SPBP: Special Circumstances and Business Changes

Introduction

Statutory Parental Bereavement Pay (SPBP) entitlements can be affected by various employment arrangements and business changes. Whether you're taking over a business, employing agency workers, or dealing with redundancies, understanding how these circumstances affect SPBP is essential for compliance and supporting bereaved employees.

Business Takeovers and Transfers

When TUPE regulations apply

If the Transfer of Undertakings (Protection of Employment) Regulations (TUPE) 2006 apply to your business acquisition, continuity of employment is not broken. TUPE applies when you take over a business, part of a business, or a service provision and simultaneously take on the employment contracts of the transferred employees.

The previous employer must provide 'employee liability information' identifying which employees are transferring with the business. If you're unsure whether TUPE applies, contact the Advisory, Conciliation and Arbitration Service (Acas), or in Northern Ireland, the Labour Relations Agency.

When TUPE doesn't apply

Continuity of employment may still be preserved in specific situations, even without TUPE:

• Teachers moving between schools maintained by the same local education authority
• Corporate body changes under an Act of Parliament
• The employer dies and their personal representative or trustees retain the employee
• Changes in partners, personal representatives or trustees
• Employees moving between associated employers

When continuity is not broken, employees can receive SPBP if they worked for both you and the previous employer during the 26 weeks ending with the relevant week.

When continuity is broken

If you take on a business after the child's death or stillbirth, the previous employer must pay SPBP. If you take over before the death or stillbirth, the employee cannot receive SPBP.

When Your Business Ceases Trading or Becomes Insolvent

Ceasing to trade

If you stop trading, you remain liable to pay any outstanding SPBP until either the employee has received their full entitlement or their entitlement ends for another reason.

Insolvency

If you become insolvent during the SPBP period, HMRC will pay your employee's SPBP from the date of insolvency. You (or the administrator, liquidator, or similar) must inform HMRC. Employees should contact HMRC's Statutory Payment Dispute Team directly.

Redundancy

If you make an employee redundant, you remain liable to continue paying SPBP provided all qualifying conditions have been met.

Different Employment Types

Agency workers

You must pay SPBP to agency workers if you treat them as employees for PAYE tax and Class 1 National Insurance contributions, and they meet the qualifying conditions. This applies when you deduct (or would deduct if earnings were high enough) PAYE tax and Class 1 NICs from their earnings.

Agency workers can still receive SPBP if you had no work to offer them or they were unavailable due to sickness, injury, maternity leave, paternity leave, adoption leave, parental leave, or paid holiday.

Casual and short contract employees

Casual employees typically work as and when required, or on a series of short contracts. If you deduct PAYE tax and Class 1 NICs from their earnings, you must pay SPBP if they satisfy all qualifying conditions.

Directors

The rules for directors vary depending on when your company was incorporated and how directors are paid.

Companies incorporated after 1 October 2009: Directors can determine their own remuneration without shareholder approval. Director's fees count as earnings for SPBP purposes on the date payment was made.

Companies incorporated before 1 October 2009: An ordinary resolution is required to determine director's remuneration. Payments made in anticipation of the annual vote cannot be included when calculating average weekly earnings.

For directors paid a regular contractual salary, calculate average weekly earnings like any other employee. For those paid only by formal vote, use the dates of formal votes instead of normal paydays. Do not include money drawn in anticipation of a formal vote, even if NICs were deducted.

Employees with multiple jobs

Multiple employers: Employees can receive SPBP from each employer if they satisfy qualifying conditions with each one. They can choose different time off from each employer.

Multiple jobs with you: If you add all earnings together for Class 1 NICs, the employee receives only one lot of SPBP (two weeks' pay, taken together or separately). If you calculate NICs separately, they can receive separate SPBP for each set of earnings and take different time off for each job.

Employees working abroad

Employees working outside the UK can receive SPBP if they continue working for you until the death or stillbirth date and you're liable (or would have been liable if earnings were high enough) to pay Class 1 NICs throughout the period.

If you're not liable for Class 1 NICs, employees may still qualify if they work within the European Economic Area (EEA) and you were liable for Class 1 NICs in the relevant week (the week ending with a Saturday immediately before the child died or was stillborn).

Supply teachers and seasonal workers

The same rules generally apply as for agency workers. However, supply teachers, seasonal workers, and other irregular employees are treated as having worked in the relevant week if they were sick throughout that week or were not required to work.

Mariners

Mariners can receive SPBP if you have a place of business in the UK and they work on a home-trade ship.

NHS employees

Some NHS employees have split contracts between strategic health authorities and NHS Trusts due to reorganisation. These employees can choose to have all their earnings added together when calculating average weekly earnings for SPBP.

Special Employee Circumstances

Employees who left their job

If an employee left before the child's death or stillbirth, they're not entitled to SPBP. If they left after the death or stillbirth, they may be entitled regardless of why they left or that they're not returning.

Employees must not work for a new employer during the week in which SPBP is being claimed. They can choose when to begin their SPBP period on or after the death date, but it must end within 56 weeks of the death. They should give you notice and evidence within 28 days from the first day of the week for which SPBP is being claimed.

Backdated pay rises

If an employee receives a backdated pay rise that increases earnings already paid in the relevant period, you must recalculate their average weekly earnings and pay any extra SPBP due. If they weren't previously entitled, check whether they now qualify.

Salary sacrifice arrangements

Calculate average weekly earnings using the amount actually paid during the relevant period. SPBP cannot be sacrificed and must be paid in full.

Furloughed employees

For employees furloughed under the Coronavirus Job Retention Scheme (CJRS) during any part of the relevant eight-week period (where SPBP begins on or after 25 April 2020), use the higher of what they actually received or would have received if not furloughed. Consider any bonus or commission payments due in the relevant period.

No adjustment is needed if you topped up wages to full pay at your own cost, or if you agreed a pay reduction outside of CJRS.

Foster carers and stillbirth

Foster carers (including those who go on to adopt) may be entitled to SPBP if they satisfy qualifying conditions. Employees are entitled to SPBP if a baby is stillborn after the 24th week of pregnancy—the same rules apply as for a live birth.

Multiple child deaths

Employees are entitled to two weeks' parental bereavement leave for each child that dies. If children die on different dates, the 56-week qualifying period applies individually to each child.

Employee death

If an employee dies during the SPBP period, pay SPBP for the week in which they die, but not for any week after.

Reinstatement situations

Employees are entitled to SPBP (as if not dismissed) if they didn't work during the 26-week period ending with the week before the child died or was stillborn because you dismissed them, and they're subsequently reinstated following an employment tribunal decision or statutory grievance procedure.

Employees returning from armed forces service under the Reserve Forces (Safeguard of Employment) Regulations may also qualify. They must return to work within six months of ending their service and have been continuously employed for 26 weeks up to the week before the child died or was stillborn (not counting the period of armed forces service).

Sources

• Business changes that affect payment of Statutory Parental Bereavement Pay
• Employee circumstances that affect payment of Statutory Parental Bereavement Pay
• How different employment types affect what you pay in Statutory Parental Bereavement Pay

This article provides general guidance based on current HMRC rules. For advice specific to your situation, speak to your accountant.