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Motherhood: lifestyle choice, duty or right? Maternity Leave in 2007

“A face only a mother could love”

Europe’s working-age population is shrinking and there is concern that this demographic decline will lead to a similar economic collapse. With fewer workers to pay the health and pension bills of an elderly population, states will face unforeseen financial burdens. The current European ratio of over 65s to those of working age is one-to-four and is set to rise to one-to-two by 2040.

In Germany, in 2005, births fell by 2.8% on the previous year and it has Europe’s lowest birth-rate (see fig 1). One minister warned that they were risking “turning the light out” if it did not pick up.

(Fig. 1)
Births per 1,000 inhabitants in Europe in 2004
Germany: 8.6
Latvia: 8.8
Poland:9.3
Hungary: 9.4
Greece: 9.4
Czech Republic: 9.6
Austria: 9.7
Italy: 9.7
Spain: 10.6
UK: 12.0
France: 12.7
Ireland : 15.2
EU average: 10.5
Source: Eurostat

Women account for 45% of the European workforce and the question is: “How do they contribute economically whilst providing the future workforce?” Governments introduce incentives to encourage children, but companies are left to pick up the tab. Why should they pay for women’s maternity leave rather than governments keen for new life?

In the UK, the Office for National Statistics (ONS) reports that the fertility rate (births per women) has risen for five years in a row and was 1.87 in 2006. This 26 year high represents the first hint of a baby boom, news welcomed by economists.

Keith Spicer, of the ONS, says it is older mothers and migrant families making these figures look good, as younger British-born women choose to have fewer babies. Stephen Evans, chief economist of the Social Market Foundation, says: “Older mothers and migrants are two vilified groups when actually they are doing a lot of good for our economy.”

The fertility rate is heading towards the magic 2.1 mark, where the demographic deficit would go into reverse, and for the first time in decades, more people would be born than die.

Alan Pacey, of the British Fertility Society, said: “These figures reflect a change in the decision women are making about having babies. It’s reassuring that more are getting pregnant and starting to reverse the population declines; but I wouldn’t want these figures to send the message that it’s OK to have babies much later in life. Below the age of 35 is the best time to get pregnant.”

As with everything else, there are environmental issues to be considered, and David Nicholson-Lord, of the Optimum Population Trust, said: “We advocate that people stop at two or have one fewer child than planned for environmental reasons. The current population is unsustainable.”

Many aspects of employment law are becoming standardised across Europe, there are large discrepancies in the area of maternity benefits. A 2006 study found the UK and Ireland have the lowest levels of statutory maternity pay in Western Europe.

The study, by Mercer Human Resource Consulting (MHRC), compared statutory pay for six months’ maternity leave across Europe. It found large differences in the number of weeks’ paid leave (see fig 2).

(Fig. 2)
Weeks’ paid maternity leave
Sweden: 96
Norway: 52
Denmark: 50
UK: 39
Czech Republic: 28
Italy: 22
France (1st & 2nd child): 16
Poland (1st child): 16
Netherlands: 16
Spain: 16
Germany: 14

Mark Sullivan, of MHRC, said: “The length of maternity leave offered does not necessarily correlate to the levels of benefits paid. Some countries give long leave, but low pay, and not everyone can afford to take the extended leave, however generous it may appear.”

The study showed that in six months, a woman earning €22,000 a year, the figure would be €5,300 in the UK and €5,850 in Ireland. Entitlements in Germany would be relatively low at €5,900, with those in France, Spain and the Netherlands all at €6,750. At the other end of the scale the pay in Italy would be €9,150, while in Denmark and Norway it would be as much as €11,000.

The EU outlaws discrimination against pregnant women and says a woman on maternity leave must be able to return to her job without a loss of pay or status.

We spoke to the head of compliance at a financial services company who was expecting to be promoted to director. She went on maternity leave and, in her absence, a colleague was given the promotion. On her return, now reporting to her colleague, she was plainly not in the same position as before.

The situation was tricky and she says: “You can’t go to tribunal because essentially you are broke.” Ironically her colleague is now on maternity leave.

Since April 2007, in the UK, a new mother is entitled to 52 weeks’ maternity leave, but only 39 weeks’ statutory maternity pay (SMP). To get SMP a woman must have worked continuously for the same employer for more than 26 weeks by week 25 of her pregnancy and must also earn at least €100 per week, before tax.

