Maternity leave: a big nightmare for small businesses

Almost four months after starting at Velocity, our receptionist, Laura, left the business. We’d just paid a recruitment fee to find her but weren’t entitled to any reduction or rebate. As a result, we felt pretty hard done by… until we found out she was pregnant.

The groans changed to cheers and we all breathed a massive sigh of relief. We had come out on the better end of the deal after all. Why” Because the maternity laws in Britain just do not work. We were relieved to have wasted money recruiting someone who left, just because we had avoided the dreaded maternity leave scenario. That’s how onerous the legislation is.

Had Laura stayed, we would have had a fixed cost for someone who evidently did not want to be there and would have had to keep her job open, prohibiting our ability to find a suitable long-term replacement. The replacement would then have also cost us during the time she (or he, in these PC times) was required to fill in for Laura.

Most small businesses simply cannot afford these costs. If you have only two or three employees and one needs maternity leave, then for many businesses this means big heartache and a lot of problems to solve, not only to manage people but to stay within the law whilst staying within your budget.

We all know more or less what the obligations of an employer are in this situation, so I won’t waste any time going over them. What I will say is that they need to be reviewed and since I always like a complaint to be accompanied by a suggestion for improvement, here are some possibilities:

(1) Could a form of insurance be offered to help cover the costs associated with complying with maternity legislation” This could be private or it could even be state run although in the UK ‘state run” is usually a euphemism for disastrously mismanaged and riddled with delays and incompetence.

(2) Maybe the government could deregulate maternity slightly so that it becomes a point of negotiation between businesses and prospective employees. This allows a market economy to function naturally and without undue state intervention. The employees could negotiate this into their package depending upon their intentions and lifestyle choices. Meanwhile, the employer could use it as an incentive to attract staff from other companies, thus encouraging competition.

(3) The government could slacken legislation to differentiate between SMEs and large corporations. Larger companies with thousands of staff can better afford to support their employees through maternity leave and, in many cases, can arrange cover from within the company. In contrast, a small business does not have the luxury of this scale nor the staff size to soften the blow of losing people under the current maternity laws. Is this fair” It depends on your views. Smaller companies could still offer the same packages as those under the legislation if they wanted to or had to in order to recruit certain staff.

SMEs are the lifeblood of an economy like ours and this is especially true in an economic climate such as the one we are in today. This needs to be reflected in legislation. There is nothing wrong with offering some basic protection to the employee but let’s not handicap the employer at the same time.

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