Comment: Parental leave changes may be expensive

New rules could prove expensive to implement, writes John Lee

Working mothers will soon have the right to transfer part of their right to maternity leave (up to a maximum of 50 weeks) to their eligible partners. Picture: TSPL

YESTERDAY saw our annual raft of changes to employment laws coming into effect. Perhaps most controversially, was the introduction of “shared parental leave” which applies to births or adoptions either due or taking place on or after 5 April.

In basic terms, this affords working mothers the right to transfer part of their right to maternity leave (up to a maximum of 50 weeks) to their eligible partners. Minimum eligibility requirements have to be met in order to qualify for the new rights, including in relation to continuity of employment in accordance with maternity rights, having responsibility for the care of the child, meeting specific earnings levels and providing specific written declarations.

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The new system has been criticised for the complexity of its procedures. Many employers have had to review maternity procedures and adapt internal technologies to cope with the new requirements.

Internal processes and managerial awareness are required to deal with eligibility and entitlement issues, the management and refusal of requests and appropriate record-keeping. All of this must be done in a manner which avoids discrimination or allegations of “unfairness”. Employers have protested at their potential inability to effectively police the new system, their attendant cost and other perceived disadvantages.

Yesterday also saw the extensions of entitlements to adoption leave to all employees regardless of their length of service, and the right to unpaid parental leave to all parents of children up to the age of 18. Previously this right had been available only to parents of children up to the age of 5, or 18 in the case of disabled children.

Further changes included the annual review of tribunal awards limits. Maximum unfair dismissal awards were increased to £78,335 (or 52 weeks gross pay, whichever is lower). Statutory redundancy pay entitlements were increased to £14,250 (as were basic awards); rights to payment in respect of family leave were generally increased to a maximum of £139.58 per week and statutory sick pay was increased marginally to £88.45 per week.

The changes follow a judgment in the last of the recent decisions relating to holiday pay rights. This clarified that the UK’s current Working Time Regulations could be amended to provide for the inclusion of commission payments in the calculation of holiday pay in respect of statutory minimum periods of leave. This followed complaints by British Airways pilots who successfully claimed that certain flight supplements considered to be “inextricably linked to the performance of their duties” should be included in their holiday pay calculations. That led to successful arguments in further cases that regular, non-contractual overtime should be included in an employer’s calculation of holiday pay in connection with minimum holiday entitlement enshrined in the Working Time Directive.

Looking forward, the government’s new “Fit for Work” occupational health scheme – designed to minimise costs in the economy arising from ill health – kicks off in May. The service will include an occupational health assessment for employees absent from work for four weeks or more and is aimed at employers without such services.

The service proposes to include a “return to work plan”, helping employees overcome barriers preventing them from working. Although employers are currently not obliged to implement any recommendations arising from assessments under the new service, they would need to consider these carefully.

Looking to the post-general election employment landscape, all the main parties intend to target zero hours contracts. At the very least, significant restrictions are anticipated. Likewise, a common theme in current proposals include proposed wage increases and the targeting of inconsistency in pay across genders.

The Conservatives have made it clear they will focus on the introduction of a raft of restrictions in relation to industrial action. Labour has declared its intention to abolish the system of employment tribunal fees introduced under the coalition and which many have criticised as a barrier to justice, and to explore equal rights for the self-employed.

• John Lee is an associate in the employment team at DWF