The Employment Act 2002 (1)

The first of a two-part, detailed examination of the new Act which provides: new rights to paid paternity and paid adoption leave; changes to existing maternity leave and pay provision; a new right to request flexible working; changes to employment tribunal procedure; a new statutory dispute resolution procedure; and protection for employees in fixed-term work.

Click here to view part 2 of our two-part series on the Employment Act 2002. 

"The [Act] is an important one, touching on many aspects of people's work and family lives. It represents a balanced package, providing new rights and responsibilities for employers and employees alike. The [Act] introduces new rights that will ensure that parents are able to spend time with their children when it is most valuable, while they are young. We are for the first time introducing statutory paternity and adoption leave, and a requirement that businesses seriously consider requests for flexible working."¹ (Minister of State for Employment Relations and the Regions, Alan Johnson).

The "work and family" provisions contained in the Employment Act 2002 ("the EA 2002") are the result of one of the most extensive public consultations to ever precede new legislation. It commenced in June 2000 with a review which led to the publication, that December, of the government Green Paper Work and parents: competitiveness and choice². This put forward a range of options to balance improving choice for parents and competitiveness for business. In his March 2001 budget, the Chancellor announced proposals to extend and increase maternity leave and pay, and introduce new rights to paternity and adoption leave and pay. That May, a further four consultation documents were published³, containing detailed proposals on these areas, as well as on parental leave. The government's responses⁴ to this second stage of consultation were published in October 2001 and given legislative form in what is now Part 1 of the EA 2002.

The new rights to statutory leave and pay will be fully implemented through regulations. The EA 2002 itself contains very little detail. On 23 May 2002, the government published five draft regulations on paternity leave and pay, adoption leave and pay, and maternity and parental leave⁵, together with five model documents⁶. The consultation period on these documents and a number of marginal outstanding policy issues closed on 19 July, and the government response is awaited. Where appropriate, the detail of these draft regulations will be discussed within the relevant section.

PATERNITY LEAVE

Section 1 of the EA 2002 inserts a new chapter 3 (ss.80A-80E) into Part 8 of the Employment Rights Act 1996 ("the ERA") entitled "Paternity Leave". This provides, for the first time, a statutory right for employees to take paternity leave on the birth of a child, or placement of a child for adoption. The relevant draft regulations, which give the provisional details of this new right, are the Paternity and Adoption Leave Regulations ("the draft regulations" within this section. Any outstanding uncertainty as to a provision will be indicated).

Entitlement to leave

From April 2003, an employee, male or female, who satisfies conditions to be specified in regulations as to (i) duration of employment; (ii) relationship with a newborn, or expected, child; and (iii) relationship with the child's mother, will be entitled to be absent from work on leave for the purpose of caring for the child or supporting the mother (s.80A(1) of the ERA). What constitutes such caring or support may be specified in regulations (s.80A(5)(a)). However, the government stated⁷ during parliamentary debate that it anticipated that such regulations would not prove necessary, hoping to take a "light-touch approach" to the circumstances in which leave can be taken. The draft regulations do not deal with this issue.

The qualifying period of employment will be 26 weeks of continuous service with the same employer by the end of the 15th week before the expected week of childbirth ("the EWC") (draft reg. 4(2)(a)). An employee who would have satisfied this condition, but for the child being born before the 14th week before its EWC - that is, prematurely - is to be treated as having the necessary qualifying period (draft reg. 4(3)). The EWC is defined as the week beginning midnight between Saturday and Sunday in which it is expected that the child will be born (draft reg. 2). This is the same as that contained in The Maternity and Parental Leave etc Regulations 1999 ("the 1999 Regulations").

The right to paternity leave will be available to employees other than the biological father of the child. Entitlement is to be decided on the basis of the employee's relationship with the child and its mother, to ensure that paternity leave is available to those who will be parenting the child (ss.80A(1)(b) and (c) of the ERA). The employee must have, or expect to have, responsibility for the upbringing of the child, and must be either the biological father of the child, or be married to, or the partner of, the child's mother (draft regs. 4(2)(b) and (c)). "Partner" is defined as a person, whether of a different sex or the same sex, who lives with the mother (or adopter) in an enduring family relationship but is not a blood relative (draft reg. 2). It should be noted, however, that the relationship requirements may be subject to amendment⁸.

