The company’s maternity policy is that employees must return to work for 3 months after end of maternity leave, otherwise they must repay 3 months maternity pay. The employee in question said she would return to work after maternity leave in week 25 of pregnancy. She completed KIT days, but during her maternity leave, she found out her husband’s job was relocating. She let her manager know and had a meeting about it. Her line manager informed her that she had checked with senior manager and because she had worked so hard, the company had agreed she would not have to pay any maternity leave back – she would merely be required to come in for one more shift where she could hand back her ID etc. Acting on this information, the employee formally resigned at this meeting and followed this up in writing. She then completed her final shift during the notice period, when she was again told she would not have to repay any maternity leave.
The company now wishes to pursue the employee for the 3 months’ maternity pay, citing the policy. The employee’s contention is that whatever the policy says, it was amended by what her line manager told her. Is the employee legally obliged to repay the maternity pay?
The obligation of the employee to repay the maternity allowance first depends on whether the employee was being paid statutory maternity pay only, or contractual maternity pay alongside this. If the employee was solely receiving SMP, they have no requirement to pay back any amount if they resign during their maternity leave. Resigning does not impact the right of the employee to receive statutory maternity pay. There is also no obligation for an employee receiving SMP to return to work after their maternity leave ends.
Contractual maternity pay, which this employee is most likely on, differs to statutory pay. Employers can specify requirements which the employee must fulfil to receive their contractual maternity. They also have the ability to set out further stipulations, such as requiring the employee to return to work after their maternity leave in order to receive the payment. Employers cannot force employees on maternity leave to return to work, however, but they can claim back any pay outlined in the policy should the employee decide not to return.
In this case, the employee and her line manager had an agreement which changed the terms of the policy. The employer and employee in question created a verbal contractual agreement which outlined the terms of the employment termination. Here, the line manager and senior manager confirmed the employment contract could end on the sole condition that the employee returned for a final shift. The employee accepted this offer and completed it to the specifications set out in the agreement.
The verbal agreement made by employer and employee in this instance is the deciding factor. The employee formally notified her employer in writing that she would be returning to work whilst 25 weeks into her pregnancy. The employee, therefore, must argue that they created a new, oral and lawful contract during the meeting requested by the line manager.
This new oral contract must be presented as valid, on the premise that by informing the employee on two separate occasions that she would not be required to repay any maternity pay. The employee will need to consider how she evidences the new agreement that was put in place. If her resignation letters clearly sets out the new agreement then this is going to be her evidence but if this is not in writing then the employee is going need to consider what other evidence she has of this new agreement if this was all done verbally i.e. does she have witnesses that can confirm the new agreement.