Alabaster Ruling FAQs

What impact does the judgement have on the weeks when a woman is entitled to receive the standard rate?

None – no woman can receive more than the standard rate of SMP for the weeks when the standard rate is due.

 

Does the judgement affect Employer’s Occupational Maternity Pay schemes as we?

That will be for your employers to consider, looking at the terms and conditions of their particular schemes, whether the ECJ judgement has any impact.

 

Can employers recover the extra SMP paid out?

Yes. Any arrears of SMP paid from 6 April 2005 are recoverable.  Provided you pay the additional SMP using the correct field, the payroll system will automatically include the figures in your normal month-end calculation of payment HMRC.

 

Does the judgement mean that pay decreases can be taken into account, if for example, the workforce agree to pay a reduction if the employer is in financial difficulties?

No.  The ECJ’s decision refers only to pay increases.

 

What is the position regarding other payments such as bonus or commission which might be awarded retrospectively?

The ECJ decision is about pay increases.  The SMP calculation is based on pay actually received during the set period.  The position concerning late payments remains unchanged, that is, if a payment is made late it does not affect the SMP calculation.

 

What happens if contractual maternity leave is longer than statutory maternity leave?

The amending regulations define ‘statutory maternity leave’ as meaning ordinary or additional maternity leave under sections 71 and 73 of Employment Rights Act 1996.

 

If rises are announced in advance (3 year pay deals for example), and some of which are statutory (for example National Minimum Wage), may employers anticipate this and work out SMP taking these into account?

In these circumstances it might make sense for the employer to anticipate the pay rise because it would be more efficient to do so.  However, as with paying SMP in a lump sum, such anticipation may well result in overpaid SMP if the employee returns to work early before an anticipated rise comes into effect.

 

If a woman returns early from maternity leave, after extra SMP has been paid but the rise is now effective after her return, does she have to repay SMP?

SMP is included in the definition of ‘wages’ in the Employment Rights Act 1996.  Therefore employers have the right to recover overpaid SMP in the same way as they can recover any overpayment of wages or salary.  Employers would also have to make restitution to HMRC of any repaid amounts.

 

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