Article 8 July 2014

Employers must pay salary for consecutive maternity leaves, says EU’s top court

The Court of Justice of the European Union (CJEU) has recently given a preliminary ruling in a case concerning two Finnish employees who did not receive salary for consecutive maternity leaves because the second pregnancy occurred during unpaid family leaves following their maternity leaves.

Under Finnish law, maternity leaves are unpaid, but many Finnish collective bargaining agreements provide for salary during a part of the maternity leave on the condition that the employee returns to work between two maternity leaves in order to received salary during the second maternity leave.

The CJEU ruled that such conditions are in breach of European Union law. This preliminary ruling significantly alters the right to salary during consecutive maternal leaves in Finnish collective bargaining agreements.

Right to salary for consecutive maternity leaves

The preliminary ruling in the joined cases C-512/11 and C-513/11 concerned two requests for a preliminary ruling by the Labour Court of Finland in two essentially similar matters concerning two women and their right to salary during their second consecutive maternity leaves.

Following initial periods of maternity leaves, the two women took unpaid parental leaves. They then got pregnant for the second time during their unpaid childcare leaves and notified their employers of their pregnancies and asked to interrupt their unpaid family leaves and consequently take a new period of maternity leave.

The employers accepted the notifications concerning the interruptions of the unpaid family leaves, but refused to pay the employees salary for the second maternity leave.

The reason for this was that the applicable collective agreements stipulated a requirement for a certain period of work in between paid maternity leaves, and the employees did not return to work between the first maternity, parental and childcare leaves and the second maternity leave.

In both cases, the employees were entitled to maternity allowance provided for by law, while the employers should normally pay the difference between that allowance and their normal salary if the employees are based on collective bargaining agreements, company policy or individual agreements entitled to salary during a certain part of their maternity leave.

Collective bargaining agreements and second maternity leave

The request for a preliminary ruling essentially concerned whether a provision in a collective bargaining agreement stipulating that salary during maternity leave is not paid to an employee if the employee does not return to work between two maternity leaves.

In its ruling, the CJEU considered Directive 96/34 on parental leave and two objectives of that directive.

Firstly, the framework agreement constitutes an undertaking by management and labour to introduce, through minimum requirements, measures to promote equal opportunities and treatment between men and women, by offering them an opportunity to reconcile their work responsibilities with family obligations.

Secondly, the framework agreement enables new parents to interrupt their professional activities to devote themselves to their family responsibilities, whilst giving them the assurance that they will be entitled to return to the same job, or, if that is not possible, an equivalent or similar post consistent with that employee’s employment contract or relationship at the end of the leave.

The CJEU found that the choice of an employee to exercise her right to unpaid parental leave should not affect the conditions on which she may exercise the right to take a different leave, in this case maternity leave. The CJEU emphasised that taking unpaid parental leave in this case inevitably means that an employee who needs to take maternity leave immediately after that parental leave loses part of her salary. The CJEU further emphasised that a pregnancy is not always foreseeable.

The CJEU concluded that provisions in collective agreements, pursuant to which a pregnant employee who interrupts a period of unpaid parental leave to take a maternity leave does not benefit from the salary to which she would be entitled had that period of maternity leave been preceded by a minimum period of resumption of work is in breach of European Union Law.

What are the consequences of the preliminary ruling?

It is to be noted that the CJEU referred to the directive concerning parental leaves although the employees were on childcare leaves, which is not a right guaranteed by the directive referred to by the CJEU.

The employees were still entitled to an income, at least equivalent to the sickness allowance provided for by national social security legislation, as required by the Pregnant Workers Directive (92/85), but not the additional salary provided for in the collective bargaining agreement.

The Finnish Labour Court will still have to make its own decisions in the cases at hand, but the preliminary ruling will certainly affect their outcome.

In a broader sense, many of the Finnish collective agreements include corresponding stipulations about a requirement on a minimal period of time before the employee is entitled to salary for a second maternity leave.

The most important consequences for the future concerning the preliminary ruling are that the abovementioned stipulations in the collective agreements are, in the view of the CJEU, in breach of European Union law.

This means that the provisions on a minimal period of time before an employee is entitled to salary for a second maternity leave should not be applied. Consequently, salary is required for consecutive maternal leaves without there being a requirement for a minimal period of work in between the maternity leaves.

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