Plans for flexible parental leave unveiled
01/06/2011 in Employment
The Government has published plans to introduce a new system of flexible, shared parental leave from 2015.
The proposals are set out in a paper called Consultation on Modern Workplaces (click here to open the PDF). They would entail further changes to the previous Labour administration’s legislation on additional paternity leave, which was implemented in April.
Three further major in initiatives are included in the consultation document:
- extending the right to request flexible working to all employees.
- amendments to the Working Time Regulations 1998 (WTR) regarding annual leave and its interplay with sickness absence.
- mandatory equal pay audits for employers who are found by an Employment Tribunal to have discriminated on grounds of sex in relation to pay.
Flexible parental leave
In outline, the main elements of the proposed flexible parental leave regime are:
- Prospective fathers would be entitled to unpaid leave to attend ante-natal care appointments. (Pregnant employees are currently entitled to paid time off to attend such appointments.)
- The father would remain entitled to two weeks’ paid paternity leave following the birth of the child.
- The mother would be entitled to 18 weeks’ maternity leave to be taken in a block at or around the time of the birth of the child.
- The remaining 34 weeks of the current 52-week maternity leave period would be reclassified as “parental leave” and may be taken by the mother or the father.
- The first 21 weeks of the new parental leave period would be paid and the remaining 13 weeks unpaid.
- Within the new parental leave period, the mother and father would each have four weeks of “reserved paid parental leave” for the exclusive use of each parent.
- The consultation document raises the possibility of taking leave in blocks followed by taking it in short periods (e.g. a mother taking maternity leave and then using short periods of parental leave to work only two days a week in the first year following the birth of her child).
- The current unpaid parental leave regime, extending beyond the first year following the birth of the child, would be maintained.
If parents wish, the scheme would allow a similar arrangement as under the current law, with the mother taking 52 weeks’ statutory leave and 39 weeks’ statutory maternity/parental pay. However, because the four-week protected period of paid parental leave could be taken concurrently by both mother and father, they would have an additional four weeks’ aggregate leave (i.e. 56 weeks rather than 52 weeks). Accordingly, this could represent an additional cost to employers.
Right to request flexible working
The Government is proposing to extend the right to request flexible working to all employees. It is currently available only to parents of children under 17 (and disabled children under 18) and certain carers. The 26-week qualifying period for the right will remain, but employers will be encouraged to consider flexibility before recruitment and to discuss it at interview with candidates.
Requests would be considered by using the current statutory process, but there would be a new duty to consider requests “reasonably” alongside a Code of Practice providing guidance for employers. Employers may be allowed to prioritise competing requests according to the personal circumstances of the employees making them. The consultation document also mentions the possibility of an employee making a second request for flexible working in a 12-month period if the original request states that the change is expected to last for less than a year.
Whilst many employers already have policies allowing any employee to request flexible working, those that do not are likely to see this as a burdensome reform. In particular, the possibility of making a second request within 12 months and the management time required to respond will be unpopular with many employers. Similarly, encouraging flexible working to be considered at recruitment may be received less than enthusiastically by employers with a culture of predominantly full-time working.
Working Time Regulations
The Government’s proposals to amend the WTR aim to resolve uncertainty following a series of problematic European and UK judgements on the rights of workers who are unable to take holiday due to sickness.
In 2009, in the cases of Stringer v HMRC and Schultz-Hoff v Deutsche Rentenversicherung Bund, the European Court of Justice (ECJ) confirmed that under the EU Working Time Directive (WTD), workers on sick leave must continue to accrue statutory holiday even though they are not at work. In a subsequent case, Pereda v Madrid Movilidad, the ECJ held that a worker who is unable, or does not wish, to take holiday during sick leave must be allowed to take the holiday on return to work - even if that means carrying over the holiday entitlement into the following leave year.
These cases have proved problematic for UK tribunals. The WTR currently allow statutory holiday to be taken during sick leave and do not expressly prevent an employer from requesting an employee to do so. They also provide that statutory holiday must be taken in the leave year in which it accrues (i.e. cannot be carried over). The resulting uncertainty has led to some dubious and conflicting Employment Tribunal decisions, providing little help to employers trying to work out the correct course of action.
The essence of the Government’s proposals is that annual leave can be carried over to the next leave year in certain circumstances where leave cannot be taken at the scheduled time due to sickness or where the employee is sick during scheduled annual leave. In addition, it is proposed:
- An employer can insist rescheduled leave is taken in the leave year to which it relates, if there is sufficient time remaining in that year.
- The employer may require the employee to take rescheduled leave in the following leave year for a justifiable business reason (e.g. the need for increased staff numbers to cover peak Christmas trading in retail environments).
- Where leave is carried over due to sickness, the maximum that can be carried over is four weeks (in line with the WTD). However, where leave is carried over on account of absence due to family-related leave, the full 5.6 weeks under the WTR can be carried over.
- Views are sought on making it possible for employers to “buy out” the additional 1.6 weeks’ leave under the WTR.
The Government’s proposals relating to the WTR should provide some welcome certainty and flexibility for employers in this difficult and confusing area. However, a key danger for employers is that disability-related issues may arise when managers are making decisions about staff based on sickness absence without first investigating the cause of the absence.
The Government’s proposal to impose mandatory equal pay audits on employers who lose an Employment Tribunal claim for sex discrimination in pay is highly controversial and will be met with unease by many employers. Tribunals would be obliged to order such an audit unless the employer could at least one of the following:
- it had been audited in the past three years
- it had other appropriate means of ensuring non-discriminatory pay
- it would not be productive to order an audit in the circumstances.
If implemented, this may have a knock-on effect on settlement of equal pay claims. The fear of an audit being ordered is likely to be a compelling reason for many employers to compromise such cases.
The consultation closes on 8 August 2011 and the Government intends to legislate on flexible parental leave, flexible working and equal pay as soon as possible in this Parliament (with introduction of the new system of flexible parental leave targeted for April 2015). The amendments to the WTR are likely to be implemented in 2012.
For more information on these issues please contact the Employment team.