Briefing Note
UK Maternity Pay Policy Update

A mother has won her nine-year court battle for higher maternity pay. Michelle Alabaster was awarded £204.53 plus £65.86 interest when the Court of Appeal ruled on her case, after it had been referred to the European Court of Justice (ECJ).

Ms Alabaster began working as a copy typist for the Woolwich Building Society in 1987. By 1995 she had been promoted to the position of an administrator in the client services section of the computer services department. In July 1995, Ms Alabaster told the building society that she was expecting a baby and she commenced her maternity leave on 8 January 1996.

The Woolwich calculated Ms Alabaster’s earnings-related maternity pay on the basis of her earnings in the fifth and sixth months of her pregnancy. This was the period, under the law at the time, for calculating the 90 per cent of earnings which is payable for the first six weeks of maternity leave. Ms Alabaster’s contract of employment provided for a further four weeks of earnings-related pay, after which she received a flat rate.

In December 1995, Ms Alabaster received a pay rise of over 10 per cent, with effect from 1 December. However, this increase was not reflected in her statutory maternity pay because it came after the relevant period used to calculate this.

Ms Alabaster’s original complaint to the Employment Tribunal was that her employer’s failure to reflect her salary increase in her maternity pay amounted to sex discrimination. She did not cite a male comparator.

When the case came before the Court of Appeal, it referred certain questions of law to the ECJ. In March 2004, the ECJ ruled that a woman who receives a pay rise at any time before the end of her maternity leave must receive the benefit of this in the earnings-related part of her maternity pay. Failure to do so was a breach of the equal pay provisions of European law. The ECJ judgment said that ‘to deny such an increase to a woman on maternity leave would discriminate against her since, had she not been pregnant, she would have received the pay rise’.

Following this judgment, Ms Alabaster renewed her appeal. The Court of Appeal decided that the parts of section 1 of the Equal Pay Act which impose the requirement for a male comparator should be disapplied, so Ms Alabaster could succeed in her claim.

As a result of this case, the Government introduced the Statutory Maternity Pay (General) (Amendment) Regulations 2005, which came into force on 6 April 2005. These require an employer to recalculate the level of maternity pay if a pay rise takes effect at any time between the start of the reference period and the end of the maternity leave.