Employers should consider setting minimum standards despite differences in national laws
The Maersk Group recently introduced a global standard of maternity benefits guaranteeing a minimum of 18 weeks’ leave on full pay across all its onshore workforces. The group’s initiative followed last year’s announcement by multinational employer Vodafone of a new global maternity policy setting a minimum standard of benefit across its companies in Africa, the Middle East, Asia Pacific, Australia, Europe and the US. Under this policy, mothers receive a minimum of 16 weeks' fully paid maternity leave.
For both companies’ employees these global policies will result in a significant increase in benefits compared to their statutory entitlements in many countries.
While only a small number of multinational private sector employers have embraced the concept of a global maternity policy, international law has set minimum requirements for maternity leave for almost a century. The ILO's Maternity Protection Convention of 1919 set an international standard of six weeks' maternity leave, during which the worker was entitled to be paid ‘benefits sufficient for the full and healthy maintenance of herself and her child, provided either out of public funds or by means of a system of insurance’. The most up-to-date ILO convention is the Maternity Protection Convention of 2000, which provides for 14 weeks of maternity benefit, paid at no less than two-thirds of the worker's previous earnings.
At EU level, the Pregnant Workers Directive (Directive 92/85/EEC) requires states to guarantee the same minimum right to 14 weeks' leave, during which the worker is entitled to receive payment or an allowance at a rate at least equivalent to national sick pay.
Of course, not all countries have adopted the ILO standard. The USA is most commonly cited as the country where workers have no right to paid maternity leave. Even within Europe, there are widely differing national laws on maternity leave and maternity benefits at work. This may go some way in explaining why global maternity policies are not the norm among multinational employers. The sheer complexity of the different local statutory regimes and their interplay with state benefits and insurance systems may make a global policy seem out of reach. The mechanics for reimbursement by the state in respect of maternity leave payments can also be extremely complicated and are potentially affected by any contractual policy.
However, despite all this complexity, there are compelling reasons for companies to consider this type of policy initiative.
Companies may decide that continuing to adhere to local statutory regimes that offer little or no maternity entitlements would be incompatible with their equality strategies. This is particularly likely given the recognition by international law of a standard of paid maternity leave.
Similarly, companies with a global equality strategy may be attracted to the idea of setting a global benchmark for paid maternity leave, as this would result in a levelling up for employees in countries where domestic legislation does not give them the benefits enjoyed by co-workers in other countries.
In addition, initiating this type of policy may result in higher rates of retention of women in the workforce. When Vodafone implemented its global maternity policy, it cited research commissioned from KPMG linking better maternity benefits to improved retention of women after they have a baby. Put simply, employees who feel supported by their employer during maternity leave are more likely to want to return to that employer. KPMG's research into maternity retention also underpins another key element of Vodafone's maternity policy, which is to offer women full pay for a 30-hour week (equivalent to working four days per week) for the first six months after their return to work. For the employees, this alleviates the financial burden of paying for childcare, while also enabling the company to continue to support them in the workplace.
Given the potential of policies such as Vodafone’s to align with gender diversity strategies, we may start to see an increasing number of businesses adopt global standards for workforce maternity benefits. Of course, employers will always need to keep a handle on the detail and mechanics of each local regulatory regime. But that should not make a global maternity policy unattainable. And setting a global benchmark can send a simple yet powerful message to the workers in that business, as well as to the markets in which the business operates.
Katie Williams is a partner at Pinsent Masons LLP
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