary maternity leave. However, this does not prevent employers from making an employee redundant during maternity leave, although they should offer an alternative position where one is available in certain circumstances. Generally, making an employee redundant during maternity leave comes with an increased risk of litigation, since women may have grounds to claim discrimination concerning the dismissal.

According to the Equality and Human Rights Commission, some 30,000 women lose their jobs as a result of pregnancy every year. After the 2008 recession, the Alliance Against Pregnancy Discrimination reported an alarming increase in calls from women being made redundant whilst pregnant, or on maternity leave.

A new child brings joy to a family, but also inevitably creates additional responsibilities. Many parents therefore seek reduced hours or more flexible working arrangements. Recent research by Fertility Families found that 45% of employees want flexible working hours and remote working as ways to improve their employers’ parental leave policy upon their return to work. In addition, 22% of employees would like their company to increase rates of maternity and paternity pay. Such changes would help parents better balance their childcare and work responsibilities.

I have recently seen an increase in flexible working applications in my own practice, with the majority of applications seeking a continuation of working from home. In the wake of the coronavirus pandemic, many organisations now have proven systems in place to facilitate home working, which may help support flexible working. Hopefully the goodwill, flexibility and creativity that emerged during the pandemic will once again come to the forefront to help families find flexible ways to navigate the coming economic downturn.

Sarah King, partner and specialist employment lawyer, Excello Law

www.excellolaw.co.uk

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    Marja Toseland

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