Benefits and reinstated employees
09/02/05
The TUC confirms that the government plans to enhance rights to family benefits for employees who are reinstated after an appeal under new statutory dispute resolution procedures. The following TUC note is designed to brief union officials representing members who are reinstated and need to claim Statutory Maternity, Paternity or Adoption Pay.
Statutory dispute resolution:
Since October 2004 all employers have been required to have minimum grievance, disciplinary and dismissal procedures. Employees and employers are now required to use these procedures before applying to an employment tribunal. Failure by employers and employees to complete the procedures will have serious consequences, including increased or reduced compensation, depending on which party is found not to have complied with the procedure.
Some employees may be reinstated or re-engaged following this procedure. The Dispute Resolution Regulations already establish that, when this happens, employees have continuity of employment for employment rights, including paternity, adoption or additional maternity leave. This is not the case, however, for Statutory Maternity, Paternity and Adoption Pay.
Statutory Maternity, Paternity and Adoption Pay:
Statutory Maternity Pay (SMP) is the minimum level of maternity pay employers must pay qualifying employees. It is paid for up to 26 weeks (the employer administers the payment, and is reimbursed by the government). For the first 6 weeks SMP is paid at 90% of average earnings, then for 20 weeks it is paid at a flat rate - currently ?102.80 (?106 from April) or 90% of the woman?s average weekly earnings if that is less.
Statutory Paternity Pay (SPP) is also paid via employers, for up to two weeks, at the same level as flat-rate SMP.
Statutory Adoption Pay (SAP) is paid at the same flat rate for up to 26 weeks when a child is placed for adoption.
All three require employees to have completed a minimum amount of continuous service to qualify:
For SMP, 26 weeks into the 15th week before the expected week of childbirth;
For SPP, 26 weeks into the 15th week before the expected week of childbirth and continuous service from that week until the date the child is born;
For SAP, 26 weeks into the week the adopter is notified of having been matched with a child.
At present, employees who have a break in their employment because they are dismissed and then reinstated after an appeal under the new statutory procedure can fail the continuous employment test for eligibility to these benefits. Mothers may claim Maternity Allowance or Income Support instead of SMP. Adopters may qualify for Income Support on the grounds of low income and their local authority may provide income assistance equivalent to Maternity Allowance. Fathers taking paternity leave may qualify for Income Support on the grounds of low income, but otherwise they will usually have no benefit rights.
The new rules:
The government is introducing new regulations to seek to remedy this. The Statutory Maternity Pay (General) and Statutory Paternity Pay and Statutory Adoption Pay (General) (Amendment) Regulations 2005 ensure that reinstated employees are counted as having continuous employment for the purpose of these benefits. The period between dismissal and reinstatement is to be counted when working out how long an employee has been continuously employed.
The Regulations come into effect on 6 April 2005. They will apply to any reinstatement or re-engagement that takes place on or after 6 April 2005. Where an employee is reinstated on or after 6 April 2005 their employment will be treated as continuous and any break between their dismissal the reinstatement will be disregarded. The new rules will not apply where an employee is reinstated or re-engaged before that date. Employees who are reinstated or re-engaged before the new rules come into effect will need to consider claiming the other forms of benefit set out above.
Further information:
The Department of Trade and Industry produces a useful guide to statutory dispute resolution, Resolving Disputes at Work: new procedures for discipline and grievances, which can be downloaded:
New Disputes Resolution
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