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reckonable service for redundancy payout- mat leave(27 Posts)
Hi all, there was a bit of a discussion about whether mat leave should be included in service on my thread when I was turned down for vr, but was obviously a moot point then.
Now out of the blue they have granted it! So the question is whether all or part of my two mat leaves should be included in reckonable service. This is civil service, and the compensation scheme guidance specifically lists unpaid maternity leave as excluded, along with career breaks etc. In my department this basically means the whole six months of additional maternity leave as it is recorded on hr system as unpaid mat leave, even for the three months of smp.
Anybody know for sure if this is right? I have to sign a commitment to leave stencil before I get the official estimate so I am doing lots of maths to check the cost benefit analysis!
As per my answer on your previous thread, maternity leave counts as continuous service and must be taken into account in calculations of redundancy pay.
Under the Equality Act it is unlawful to treat you less favourably because you have taken maternity leave so when calculating any redundancy payout, you must be treated as though you were at work during that time.
Thanks flowery. On my other thread I was just assuming it wasn't included based on the maternity policy which said it wasn't included in reckonable service for pensions, which is the same people as run the redundancies, but assumed that was my error in assuming. However, I read the Civil Service Compensation Scheme in detail yesterday- eg the redundancy specific scheme- and it definitely says unpaid maternity leave is excluded from reckonable service! Obviously continuous service and reckonable service are different things, I don't need to worry about the qualifying through continuous service part as I have been there six years, it is just the reckonable service part that I am interested in as my payout will be around £4k higher if additional maternity is included in reckonable service.
Statutory redundancy pay is calculated on length of continuous service. Enhanced redundancy schemes can set more terms and conditions for staff to qualify, but penalising women who have taken maternity leave by paying them less redundancy than they would have received had they physically been at work isn't something they can do.
if they want to set terms and make "reckonable" service for the enhanced scheme less than continuous service, that is fine, as long as what they are including/disregarding for the purposes of calculations isn't discriminatory. Disregarding time spent on maternity leave would be discriminatory.
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Thank you flowery. Given I will already get an enhanced package, and the size of the organisation involved, Do you think it is worth taking it on? Should I quickly join the union before signing?!
The union probably wouldn't advise you on this if you only join now - otherwise no one would ever join until they had a problem.
I've no idea whether it's worth taking it on really. I don't think size of organisation is relevant to that really. I'd suggest you work out the financial difference. An actual figure of cold hard cash you'd be missing out on might make you think it's worth it. And writing a letter to HR isn't that taxing really. If they push back and say it is perfectly lawful, you can then either decide to accept it or take it a bit further. You're not committing yourself to a tribunal case or anything just by raising it.
The thing is I wont know for sure if there is an issue or not until I receive my calculation from civil service pensions, which wouldn't be for a month or two, so I could join now before the issue materialises. I was previously a member of pcs in an old job (when I joined due to an issue) so will see if I can revive my membership. It wouldn't be an issue for my hr department as all redundancy related payments etc are dealt with by civil service pensions. If my suspicions are correct and the overall CSCS does include unlawful discrimination I assume the union might want to get it changed for the benefit of all the thousands of other female civil servants.
Just because payments are calculated elsewhere doesn't mean maternity-related discrimination isn't an HR issue. It is - they are the department who should be policing the Equality Act in relation to employment practices, even if those practices are administered elsewhere.
Ok, thanks. I will see what the calculation comes back as. This is what the CSCS says:
Current reckonable service will not include:-
the break between employments if the break is less than 28 days
any periods of unpaid leave
Sick Pay at Pension Rate (SPPR)
Periods of unpaid sick absence
Unpaid maternity leave
Service with a by analogy scheme
Work step service
Have reinstated my union membership just in case. Have scoured the web but cant find anything relating to this other than the civil service guidance excluding it, but it might be worth a letter to HR. I do assume they would say the CSP is the oracle in this and would be unlikely to question it when it is in black and white in the guidance.
