SME Chamber

Maternity Leave GRTU: Positive proposal amidst concerns

GRTU believes that this proposal is positive in principle since it will address issues related to the negative preconceptions on women’s employment and career prospects. The fact must be highlighted that as a by-product of this fund, employers in female-dominated sectors shall benefit at the expense of employers in male-dominated sectors.

Whilst GRTU widely recognises the importance of supporting working women in their lifestyle requirements, most importantly their role as mothers, it is 

also important to acknowledge that maternity leave has a big impact on small businesses. Maternity leave leads many small businesses to go through increased pressure having to make up for less human resources while still carrying the same wage cost. Some businesses go through more hardship because they need to find a replacement with the right skills and spend even more on wage costs to fill in this gap.

Still however the process is embedded in businesses` working practices and it is believed that gender does not have a significant impact on hiring decisions. However this proposal may likely result in only a marginal increase in the employment level of women. At the same time GRTU is concerned with a number of elements found in this proposal that could potentially make the measure disproportionately burdensome and harmful to business.

GRTU emphasizes that the reimbursement system will create unnecessary cash flow concerns and administrative burdens on employers which can easily be avoided if the full scope of this system is to be reaped – otherwise employers are more likely to see a financial and administrative burden of having women out on maternity leave, until the reimbursement is paid. This would also result in employers having to go through additional procedures and administrative processes to reclaim funds.

The two-fold implementation of the measure is also a concern when an employers must pay for maternity leave through increased contributions and still paying the employee during maternity leave directly. The measure will make employers pay the benefit twice until they go through the administrative procedure and get reimbursed. In addition reimbursements by Government are always a concern because of the usual lengthy timeframes. GRTU therefore is in favour of a proposal that would pay employees directly and is taken from the employer only once, without any reimbursement or administrative burden on the employer.

GRTU also outlines that since the collection of the fund is envisaged to be linked (even if indirectly) to the collection of employers’ National Insurance Contributions, this should not develop into a precursor for future increases of imbalance on NI contributions against the employer. It should also be assured that the system does not incur additional unnecessary burdens on employers to implement this, such as expenses for payroll software. It would already be deemed a burden on employers and therefore all necessary measures have to be taken to ensure that no additional expenses are put on the employer.

Whilst analyzing maternity provisions and the participation of women in employment GRTU believes that Government should also seriously consider easing the financial strain on small businesses complying with maternity provisions. The support can be in the form of tax breaks or subsidies. The challenges small businesses faces to implement maternity measures are significant and they should be supported while they in turn are supporting their employees and trying to safeguard the sustainability of their business.

Last but not least, GRTU requests that the workings that led to the 0.3% rate increase would be made public. Moreover, in case of future revisions of the rate this has to take place in consultation with social partners concerned, within a stipulated framework and timeframe, to avoid unexpected instability on business’ budgets.


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