Extent of leave entitlement

The extent of an employee's entitlement to leave and when it may be taken is also to be determined by regulations (s.80A(2) of the ERA). Section 80A(3) provides for a minimum entitlement to at least two weeks' leave. However, the government has made clear⁹ that the entitlement will be to two weeks' leave and no more. This leave entitlement will not be affected by the birth of more than one child from the same pregnancy (draft reg. 4(9), under 80A(5)(b)). The draft regulations provide for the leave to be taken as one single week or one block of two consecutive weeks (draft reg. 5(1)). However, the government has invited views on whether two separate blocks of one week each¹⁰ would be more convenient for both parties¹¹.

The leave of either one week or two weeks must be taken within a period of 56 days, beginning with either the child's birth date, or the first day of the EWC (draft reg. 5(1), under s.80A(2)(b)). This second alternative, from which the 56-day period may run, was introduced to alleviate concerns¹² regarding children born very prematurely and who remain in hospital throughout the first 56 days or longer. Paternity leave will still be available should a child be stillborn after 24 weeks of pregnancy, or die during the possible paternity leave period (draft reg. 4(4)). Thus the term "newborn child" includes a child stillborn after 24 weeks of pregnancy (s.80A(7) of the ERA). Where more than one child is born as a result of the same pregnancy, the child's birth date is to be read as the date of birth of the first child (s.80A(6)).

Paternity leave will not cover absence to allow an employee to be with the mother during labour, as this is already catered for by the provisions of s.57A of the ERA.

Notice and evidence requirements

The EA 2002 provides that regulations may specify the notice and evidence of entitlement the employee needs to produce, and the procedures to be followed by employees and employers (s.80E(a) of the ERA). A qualifying employee must give notice of his or her intention to take paternity leave in or before the 15th week before the EWC (or, in cases where this is not reasonably practicable, as soon as is reasonably practicable) (draft reg. 6(2)). There is no requirement that the employee consult with the employer about the most convenient time for taking the leave, nor can an employer insist on the employee deferring the leave. "When we consulted employers, their major point was that they wanted plenty of notice and certitude. I must make it clear that we are introducing an inalienable right to take a limited time off around the birth of a child."¹³ The notice must specify the EWC, the period of leave to be taken, and the date on which that leave is to commence (draft reg. 6).

If, after providing this notice, the employee then changes his or her mind as to the commencement date or the amount of leave, he or she must provide at least 28 days' notice of this change (or, if that is not reasonably practicable, as soon as is reasonably practicable) (draft reg. 6(3)). The EA 2002 provides a power to specify, by regulation, the consequences of a failure to give the required notice (s.80E(c) of the ERA). However, the draft regulations do not cover this issue.

The intention regarding evidence of entitlement to take paternity leave is simply one of self-certification. This is to relieve employers of the burden of investigating and policing the private lives of their employees in order to assess whether there is genuine entitlement to paternity leave. The draft self-certificate for paternity leave and pay, published with the draft regulations, requires an employee to state the EWC, the date on which he or she anticipates that paternity leave will begin, and whether he or she is taking one or two weeks' leave. The employee then has to sign a declaration that he or she fulfils the conditions of entitlement to paternity leave and pay (draft regs. 4(6) and (7)).

To prevent abuse of the right, the EA 2002 provides a power for the government to regulate to require the employer to keep records regarding paternity leave (s.80E(b) of the ERA), but the government has stated¹⁴ that it does not envisage regulating to require record-keeping.

Rights during paternity leave

"As paternity leave is for a maximum of two weeks, we intend that an employee will be entitled to all contractual benefits except wages or salary . . . [and] will have the right to return to the same job . . ."¹⁵

The EA 2002 provides that regulations under s.80A of the ERA shall specify the extent to which an employee who is absent on paternity leave is entitled "to the benefit of the terms and conditions of employment which would have applied had he or she not been absent" (s.80C(1)(a)), and the extent to which such an employee is bound by obligations arising under those terms and conditions (s.80C(1)(b)). Regulations shall also specify the kind of job to which such an employee is entitled to return (s.80C(1)(c)). This right to return may include a reference to a continuous period of absence attributable partly to paternity leave and partly to one or more of maternity leave, adoption leave and parental leave (s.80C(2)).

The draft regulations provide that an employee who takes paternity leave:

is entitled, during the leave period, to the benefit of the terms and conditions of employment, excluding those about "remuneration", which would have applied if he or she had not been absent (draft regs. 10(1)(a) and 10(2)(b)); and

is bound by any obligations arising under those terms and conditions which are not inconsistent with the right to be absent from work on paternity leave (draft reg. 10(1)(b)).