This has been really bugging me.
I am guessing that the legal justification is that this is a statutory redundancy scheme made under s1 of the Superannuation Act 1972.
The Rules were laid before Parliament in the form of the Civil Service Compensation Scheme 1994. I found the rules here www.civilservicepensionscheme.org.uk/media/10737/cscsdec2010_tcm6-38441.pdf
Rule 12.1.2(1) defines circumstances in which those absent from work are to be treated as though they are at work and it includes those on "ordinary maternity leave" and those in receipt of SMP as well as those in a variety of other circumstances.
The argument would run, I guess, that people on maternity leave are not being subject to any detriment but being treated, during their ordinary maternity leave, in exactly the same way as those absent for what the rules see as "justifiable" reason.
If someone thought that to be unlawful discrimination I guess it would need to be challenged by way of judicial review, given that a court cannot ordinarily look behind that which has been decided by Parliament, seeking a declaration of unlawfulness.
That nobody has might be that it seems to be a generous maternity scheme, particularly in comparison with what others get.
I'd be interested in what flowery thinks?
I think there is some confusion here and there are two different issues (either that or I have completely got it wrong?!) continuous service and reckonable service are two completely different things. Obviously continuous service is not affected by maternity/adoption/parental/ sick leave. However reckonable service is the amount of service calculated towards your final pension. Are you taking your pension early when you take redundancy? So are you trying to calculate your lump sum and pension payable from taking premature retirement? Otherwise I can't see where reckonable service comes in to the equation for you until such a time?
I agree that continuous and reckonable service have been mixed up.
Length of service for the purpose of redundancy payments, however, is calculated according to the number of days people are in receipt of their daily rate of pay, according to the statutory scheme I referred to above. The specific rule I mentioned says that the member of staff is to be treated as though they were in receipt of their ordinary rate of pay (even if they weren't) if the reasons they weren't are on the specified list.
That is referred to as reckonble service for the purpose of that scheme.
It is nothing to do with pension entitlement which may, I suppose, be calculated yet differently.
I have to say I spend my days reading and interpreting law and those rules are amongst the most impenetrable I have ever seen.
I am not defending them, btw, just trying to explain where it comes from.
Thank you both. Yes, it is because it is a scheme laid before parliament that I assumed it couldn't be wrong. That being said, it has been changed over the years, including changes to the number of weeks of ordinary maternity that are included, presumably to being it in line with changes in the law.
Yummum. I'm only 35, this is redundancy not early retirement. The confusion comes from the fact that the civil service compensation scheme CSCS is run as part of the civil service pension scheme. Both talk about reckonable service, and appear to apply the same rules to what is reckonable whether for redundancy or pensions.
Continuous employment is only used in terms of meeting the minimum criteria ( eg 2 years service) and establishing which periods of employment are included if you have have had multiple jobs within the civil service( which I have but all overlapped). It only seems to be government that use reckonable in terms of redundancy, presumably because the two schemes are so intertwined. However. In my last thread a couple of different people told me that additional mat leave could be excluded from pensions but not from redundancy payouts, hence my question.
Stevem, surely it is still discriminatory though- the part you referred to was about assumed pay to calculate a payout when someone was on maternity leave- but only includes smp and Oml. Surely that suggest if they made someone redundant after the 39th werk they wouldn't have to pay them a penny!
For me, what it comes down to is what they class as unpaid mat leave. Our ordinary maternity leave is on the hr system as paid maternity, but the whole of additional maternity leave is marked as unpaid, even for the extra three months of smp. Since it is calculated by the pensions scheme i assume it will also exclude all of aml as unpaid. I am not sure whether receiving smp counts as paid leave pr not- certainly not on our hr system.
Unpaid maternity leave, ie once SMP had finished, can be excluded from reckonable service for pensions purposes, but that's different.
For me, treating someone less favourably because they took maternity leave is discriminatory. The comparator shouldn't be someone who has been absent for another reason, the comparator should be if the same person hadn't taken maternity leave at all.
