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In this edition of our Employment Newsletter we look at the Children and Families Act 2014 and the changes which are being introduced by the Act.
The key change relates to shared parental leave and pay for babies due to be born or children placed for adoption on or after 5 April 2015. We consider the implications of this change for employers.
In this issue:
Shared Parental Leave and Pay
The Children and Families Act 2014 received royal assent on 13 March 2014. The Act introduces a number of key changes to family-friendly rights. One of the key changes is in relation to shared parental leave in respect of babies due to be born or children placed for adoption on or after 5 April 2015.
In this edition of our Employment Newsletter we set out the proposed new parental leave and pay regime.
At this stage only draft Regulations have been published regarding shared parental leave and pay and, therefore, the regime may be subject to change. However, this is likely to be limited and therefore it is useful for employers to start planning for the impact of the Regulations.
The current position
Currently, eligible mothers can take up to 52 weeks’ statutory maternity leave in total and they receive 39 weeks’ statutory maternity pay. Fathers are permitted two weeks’ paid ordinary paternity leave.
Eligible fathers, however, can also take an additional single period of paternity leave of between two and 26 weeks provided: (a) the mother has returned to work and brought her maternity leave to an end; and (b) paternity leave begins no earlier than 20 weeks after the child’s birth. Such additional paternity leave is paid at the statutory rate.
The New Regime
Under the new proposals, the current additional paternity leave regime will be abolished. Instead, the mother can decide to effectively share with her partner up to 50 weeks of her maternity or adoption leave and her statutory maternity pay. The first two weeks of leave after the birth or adoption of the child MUST be taken by the mother but the remainder of the leave can be shared immediately following that.
Any shared parental leave must be taken within the 52 weeks after the birth or adoption placement of the child.
The Government’s aim is to create a framework that better supports modern working families. The new regime is designed to create more flexibility and remove the stereotypical view that the mother is always the primary carer for the child.
The Deputy Prime Minister, Nick Clegg, stated that “women deserve the right to pursue their goals and not feel they have to choose between having a successful career or having a baby. They should be supported by their employers, rather than being made to feel less employable or under pressure to take unchallenging jobs”.
The New Regime in practice
The current entitlement to 52 weeks’ maternity or adoption leave (39 weeks’ paid) will remain the default position for all eligible women. If parents wish to move on to the shared regime, the key features of the new system of shared parental leave and pay will be as follows:
- If a couple opt for shared parental leave, they will need to give their respective employers at least eight weeks’ notice of their intention to take shared parental leave.
- The mother can change her mind about sharing her maternity leave up to six weeks after the child’s birth. This is to make sure that every mother is able to remain on maternity leave, if she chooses to, once she has given birth.
- Employees will be required to provide an indication of their expected pattern of leave when they notify their employer of intention to take shared parental leave, but this will not be binding.
- A couple may take shared parental leave and pay concurrently or consecutively.
- Employees can request that shared parental leave is taken in several blocks within the 50 week protected period rather than as one continuous period of leave.
- If employees wish to take several blocks of leave, they must give their employer at least eight weeks’ notice in respect of each period of leave. In such cases, the employer can agree to the request, propose alternative dates or refuse the request altogether (in which case the employee will be entitled to one continuous period of leave). Therefore, there is no obligation on an employer to agree several blocks of leave.
- Each employee can make up to three notifications to their employer for leave or to make changes to the periods of leave. This is inclusive of the original request to take shared parental leave. Changes that are mutually agreed between the employer and employee will not count towards this cap.
- Each parent taking shared parental leave will have the right to 20 keeping in touch days. This is in addition to the mother’s 10 keeping in touch days that she is entitled to during maternity leave.
- An employee returning to work from shared parental leave will have the right to return to the same job no matter how many periods of shared parental leave they have taken, as long as they have taken 26 or fewer weeks’ leave in total. This 26-week total will include periods of maternity, adoption, paternity and shared parental leave. Once they have exceeded 26 weeks’ leave, they would only have the right to return to the same or a similar job.
In relation to the draft Regulations, Nick Clegg also stated that “there should not be a one size fits all approach – that is not how families are set up. Many businesses already recognise how productive and motivated employees are when they’re given the opportunity to work flexibly, helping them retain talent and boost their competitive edge. This is good for families, good for business and good for our economy”.
The new regime applies to the mother of the relevant child and the father of the relevant child or the person who is married to the mother of the relevant child, her civil partner or partner.
1. In order for shared parental leave to be taken, the mother must be entitled to statutory maternity leave and must have served the appropriate notice regarding her maternity leave.
2. To be eligible for the new regime, both parents must satisfy:
- the “duration of employment” test – this is satisfied if the parent has been continuously employed for a period of not less than 26 weeks’ ending with the week immediately preceding the 14th week before the expected week of childbirth (EWC) and remains in continuous employment with that employer until the week before any period of shared parental leave is taken; and
- the “employment and earnings” test – this is satisfied if the parent has been employed for certain minimum periods immediately preceding the EWC and has average weekly earnings of (currently) at least £30 in the tax year before the tax year containing the EWC.