Regulations may specify matters which are, or are not, to be treated as remuneration (s.80C(6) of the ERA). The draft regulations provide that only sums payable to an employee by way of wages or salary are to be treated as remuneration (draft reg. 10(3)), meaning that an employee will remain entitled to benefits in kind. These provisions are identical to those concerning ordinary maternity leave under s.71(4) of the ERA.

Following paternity leave, the employee has:

the right to return to the job in which he or she was employed before taking paternity leave (draft reg. 11(1)), and to conditions which would have applied had he or she not been absent on paternity leave (draft reg. 11(2), under s.80C(7) of the ERA); and

the right not to be subjected to any detriment or dismissal because he or she took, or sought to take, paternity leave (draft reg. 24, under s.80D of the ERA).

As with maternity and parental leave, and emergency time off to care for dependents, it will also be automatically unfair if an employee is dismissed and the reason, or principal reason, for the dismissal is that the employee took, or sought to take, paternity leave (draft reg. 25(1), under s.80D(2)(b) of the ERA).

Contractual rights to paternity leave

As with maternity leave, where an employee's contract of employment makes its own provision for paternity leave, an employee may not benefit from both the contractual and statutory provisions, but may take advantage of whichever right is, in any particular respect, more favourable (draft reg. 26(2)(a), under s.80E(e) of the ERA).

Paternity leave and adoption

The provisions in respect of paternity leave and adoption leave are contained in s.80B of the ERA. They are similar to s.80A, but ss.80B(1)(b) and 80B(4) make provision for the specifics of adoption as opposed to childbirth.

In the case of adoption, paternity leave may be taken by the parent, whether man or woman, who will not be the primary carer (and, therefore, does not elect to take adoption leave). That parent must:

have, or expect to have, responsibility for the upbringing of the child;

be either married to, or the partner of, the child's adopter;

have continuous employment of at least 26 weeks ending with the week in which the adopter is notified of having been matched with the child for the purposes of adoption ("the matching week"); and

must not be taking adoption leave in respect of the child (draft reg. 7(2), under s.80B(1) of the ERA).

A match occurs when an approved adoption agency, having found a child for the adopter, formally approves the suitability of that child, or children, with the particular adopter. The paternity leave period will be available from the date the child is placed with the couple for adoption - up until 56 days after that date (s.80B(4) of the ERA and draft reg. 8(1)). It will still be available should the placement of the child for adoption be terminated through the child's death or otherwise (draft reg. 7(4)).

As with paternity leave in respect of a birth child, the parent of the adopted child must also comply with any request by his or her employer to produce evidence of his or her entitlement to paternity leave (draft reg. 5, under s.80E(a) of the ERA). To this end, the government has published a separate model document for paternity leave and pay in respect of adoption which mirrors the one in respect of children by birth, but with the exceptions of requiring the dates of matching and of the child's expected placement (draft regs. 7(5) and (6)).

The employee must give notice of his or her intention to take paternity leave within seven days of being notified that he or she has been matched with the child for the purposes of adoption, (or, where that is not reasonably practicable, as soon as is reasonably practicable) (draft reg. 9(2), under s.80E(a)). If, after giving notification, the employee either wants to change the intended date for the leave to commence or the intended period of leave, he or she will have to notify the employer 28 days in advance (or if that is not reasonably practicable, as soon as is reasonably practicable) (draft reg. 9(3), under s.80E(a)).

Combining parental and paternity leave

Employees who satisfy the relevant qualifying conditions (the most important being one year's continuous service) will be able to take parental leave, which remains unpaid, in addition to paternity leave. The government anticipates that parental leave is likely to be taken immediately after paternity leave as part of one period of consecutive leave. It also acknowledged that the EA 2002 will make possible, for the first time, new combinations of leave which may mean that employees are absent from work for considerable periods of time. Regulations will specify the different types of, and possible combinations of, leave, and the kind of job to which the employee has the right of return following leave. The existing draft regulations do not cover this issue.

However, the government has, in the accompanying consultation document, highlighted this area as a complex one and invited views¹⁶. Its starting premise is that in cases of combined leave, it may well not be reasonable for an employee to retain the right to return to the same job, but to a suitable alternative.

STATUTORY PATERNITY PAY

Section 2 of the EA 2002, by insertions into the Social Security Contributions and Benefits Act 1992 ("the SSCBA"), makes provision for statutory paternity pay ("SPP") for the paternity leave period. The detail of these provisions are, in contrast to the leave provisions, largely contained in the EA 2002, although the government has also published three draft regulations specifying further detail and inviting comments. These are The Statutory Paternity Pay and Statutory Adoption Pay (General) Regulations; The Statutory Paternity Pay and Statutory Adoption Pay (Weekly Rates) Regulations; and The Statutory Paternity Pay and Statutory Adoption Pay (Administration) Regulations. In this section, reference will be made to the first and second of these draft regulations as the draft (general) regulations, and the draft (weekly rates) regulations, respectively.

