Presently, legislation on the length of maternity leave and how it is paid varies from one Member State to another. The 1992 Directive on the introduction of measures to encourage improvements in the safety and health at work of pregnant workers and workers who have recently given birth or are breastfeeding, the so called Pregnant Workers Directive, provides for a minimum 14 weeks of maternity leave throughout the EU. Whereas France, the Netherlands and Spain offer 16 weeks the UK offers 52 weeks.
In October 2008, the Commission presented a proposal for a Directive amending the Pregnant Workers Directive. The Commission proposed to extend the minimum period of leave from 14 to 18 weeks. However, in April 2009, the European Parliament Women's Rights Committee voted to extend the period of paid maternity leave to 20 weeks. The European Parliament was divided over the issue but the EPP and ALDE groups were able to block Edite Estrela’s report at the last plenary session before the European elections. The European Parliament has, therefore, decided to postpone the vote and refer back to committee the report. Last February, the Committee voted, again, in favour, of extending fully paid maternity leave from 14 to 20 weeks. At the request of the European Conservatives and Reformists group (ECR), the European Parliament’s political group leaders have agreed to postpone the vote on the legislation. Moreover, they agreed that a full impact assessment of the proposal should be carried out. In fact, the European Parliament wanted to vote on such plans without having any idea of the costs. The Ramboll Consulting Group’s impact assessment was conducted in ten Member States, and it has revealed that the Committee’s proposals could substantially increase costs in countries such as the UK, Germany, Spain. Marina Yannakoudakis, Conservative MEP and ECR women's committee spokesman, said "MEPs need to take a long hard look at the cost of these plans to governments and businesses. (…) I hope that, once they realise the damage that could be done to business, MEPs will rethink the plans." However, despite strong opposition from the UK and Germany, despite all the warnings from business leaders and Conservative MEPs of the impact of the Committee’s recommendations on the European Economy, being aware of the costs and the impact of such proposals on business and national governments, the European Parlament, on 20 October, endorsed the Committee’s proposals.
The European Parliament adopted the Edite Estrela’s report by 390 votes in favour, 192 against and 59 abstentions. It voted, therefore, to extend fully paid maternity leave from 14 to 20 weeks in all EU member states, going beyond the Commission’s proposal to extend it to 18 weeks.
The European Parliament has also included in the proposal a compulsory minimum two weeks of paternity leave, fully paid.
The Commission has proposed that new mothers shall be paid 100% of their salary but with a possibility for Member States to set a ceiling at the level of sick pay. Hence, Member States could fix a lower amount, which must not be less than the national rate paid to those on sickness leave.
Article 153 TFEU (Article 137 EC) provides that the Union “shall support and complement the activities of the Member States” in a vast number of fields, “…in particular of the working environment to protect workers' health and safety, working conditions, social security and social protection of workers, …, equality between men and women with regard to labour market opportunities and treatment at work, the combating of social exclusion, the modernisation of social protection systems.” These policies are already extensively governed by EU legislation and need to be stopped. The Commission has stressed that according to the ECJ’s case law the Union may adopt legislation based on Article 153 to regulate questions of pay.
In the UK, new mothers received 90 per cent of their average earnings for the first six weeks, and then Statutory Maternity Pay is £124.88 a week for the remaining 33 weeks. State paid maternity allowance has a ceiling of £124.88 during the 39 weeks of payment. Consequently, the UK’s ceiling is substantially above the level of statutory sick pay, which is £79.15 a week. The former Government presented in February 2009 an Impact Assessment on the Commission’s proposal. Although the level of the allowed cap still has to be clarified, according to former Minister of State for Business, Pat McFadden, assuming that the UK would be able to keep its standard rate of SMP as a ceiling on maternity pay as this would be more that statutory sick pay, there would not be additional costs in this regard.
However, the European Parliament has voted to amend the Commission proposal so that workers are paid their full salary while they are on maternity leave. The European Parliament has voted to introduce compulsory payment of 100% of salary for workers on maternity leave. According to the European Parliament “Workers on maternity leave shall be paid their full salary and the allowance shall be 100% of the last monthly salary or the average monthly salary.” Such amendment, if adopted, would entail a substantial increase in maternity pay in the UK. In fact, it would double the costs of maternity leave for taxpayers. The European Parliament proposal to extend maternity leave to 20 weeks on full pay could cost to the UK an additional £2.5 billion a year. Obviously, such proposal is facing strong opposition from member states, particularly from the UK and Germany.
Under the Commission’s proposal a mother would be obliged to take from the 18 weeks a compulsory maternity leave of at least six weeks after childbirth. Consequently, women would be prevented to go back to work for six weeks after having their babies. Such proposal would create additional costs as the UK provides for a compulsory leave of two weeks after birth. According to the above-mentioned impact assessment, the additional annual costs to the Exchequer from paying SMP and MA to mothers for six weeks compulsory leave would be around £3.7m per year, around £843,000 per year for small businesses, around £1.7 million a year for large businesses. The total costs would be £6.9m year. The MEPs also voted to require new mothers to take six weeks compulsory maternity leave following birth, but fully paid. Therefore, the costs would be even bigger.
