If an Employee Resigns on Maternity Leave What Do I Pay?
There can be many unknowns for Employers and its Employees who are on maternity leave about when an individual might wish to return from leave, will they still want the same working pattern when they do, or will they choose not to return to the company at the end of their leave.
If your employee decides they are not coming back to their job, then the next question is what are their pay entitlements?
You always need to consider maternity as two separate things – maternity leave and maternity pay. Statutory Maternity leave (SML) is 52 weeks and Statutory Maternity Pay (SMP) is payable for 39 weeks.
If an employee resigns (for example, during week 20 of SML) then they would not be required to come to work during their notice period and, if they did not have another job to go to, they would receive their full pay for their notice period and then still receive their Statutory Maternity Pay (SMP) up to 39 weeks. SMP is topped up to their full pay in this instance.
There is one exception here – if the employment contract states that a Company must give at least one week’s more notice for terminating an employee than the statutory minimum notice period then only SMP is payable during the notice period. (Statutory minimum notice for the employer to terminate the contract is one week’s notice where the employee has been employed for at least a month but less than two years, and then one week’s notice for each year of service up to a maximum of 12 weeks’ notice).
If an employee did have another job to go to, then their SMP would stop when they started the new job.
Contractual Maternity Pay is slightly different and will depend on the contract of employment you have. If an employee resigns during maternity leave (again, for example, during week 20 of maternity leave) they need to be paid their contractual maternity pay until the end of the notice period. However, the contract may have a clause which requires the employee to repay any contractual maternity pay if they do not return to work for a set period, usually 3 or 6 months. This is worth checking. If this is the case, then the employee would only repay the amount above the SMP rate.
All contractual benefits, including annual leave continue to accrue until the last day of employment.
If you have any queries about any of the above then please get in touch with us and we will be very happy to help.