The self-employed are unable to get SMP, but may qualify for maternity allowance for up to 39 weeks and the amount depends on earnings. Where couples adopt, the ‘primary adopter’ receives the main allocation of adoption leave and statutory adoption pay, the same as for maternity.

Regardless of how long a man has worked for an employer he is entitled to two weeks’ paternity leave and may qualify for statutory paternity pay; €150 or 90% of average weekly earnings. Any company can offer more than the statutory leave and pay levels: this is called enhancement.

UK pay levels are low compared to the rest of Europe, but more companies offer benefits above the statutory minimum to create a more attractive employment package.

Many surveys rate ‘top employers’, and company websites are consistent in showing high corporate ethics, but parental benefits frequently seem to be overlooked, as if family life and workplace qualities are completely separate, rather than bound together, as they are for most employees.

You would have to be brave to ask about parenting benefits at a job interview, but often details are not made widely available.

ExecutiveSurf contacted HR departments of several leading companies and their responses on this issue were muted. BP’s response was typical; in line with the others, its maternity policy is not flagged on their website and a spokesman said: “Clearly there are differences from country to country, but the intent is to offer as flexible a working environment as possible.”

Earlier this year, the Guardian conducted a survey to throw some light on the disparity of parental benefits offered by leading companies. Its results were interesting.

They found many companies were reluctant to talk about these benefits and many others proudly announced provisions that were no better than the statutory minimum. They varied dramatically by sector.

The standard in supporting new parents was set by the public sector and universities. These employers have a high percentage of women staff, whereas in the private sector the firms with the best packages were low on female staff; perhaps in a better position to be generous to a small minority.

Jaguar and Land Rover topped the survey, offering a year off on full pay. Only 10% of their employees are women and Des Thurby, director of HR, says the package was specifically introduced to help female staff and to attract more women to the company. “We’re an engineering-based company, and professional women are a scarce resource.”

They have a 99% return rate and Thurby believes flexible working conditions pay dividends. He says: “If I have two women working part-time, I know I get more productivity than if I have one person working full-time. I think people feel we’ve gone the extra mile for them, so they will go the extra mile for us. What it generates is trust.”

There is a growing practice of offering return ‘bonuses’, which may look like an enhancement, but may act as an erosion. Women need good pay during the period they are on leave, but the bonus withholds some of that money and someone who does not return to work will permanently lose that portion of maternity pay.

Cancer Research offers women an “early return option” so they can remain on full pay during maternity leave, provided they are back at work in the 17th week after its start.

Sarah Jackson, of Working Families, is apprehensive and says: “What you want is a culture in which women want to return to work after a baby, not one in which they are forced back to work with the offer of a cheque. You don’t want staff working resentfully or half-heartedly.”

Maternity leave is a contentious issue. A woman who is stepping out of the marketplace to have a baby knows she is jeopardising her future earnings potential and some companies do not have particularly progressive views on the matter.

According to Citrix Online new rules introduced in April in the UK, mean that there is an increased reluctance at small to medium sized businesses to employ women. 200 employers were interviewed and over half believed managers would think twice before employing a woman and a quarter of firms believed they would have a commercially negative impact.

In a recent radio debate, employers discussed the concerns of smaller companies. Many described having a baby as a lifestyle choice which should be paid for by the parents or the state, rather than the employer. Others said mothers were providing and bringing up the next generation of workers and it was in business’ best interests to allow them the freedom and flexibility to do so.

Contributors to the debate were split 50/50; unsurprisingly between men and women. It is probably when men become more involved in the process, that equality for mothers in the workplace will be achieved. Some countries (Scandinavian), rather than separating maternal and paternal leave, have parental leave, some of which is shared and leads to less victimisation of female job applicants

Governments are always aware of the ratio between the working-age and retired population and the equation combines immigration controls, women in the workplace and pensions. Demographics is a controversial area and, with life spans increasing, some difficult and ethically troubling questions will have to be asked.

On a company level, there is increased concern over the work-life balance and a firm must provide good benefits in order to retain staff with the right skills and cannot afford to alienate half of its potential workforce or customers.

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