Q: Do I have to pay Statutory Maternity Pay (SMP) to an employee I have dismissed?

I run a small business and have a pregnant employee who is due to go on Maternity leave but her performance is unsatisfactory and I might have to terminate her employment. If she is dismissed will I need to pay her Statutory Maternity Pay?

A: If an employee is made redundant, dismissed or she leaves your employment she is entitled to SMP if she leaves your employment after the start of the 15th week before the week her baby is due but before the start of the 11th week, SMP will start from the beginning of the 11th week before the week her baby is due.

If her employments ends at any time after the start of the 11th week before the week her baby is due and before the start of her Maternity Pay Period (MPP), her SMP will start from the day after she left your employment.

Her SMP must end when you have paid her SMP for 39 weeks. But it can end earlier than this if, after the baby is born, but before the end of the maternity pay period, she works for another employer. You will not pay her any more SMP and must stop paying SMP her from the week she started work. It is her responsibility to tell  you about her new job. She must do this as soon as possible, and make sure she returns any SMP payment she received that covers the week she started work and any part of the period after she resumed work.

 How much SMP you can recover depends on the total amount of employer’s and employees’ Class 1 NICs you pay in the ‘relevant tax year’.

The ‘relevant tax year is the tax year immediately before the tax year in which the qualifying week falls – this being the 15th week before the baby is due.

If your Class 1 NICs are no more than £45,000 in the relevant tax year, you can recover 103 per cent of your SMP payments. For 2011-12 this is made up of:

• 100 per cent of the SMP
• 3 per cent of the SMP – this is an additional amount as compensation for the employer’s Class 1 NICs you’ll have paid on the SMP

You can recover 103 per cent of the total of all payments of SMP made in the same tax month.

For answers to questions like this or any other employee related issues why not contact HR Management Support Ltd. for guidance and advice.

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