3. In addition both parents must:
- have main responsibility for the care of the child (apart from any responsibility of the other parent); and
- have complied with the notice requirements.
The draft Regulations are intended to be ‘light touch’ from an administration perspective but they provide for complex and detailed notice requirements.
The mother must give her employer notice that she is going to take maternity leave. If the mother decides to share her maternity leave both parents must provide to their respective employers notice of their entitlement and intention to take shared parental leave. This must be provided eight weeks’ prior to the leave and must contain specific information.
Within 14 days after receiving the notice of entitlement from an employee, an employer can request that the employee provides a copy of the child’s birth certificate (or, in the case of adoption, evidence of placement) and contact details of the other parent’s employer. This will enable the employer to confirm with the other parent’s employer the details of the shared parental leave. This will be particularly useful to employers if they are concerned that an employee has not disclosed accurate details regarding shared parental leave.
Potential issues for employers
1. If an employer offers women enhanced maternity pay but does not offer the same enhanced pay to men who take shared parental leave, arguably, this could lead to a claim of sex discrimination. A man could argue that he has been subjected to less favourable treatment because of his sex when he compares himself to a woman on maternity leave. The point has not been considered by the UK Courts but there is a potential risk of claims in addition to employee relations issues.
2. Employers will also be exposed to potential discrimination issues if requests for shared parental leave from men and women are not dealt with in a consistent and fair manner.
3. There is no prescribed procedure for how employers should consider shared parental leave requests and variations to those requests. Employers may find themselves in a situation where an employee is not satisfied with how their request has been handled and may: (a) try to argue that there has been a breach of the implied term of trust and confidence; and/or (b) raise a formal grievance.
4. Careful planning will be vital for employers when an employee has made a request for shared parental leave. This could be particularly problematic for an employer if an employee requests to vary leave (which the employee can on at least three occasions). The employee must give at least eight weeks’ notice of any request or variation to their leave which provides employers with only limited assistance in trying to minimise disruption to the workforce and customers.
Ultimately, employers can reject an employee’s request to take the leave in separate blocks and force the employee to take all of the leave as one continuous period but, again, ensuring that requests are dealt with consistently will be important.
Practical steps for employers
It is important that employers review their existing family-friendly policies to ensure that there is a proper system or procedure for accepting and considering requests for shared parental leave.
It will be helpful for employers to have a written policy on their approach to requests for shared parental leave and the criteria which will apply when considering such requests.
Employers should consider now whether enhanced pay will be offered to employees taking shared parental leave and, if so, how this will be aligned with existing maternity policies.
The Shared Parental Leave and Shared Parental Pay Regulations remain in draft. It is possible that there will be changes to the provisions we have discussed.
That said, it is envisaged that the Regulations will take effect in relation to babies due or children placed for adoption on or after 5 April 2015.
Accordingly, the Regulations will be applicable to women who become pregnant (and their partners) from around August 2014 onwards. With this in mind, it is important that employers start to review their policies and procedures as soon as possible.
Other Changes Under the Children and Families Act
30 June 2014 – Flexible Working.
From 30 June 2014 an employee who has 26 weeks’ continuous employment will be eligible to request flexible working.
Prior to 30 June 2014, the Flexible Working Regulations stated that the right to request flexible working was available only to parents of children under 17 (18 if the child is disabled) or to carers of adults.
The change will enable more employees to request flexible working. If an employer fails to properly respond to a request for flexible working the maximum amount of compensation available is eight weeks’ pay.
Whilst the remedy available to employees remains modest, it is advisable that any request for flexible working is considered carefully as, in addition to employee relations and reputational considerations, there are potential risks in relation to discrimination claims.
The new Flexible Working Regulations apply to a flexible working request made on or after 30 June 2014.
1 October 2014 – New antenatal rights
The Act provides that an employee who has a qualifying relationship with a pregnant women or her expected child is entitled to take unpaid time off during working hours to attend antenatal appointments.
This right is limited to attending two appointments with each appointment lasting no more than 6.5 hours.
A qualifying relationship means the husband or civil partner of a pregnant woman, a person living with a pregnant women (but not a relative), the father of the expected child and the parent of an expected child in a surrogacy arrangement.
Adoptive parents may also take time off to attend appointments arranged by an adoption agency before the placement of a child.
The remedy for an employer’s unreasonable refusal of time off is compensation two times the hourly salary for each hour which the employee would have been absent.
Whilst the remedy is nominal, an employer should be mindful of employee relations and reputational consequences if it unreasonably refuses an employee’s request to time off to attend antenatal appointments.
Fostering to adopt (for children placed for adoption on or after 5 April 2015)
Adoption leave and pay will be extended to prospective parents in the ‘fostering-to-adopt’ scheme.
Statutory adoption pay (for children placed for adoption on or after 5 April 2015)
Statutory adoption pay for adopters will increase to 90% of normal earnings for the first six weeks bringing it in line with statutory maternity pay.