Smaller businesses trying to avoid maternity and cover costs.
Businesses struck by the recession are cutting their costs by refusing to employ women of childbearing age, ChannelBiz can reveal.
With employment laws surrounding maternity tight, employers are cutting their risks and costs by not taking on women who are at the age to have a family and settle down.
The law currently states that ‘ordinary maternity leave’ is for a period of up to 26 weeks. However women who have been in continuous employment with their employer for the past six months are entitled to ‘additional maternity leave’ which is another 26 weeks.
Under the law women are entitled to Statutory Maternity Pay (SMP) for the first 18 weeks of maternity leave, which is 90 percent of an existing salary for the first 6 weeks of their leave, and £100 per week for the next 12 weeks. Although some of this is subsidised by the Government, the bulk of it is paid by the employer.
In the past companies have been taken to task and made to pay compensation after making pregnant women redundant or demoting them, which ChannelBiz has learnt is a common practice.
One woman claimed: “I was suspended at 30 weeks pregnant, refused any keep in touch days while on maternity leave and then made redundant the day before I was due to go back. My solicitors love me because I’m a 100 percent win case.”
Others stated they had been demoted to lesser positions because of their “conditions”.
“I threatened to take the employer to court and was given a good settlement,” one claimed.
This has led companies looking to survive in the current economic climate to question “whether its worth employing women of childbearing age at all”.
One told ChannelBiz: “We can’t afford to pay a pregnant woman maternity pay, as well as take on cover for her while she’s away. The laws are so tight around this sector that it suits us better to just not employ them in the first place.
“It’s wrong, but we don’t have much choice, and let’s be honest no employer really wants to hire a woman who is going to disappear, get married and probably have more than one child while she’s with them. It’s throwing money down the drain.”
Simon Murray, chairman of the commodities trading company Glencore seemed to agree with the sentiment. He was quoted by Contact Law as claiming: “Pregnant ladies have nine months off. Do you think that means . . . what I’m absolutely desperate to have is young women who are about to get married in my company, and that I really need them on board because I know they’re going to get pregnant and they’re going to go off for nine months?”
However, if they play it carefully it seems these employers are covered.
One employment lawyer told ChannelBiz: “The law around maternity payment and employment is a tough one, and employers know they have to tread very carefully when it comes to this. The law makes it clear that employers cannot discriminate against women who are pregnant.
“And if the primary reason for an employee dismissing an employee is that they are pregnant, this will be a case of automatic unfair dismissal. This will likely mean that the employer will have to pay compensation and face a costly legal case.
“It’s therefore sad, but common that many smaller businesses are trying to avoid this. We’ve heard rumours that many companies, struggling to cope in the recession are avoiding these problems altogether by not employing women of a childbearing age.
“The thinking behind this is, that they can’t afford to pay her maternity rate- after the standard government pay- nor afford her cover.
“Of course this is discrimination but they are able to get away with it because a loop hole in the law means that they do not have to employ a woman, nor give a detailed reason why they chose a male or older candidate over her.”
And it seems thing could get worse with the Telegraph reporting that the Coalition plans to make firing easier.
In a dossier from May the paper claims that the government wants to make firing underperforming employees easier in an attempt to free up the labour market and create jobs.
It also wants to extend flexible working to anyone with a job, in an attempt to overcome Tory unpopularity among women, which analysts warn could be a serious threat at the next election.