Can an employer require employees to repay contractual maternity pay if they do not return to work for a minimum period?
Yes, an employer can require an employee to repay the whole or part of their contractual maternity pay if they do not return to work for a minimum period after their maternity leave has ended. However, the employer cannot require them to repay the part of their pay that relates to statutory maternity pay or pension contributions.
The requirement to repay must have been either agreed in writing in advance or included as a clawback clause in the employee’s contract of employment. It is good practice for the employer to draw the employee’s attention to this clawback condition in writing, prior to the commencement of maternity leave.
The employer should consider allowing the employee to repay the contractual maternity pay in a series of agreed instalments if repayment of one lump sum would cause them financial difficulty.
A clawback agreement should include the following contents;
As the employer is under no obligation to pay any remuneration to the employee during the maternity period, these monies are deemed as an acknowledgement of debt. Said monies are to be repaid by the employee (reducing on a pro-rata basis), in the event that the employee terminates the contract of employment voluntarily, or is dismissed, for a period of 12 months after returning to work.
Arrangements may be made to pay this amount off in instalments. Failure to honour these arrangements, however, may result in a civil claim being instituted against the employee. This clause will be waived in the event of termination of employment due to involuntary retrenchment.