I think, in fact, I have misinterpreted the scheme rules.
12.1.4(2) defines periods which do not count towards Reckonable Service and includes "any period of unpaid leave".
They must regard that period when people are in receipt of SMP only and any additional period of maternity leave is unpaid leave.
Whether that is discriminatory or not is arguable, there are a variety of reasons why people may be on unpaid leave and they are each treated equally?
When I was about to take maternity leave from a university they sent me their document outlining my entitlements. It was wrong, so I pointed this out and after a bit of internal back and forth they agreed and changed it. I don't know if they gave other people back pay (I suspect not) but my point is just because it is written down in a policy document doesn't mean something wrong can't be challenged.
flowery, I don't quite understand why it is discriminatory to exclude unpaid maternity leave from redundancy calculations but not from pensions calculations?
What would the legal basis for that be?
Bilberry, I suspect it is slightly different challenging a university policy document to a national statutory scheme.
As I said before, my view is the only way that this could be challenged would be by way of a judicial review seeking a declaration that this element of the CSCS was discriminatory within the meaning of the EA 2010.
Whether such a challenge would succeed is anybody's guess.
That's why I have rejoined the union! I think if it is wrong it is much bigger than my case, and the union might want to question it so that in future years it might be changed.
If it counts my smp as paid I will be happy- that is the midpoint in terms of my potential payout. I do think there is an argument that smp is paid maternity leave, even if that is not how my hr department choose to interpret it.
In terms of not accruing pension I think I read something yesterday saying there was no obligation to make up the pension contributions during unpaid mat leave- I suppose the difference is that when I am paid I am contributing ( even though its defined benefit!)
Pensions are a bit more complex and come under other legislation. An employer is obliged to provide contractual benefits (such as holiday, company car, gym membership or whatever) throughout maternity leave, whether paid or unpaid, but pensions are dealt with separately and pension contributions currently only have to be made during paid maternity leave. It's entirely possible that may be challenged under the Equality Act at some point, but that's the position.
In terms of general treatment though, it is imo not only arguably discriminatory that treating a women less favourably as a result of her taking maternity leave than you would have done had she been at work, it definitely is discriminatory. As I say, the comparator for treatment of women on maternity leave isn't someone who has been absent for another reason, like a career break, illness or whatever. The position needs to be compared to how she would have been treated had she not taken maternity leave. Therefore, imo, if the OP would have received £xxxx as a redundancy payment had she been continuously physically at work, but as a direct result of taking maternity leave she receives a lower figure, she has been treated less favourably as a result of her maternity leave.
That's exactly my point though, flowery, both pensions and redundancy arrangements in the civil service are statutory schemes - I can't understand any proper legal basis for distinguishing between the two for these purposes.
It is the lawyer in me that wants to understand the difference.
Well as I say, perhaps someone will challenge the pensions situation under the Equality Act at some point. Until they do, the current situation is that pensions are treated differently to other contractual benefits.
Funny you should say, flowery, that contractual benefits are maintained throughout mat leave- my dept mat policy says contractual benefits are up for debate during AML:
Statutory Ordinary and Additional Maternity Leave.
Whilst Departmental Maternity Pay is a Civil Service arrangement, Statutory Maternity Pay is a legal requirement. It is paid to all women who qualify whether or not they intend to return to work.
Irrespective of length of service, hours worked and appointment status (e.g. permanent, fixed-term or temporary), you are entitled if you intend to return to work after the birth of your child:
to a period of 26 weeks statutory ordinary maternity leave (OML), within which you will benefit during the maternity leave period from all your normal terms and conditions of employment, except salary;
to a period of 26 weeks statutory Additional Maternity Leave (AML), within which Contractual benefits during this additional absence are a matter for agreement between employer and employee;
I thought the only thing that changed between OML and AML was the requirement to get the exact same job back afterwards.
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