BABY TAX

Wade v North Yorkshire Police Authority & HMRC

Under the rules governing statutory maternity pay (SMP), women have to give notice of when they want it to start, but to be “in conformity with that notice”, they must have stopped work for a pregnancy-related reason. In Wade v North Yorkshire Police Authority & HMRC, the Upper Tribunal of the Tax and Chancery Chamber said that women could still be in compliance even though they had stopped work for some other reason.

Basic facts

Mrs Wade, a police officer, went on maternity leave in 2005 and again in 2007.  As a police officer she was not entitled to statutory maternity leave, but on both occasions she was entitled to SMP as well as paid leave under the Police Occupational Maternity Scheme.

Both times, Mrs Wade started her police maternity leave earlier than the 11th week before the expected week of confinement (EWC), the earliest date that women can start their leave under the SMP rules, but gave notice that she wanted her SMP to start later. 

Mrs Wade and the authority disagreed on when the SMP should start and sought a decision from the HMRC, who decided that it should start from the 4^th week before the EWC.

The police authority argued that SMP had to start at the 11th week before her due date if none of the other rules applied, as a default rule. It therefore became obliged to start SMP on that date. For her part, Mrs Wade argued that SMP only became payable in the 4^th week before the EWC. 

Relevant law

Regulation 2(1) of the Statutory Maternity Pay (General) Regulations 1986 states that when the woman has told her employer the date from which she expects SMP to start and, “in conformity with that notice leaves work for [her employer] in a week which is later than the 12th week before the EWC”, the SMP should start on the date notified to the employer. 

Regulation 2(4) states that SMP will start in the 4^th week before the EWC if there is any pregnancy-related absence after the 11^th week before the EWC.

First tier tax tribunal

The tribunal interpreted the phrase “in conformity with that notice” to mean that Mrs Wade’s SMP should have started from the 11th week before the EWC because she had already started her occupational maternity leave.

Upper tax tribunal

The upper tribunal disagreed, however. It said that that a woman who has gone on leave before the date given in the notice might have ceased to work before the relevant date, but could start her leave and still be in conformity with the rule to give notice.

It said that otherwise women who took outstanding holiday, TOIL, or time off sick (unrelated to the pregnancy) before their maternity leave would also not be able to comply with the rule to give notice, and that cannot have been Parliament’s intention. 

It concluded that a woman can have stopped work and still comply with regulation 2(1), even if she had stopped work for some other reason. This was consistent with the terms of regulation 2(1) and with the scheme of the legislation set out in the Employment Rights Act 1996 and the Maternity and Parental Leave Regulations 1999.

It therefore concluded that despite starting her occupational maternity leave, Mrs Wade should receive her SMP starting from the 4^th week before her EWC for both periods of maternity leave.