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Radical reforms for parental leave and flexible working proposed

News Release issued by the COI News Distribution Service on 16 May 2011

The Government today launched a consultation on plans to introduce a new system of flexible parental leave from 2015 as part of its plans to create a modern workplace for the modern economy.

Current regulations are too rigid, reflect outdated notions of parenting and family responsibilities and restrict employers. Ministers want to help parents and business by giving them much greater choice and flexibility.

Under the proposals, once the early weeks of maternity and paternity leave have ended, parents will be able to share the overall leave allowance between them. Unlike the current system this leave could be taken in a number of different blocks and both parents could take leave at the same time. Crucially employers would have the ability to ensure that the leave must be taken in one continuous period if agreement can not be reached. They will be able to ask staff to return for short periods to meet peaks in demand or to require that leave is taken in one continuous block, depending on business needs.

The `Modern Workplaces’ consultation seeks to build a new consensus around greater flexibility, which also includes plans to extend the right to request flexible working to all employees.

Business Secretary Vince Cable said:

“Our proposals will encourage greater choice by giving employees and their employers the flexibility to find arrangements to suit them both. New parents should be able to choose their childcare arrangements for themselves, rather than being dictated to by rigid Government regulation as is currently the case. And employers should be encouraged to come to agreement with employees on how work and family responsibilities can be met simultaneously.

“These measures are fairer for fathers and maintain the existing entitlements for mothers – but crucially give parents much greater choice over how to balance their work and family commitments.

“Of course I’m mindful of the need to minimise the costs, bureaucracy and complexities on businesses. This has been at the forefront of my mind throughout the development of our proposals. So we will ensure that businesses will still be able to take into account their needs when agreeing how leave can be taken. But I’m also confident that we have a good case to make on the wider benefits to business - not least from a motivated and flexible workforce and we will be making this case to employers over the next few years before these changes are introduced.”

Home Secretary and Minister for Women and Equalities Theresa May said:

“Britain’s workplace laws are in need of modernisation. We have made great strides in addressing explicit discrimination in the workplace, but disadvantage persists. The solution to these challenges, though, is not more bureaucracy, top-down intervention and politically correct quotas, but policies that go with the grain of human nature and maximise flexibility and choice. That is why we will extend the right to request flexible working to all and introduce a new system of flexible parental leave both of which will contribute to our commitment to closing down the gender pay gap. But where there is evidence of discrimination we will punish it, so we will introduce mandatory pay audits for companies that are found guilty of pay discrimination.”

Work and Pensions Minister, Maria Miller said:

“For far too long flexible working has been dismissed as a burden on business, when in fact the most successful businesses understand the important role it can play in recruiting and retaining the right staff. We need to move flexible working away from being the exception, to being considered a normal way to work.

“With more people working past retirement and more disabled people wanting to get into work, flexible working is something most people will want to consider at some point in their working life.”

The landmark consultation is the latest step in the Government’s comprehensive review of employment law. It has already removed the Default Retirement Age and published plans to reform the way in which workplace disputes are resolved. Ministers want to make it easier for businesses to employ people, grow and boost opportunities but also for people to balance work and family commitments.

Today’s consultation includes the following proposals:

Flexible Parental Leave

18 weeks maternity leave and pay – in one continuous block around birth.Four weeks of parental leave and pay exclusive to each parent to be taken in the first year.30 weeks of additional parental leave available to either parent - of which 17 weeks would be paid and can be broken in blocks between parents.

Flexible Working

Extending the right to request for all workers who have been with their employer for 26 weeks. The Government will consider publishing a statutory Code of Practice for businesses and will propose that employers should be allowed to take into account employees individual circumstances when considering conflicting requests. There are no plans to alter the current 8 business reasons for a business to turn down a request. The Government recognises that legislation is not the only answer to promoting flexible working practices. Non-legislative measures are being developed to promote flexible working opportunities both for those with a job and for those looking for one.

Equal Pay

Employment Tribunals that have found an employer to have discriminated on gender in relation to pay, will order the employer to conduct a pay audit and publish their results. Except in some circumstances, such as where an audit has already been conducted.

Notes to editors:

1. Further information, including the consultation document, can be found here http://www.bis.gov.uk/modernworkplaces . The consultation runs from 16 May to 8 August 2011.

2. Under the new proposals fathers would continue to receive two weeks paternity leave and pay in one continuous block around birth.

3. Paid leave would be at the standard rate (currently £128.73) with the exception of the first six weeks of maternity leave which would be at 90% of the employee’s salary. The new system would see total leave in year one between parents increased from 54 to 58 weeks. These proposals are subject to affordability.

4. Currently employed mothers receive a long period of maternity leave and pay (52 weeks leave of which 39 weeks are paid). Employed fathers receive much less (two paid weeks). This system is inflexible and does not support shared parenting. Today’s proposals would supersede Additional Paternity Leave measures introduced on the 3 April 2011. Additional Paternity leave gives employed fathers a right to up to six months extra leave which can be taken once the mother has returned to work after 20 weeks. Some of the leave may be paid if taken during the mother’s maternity pay period. This is paid at 90% of earnings up to the same standard rate as Statutory Maternity Pay (SMP) which is currently £128.73. Further information can be found here - http://www.direct.gov.uk/en/Parents/Moneyandworkentitlements/WorkAndFamilies/Paternityrightsintheworkplace/DG_190788

5. Employed parents currently have a right to 13 weeks unpaid leave per parent per child, which can be taken before the child’s 5 th birthday. In line with the revised Parental Leave Directive 2010, this would be extended to 18 weeks unpaid parental leave. This entitlement is in addition to the flexible parental leave described above.

6. Currently 50% of fathers take two weeks of formal leave during paternity leave. Over 90% of fathers take time off around the time of their child birth. Over 80% use some statutory paternity leave; of these half use paternity leave exclusively - and a further 30% combine it with other types of leave.

7. Additional measures in the consultation include changes to:

Working Time Regulations (WTR) – proposals to amend the WTR so that annual leave entitlements can be rescheduled, and carried over to the next leave year, when a worker falls ill during planned annual leave. We are proposing to limit this to the four weeks of Working Time Directive leave. We also intend to amend the WTR to allow the carry over of annual leave due to maternity, paternity, parental or adoption leave – this will include the full 5.6 weeks of leave entitlement per year. The consultation also seeks views on giving businesses greater flexibility around annual leave, by allowing them to buy out untaken leave and also allowing carry over of leave on justifiable business grounds (this would only apply to the 1.6 weeks of domestic statutory leave). Full guidance will be produced prior to the WTR changes coming into force.

8. Direct Gov has a comprehensive explanation of parents rights in the workplace - http://www.direct.gov.uk/en/Parents/Moneyandworkentitlements/WorkAndFamilies/index.htm

9. BIS's online newsroom contains the latest press notices, speeches, as well as video and images for download. It also features an up to date list of BIS press office contacts. See http://www.bis.gov.uk/newsroom for more information.

Contacts:

BIS Press Office
NDS.BIS@coi.gsi.gov.uk

Henry Tanner
Phone: 020 7215 5947
henry.tanner@bis.gsi.gov.uk