Moreover, Member States would be required to ensure that women can choose when to take the non-compulsory part of maternity leave. Therefore, the remaining part could be taken before or after labour. According to the European Parliament “Member States shall take the necessary measures to ensure that workers can decide freely and without compulsion whether or not to take the non-compulsory period of maternity leave before childbirth.” In the UK, women may take their maternity leave any time from the 11 week before the due date. Several Member States want to keep the right to decide within their national legislation which part of maternity leave must be taken before and after childbirth. They considered that certain limits should be set for a range of reasons such as the protection of the health of the pregnant worker and of her child, the predictability of the planning of maternity leave as well as to avoid situations where the worker takes a substantial proportion of her maternity leave before childbirth.
The Commission’s proposal also aims to protect women against dismissal and provides for a right to return to the same job or an equivalent one after maternity leave. The European Parliament endorsed the Commission’s proposal to ban the dismissal of pregnant workers from the beginning of a pregnancy but it has extended it to at least 6 months following the end of the maternity leave. Dismissal during that period would have to be fully justified in writing. Under the UK Employment Rights Act all workers who have been employed for a period of one or more years are entitled to request a written statement of reasons for dismissal. Moreover, women dismissed during their pregnancy or maternity leave have the right to request written reasons for their dismissal. However, under the draft proposal women who are dismissed within/after six months of return to work and who have less than one year of service would be entitled to request written reasons for their dismissal, which would entail further costs.
Member States would also be required to adopt measures in order to ensure the right of women to ask the employer during maternity leave, or on return, for changes of working hours. The UK has already introduced a right for parents they have worked for their employer for six months or more to request work flexibility. The draft proposal would entail further costs to the UK as it would required to the same rights to be conferred to mothers who have less than six months of service. According to the BCC “to require employers to prove that flexible working would have a more adverse effect on the business than the worker in question will be very difficult to implement in practice, particularly for SMEs who do not necessarily have expert HR professionals to rely on.”
Some Member States are also concerned with the possible negative consequences of a further extension of maternity leave, as regards the situation of women on the labour market. According to BusinessEurope, the employment rate of women would not be improved by extending the terms of maternity leave. In fact, it argued that more regulation might discourage employers from hiring women. As Marina Yannakoudakis said "Stricter EU rules on maternity leave will make it harder for women of child bearing age to get work, particularly in small businesses." She has been stressing that the proposal as amended by the European Parliament would "lead to further indirect discrimination against women in the workplace.”
The EU Member States have taken different positions on the proposal, therefore they have not reached yet a general approach. There are a wide variety of national practices as regards maternity leave. Maternity leave is paid in different ways and at different rates. The majority of EU Member States do not offer fully paid maternity leave for the total available period. Therefore, it should be the Member States and not Brussels to decide on maternity leave issues and, particularly, on social security benefits. There is no need for further EU legislation. The UK has already in place legislation, which gives pregnant workers entitlements that go beyond most of the minimum requirements of the 1992 Directive. It provides that all pregnant workers are entitled to one year’s maternity leave but allows them to choose the amount of time to take off work according to their personal circumstances. Brussels should not decide how much maternity leave British mothers should take.
Several Member States, including the UK, were already concerned that Commission’s proposal would further increase employers’ costs as well as social security expenditure. Obviously they are now even more concerned with costs resulting from the European Parliament proposed amendments. The proposal would not have the same impact in all Member States. For instances, the proposal would have no impact in Poland and Estonia but it would have a serious impact in member states such as the UK and Germany. According to the former Government’s Impact Assessment, the Commission’s proposal would entail annual costs around £6.9m. However, if the European Parliament’s amendments are adopted the UK would face a bill of £2.5bn a year.
At a time when governments are seeking ways to cut public spending and businesses are struggle to survive in the aftermath of the economic crisis, the European Parliament adopts such amendments which would impose massive costs on businesses and governments, with already overburdened social security systems. While the European Parliament was voting on such damaging proposals the Government announced the most severe budget cuts in decades. As Philippe de Buck, director of BusinessEurope, said “It is ironic that at a time when many governments are looking to slash spending, the European parliament is looking at potentially imposing new costs worth billions of euros on industry…”
The proposal is going through the ordinary legislative procedure (co-decision). The Member States are very unlikely to accept the European Parliament amendments as they would considerably increase costs at a time of serious economic constraints. It is important to bear in mind that the Commission’s proposal would have less impact on business and national social security systems, nevertheless it would also entail further costs. The UK would not be able to veto the draft directive as QMV is required at the Council. According to the Financial Times a government spokeswoman said that the government “will be working hard with other EU Member States to oppose the imposition of a requirement for fully-paid maternity leave and we know that many other countries share our concerns about the costs of this directive.” It remains to be seen what will come out from the negotiations with the European Parliament.
Maternity issues and social security benefits should be dealt at national level and not at EU level. Social and employment policy is one of the areas more costly to the Exchequer and business. The Conservative party must keep its manifesto promise and repatriate powers over social and employment policy otherwise the UK employment and social issues will continue to be decided by Brussels through regulations and directives adopted by QM and the ordinary legislative procedure, as the present proposal.
