New costs are 'a killer'

15th January 2010 at 00:00
Ruling allows teachers who have been off sick or on maternity leave to claim holiday compensation

Cash-strapped councils are set to be hit with a multi-million pound bill, thanks to new regulations giving employees the right to accrue holidays while on maternity leave or off sick.

Teachers will be responsible for a significant chunk of the unforeseen cost, estimated at pound;20-30 million, due to their long holidays and the need to provide expensive cover for their classes.

Until recently, if a teacher was on maternity leave or off sick long-term, he or she was entitled, on return to work, to claim a maximum of 10 days' compen-satory leave.

Now, however, following recent European Court of Justice rulings, all UK workers who have been on maternity leave are entitled to claim back the leave they missed out on. In the case of a teacher on maternity leave for a year, this could amount to 66 days.

In the worst-case scenario, the cost of supply cover alone could be pound;28m. However, councils would also have to finance teachers' additional holiday pay.

Quality improvement officers or educational psychologists, for instance, who have been on maternity for a year, will also be entitled to claim 40 days' leave when they return.

And all employees on sick leave for a year will be eligible for 28 days' holiday, the statutory minimum.

A letter from the Convention of Scottish Local Authorities to directors of finance warns councils about the changes: "While it is clear that there are major financial implications associated with the new maternity regulations, these are most significant for teachers. Teachers' annual leave entitlement is the balance of days beyond the working year and amounts to 66. Teachers who have been on maternity leave for an entire year will therefore be entitled to 66 days' paid leave on their return." This is an extra 56 days.

The changes in holiday entitlement for women on maternity leave will apply to employees whose children are born on or after October 5, 2008.

Directors of education have expressed deep concern, with one describing the new costs as "a killer".

To soften the blow, teacher unions say they are considering allowing councils to increase the length of time a teacher has to work before being able to claim maternity pay. Currently teachers can make the claim after 11 weeks; the statutory level is 15 weeks.

"They have asked us before to keep the qualifying period in line with statutory provision," said Drew Morrice, assistant secretary of the Educational Institute of Scotland. "We have always said we would only contemplate it if there were significant areas of improvement in provision. This is a significant area of improvement, albeit one that councils have little control over."

East Ayrshire Council estimated the changes would cost it pound;250,000 per year, based on supply cover costing pound;205 per day and 35 women taking maternity leave each year. It has also budgeted for an additional pound;40,000 to cover the cost of holidays accrued by those on sick leave.

"Those costs are for teachers alone," said Andrew Sutherland, head of schools. "This is a heavy, heavy burden for us and another quarter of a million pounds we have to find."

Glasgow, meanwhile, was looking at a bill worth millions, said Maureen McKenna, head of education services.

"This is a stress on our finances and an additional burden that we will have to bear at a time of financial constraint," she said.

It was also a burden likely to grow over the coming years, continued Mr Sutherland. With many teachers set to retire, the age-profile of the profession would become younger, and the majority of teachers are likely to be female.

The changes to holiday entitlement come as councils face the toughest financial climate in decades, with local authorities bracing themselves for a funding cut of 12 per cent over the next three years.

The new rules have been introduced as a result of recent rulings from the European Court of Justice and the House of Lords.

In one case, a Spanish woman, Merino Gomez, took her employer, Continental Industrias, to court after it refused to grant her leave following her return to work after maternity leave.

In another, HMRC v Stringer, former employees of Her Majesty's Revenue and Customs brought claims against the department after requests for holiday and holiday pay were rejected, due to long-term sick leave.

One employee had requested annual leave during a period of sickness absence, which HMRC refused. The others were dismissed following long-term sickness absence, and they claimed payment in lieu for outstanding holiday.

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