The European Parliament on Wednesday voted, by a significant majority, in favour of the introduction of a number of different measures to amend maternity leave regulations in Member State countries. Controversially, the most significant measure voted on was the proposal to extend maternity leave to 20 weeks with full pay. Under the proposal, designed in part to boost Europe’s flagging birth rates, employees on maternity leave would have to be paid their full salary, equal to average monthly pay, for 20 weeks. An entitlement to paid paternity leave for fathers of at least two weeks was also approved by the MEPs on Wednesday.
Ireland is something of an exception in terms of flagging birth rates in that we are currently experiencing a baby boom. New figures show there were over 19,000 births registered in the third quarter of 2009, which is the highest quarterly number of births for 30 years. Against that backdrop, the proposed changes could lead to significant burdens being placed on employers at a time they can least afford it. Business groups across Europe say the introduction of the proposed changes would be a huge burden on companies already struggling in the economic downturn, while also weakening the chances of employment for women of childbearing age.
Currently, Irish women are entitled to 26 weeks’ ordinary maternity leave and, depending on their PRSI (national insurance) contributions, they receive a weekly payment of between €225 and €270 from the State by way of Maternity Benefit. There is no paternity leave and parental leave, which can be taken by the father or mother, is unpaid.
Employers are not obliged to ‘top-up’ employees while they are absent from work on maternity leave - a situation which the European Parliament wants changed. However, in practice, some employers in Ireland do pay the difference during the period of ordinary maternity leave between the amount of money which the employee receives from social welfare and her standard net take-home pay. According to a survey carried out in 2008, about half of women on maternity leave in Ireland have the balance paid by their employers, a further 30% receive some additional money while 19% receive nothing at all. Having said that, a number of employers have reduced or even eliminated any period of paid maternity leave given the economic situation. Indeed, the Chief Executive of the Irish Small and Medium Enterprises Association recently confirmed that most of its members do not pay maternity leave.
Compared to Ireland, which is a mid-ranking European country in terms of maternity benefit, Sweden, Norway and Denmark all offer a year’s paid leave. Women in Germany get 14 weeks' paid maternity leave, paid at 100% of salary. While 2% of this is funded by health insurance, the rest is paid for by the employer, which clearly places a heavy burden on businesses. Women in the U.K. get 52 weeks' maternity leave. Six weeks is paid at 90% of average salary, the next 33 paid at a flat rate of almost £125. Over the total period, women in the U.K. end up with average compensation of around 40% of salary.
So what happens now? The draft proposals passed by the European Parliament will go to the Council of Ministers, where each of the 27 Member States will have to agree on the text. Undoubtedly some of the Member States, in particular Germany and the U.K., will seek to water down the proposals before they are voted on, which is likely to take place next year.