The entitlement to SPP under s.2 generally mirrors the entitlement to paternity leave, and similar conditions must be satisfied. Crown employees are specifically included. As with statutory maternity pay ("SMP"), the employee's normal weekly earnings must be equal to, or above, the lower earnings limit applying to NI contributions. This is currently £75 per week. A person's normal weekly earnings shall "be taken to be the average weekly earnings which in the relevant period have been paid to him for his benefit under the contract of employment with the employer in question". The "relevant period" is the period between "(a) the last normal pay day to fall before the appropriate date; and (b) the last normal pay day to fall at least eight weeks earlier than the normal pay day mentioned in subparagraph (a)" (draft (general) reg. 39(3)). The "appropriate date" in relation to SPP (birth) is the "first day of the 14th week before the EWC or the first day in the week in which the child is born, whichever is the earlier (draft (general) reg. 39(2)(a)). For SPP (adoption), it is the first day of the matching week (draft (general) reg. 39(2)(b)).

"Employee" for the purposes of SPP, means "a person who is (a) gainfully employed in Great Britain either under a contract of service or in an office (including elective office) with emoluments chargeable to income tax under Schedule E; and (b) is over 16." Section 2 of the EA states that regulations may provide for persons outside of this definition to be treated as employees and for persons within the definition not to be treated as employees.

The lower earnings limit

Unlike under the tax system, earnings from more than one part-time job cannot be aggregated under the NI contributions system. This means that employees who earn less than the lower earnings limit in any one particular job will be excluded from the right to receive SPP. This caused considerable concern during parliamentary debate, but the government explained that it was to prevent disproportionate administrative burdens being placed on employers¹⁷.

The government also announced that, where there is entitlement to paternity leave, but no entitlement to SPP as a result of the lower earnings limit, employees will be able to claim income support for the one or two weeks' leave period. Additionally, employees who do qualify for SPP but who are normally low-paid will be able to top it up with income support. The income support regulations are to be amended accordingly¹⁸.

Notice and evidential requirements for SPP

Section 2 of the EA 2002 provides that, in order to receive SPP, an employee must give the employer at least 28 days' notice of the date from which he or she expects its liability to pay him or her SPP to begin (or, if that is not reasonably practicable, as soon as is reasonably practicable). This notice must be in writing if the employer requests it. This means that the employee wishing to take paternity leave will be obliged to give two notices at different times: the first for paternity leave, to be given 15 weeks before the EWC, or within seven days of being notified of having been matched with a child for the purposes of adoption; and the second, in relation to SPP, at least 28 days before the leave commences (or as soon as is reasonably practicable). This mirrors the intended amendments to maternity leave and pay (to be implemented by regulations), by which maternity leave also attracts a notification requirement of 15 weeks before the EWC, and a 28-day notification in relation to SMP (see below). The government's intention is thus to harmonise, as far as possible, the three schemes of maternity, adoption, and paternity leave and payments.

The evidence of entitlement that must be provided is the same as for statutory paternity leave - essentially, a self-declaration, as in the model documents published with the draft regulations. The only significant addition is in relation to SPP (adoption). Under s.2, a person with whom a child is placed for adoption can only receive SPP if he or she has so elected, and has not elected to receive statutory adoption pay ("SAP"). Therefore, if the employee taking paternity leave in respect of adoption is entitled to both SPP and SAP, he or she is required additionally to declare that he or she has elected to receive SPP rather than SAP (draft (general) reg. 15(1)(c)).

Working whilst in receipt of SPP

Section 2 of the EA 2002 provides that "except in such cases as may be prescribed, SPP shall not be payable to a person in respect of a statutory pay week during any part of which he works for an employer who is not liable to pay him SPP". The draft (general) regulations provide that an employer ("Employer A") shall pay SPP to an employee who works for another employer ("Employer B") during the paternity leave period only in the following circumstances: (i) Employer B is not also liable to pay the employee SPP (either because of insufficient qualifying service or because his or her earnings are too low); and (ii), the employee has worked for Employer B in the week immediately preceding either the 14th week before the EWC (SPP in respect of birth), or the matching week (SPP in respect of adoption) (draft regs. 10 and 16). This is in line with the SMP scheme, but the proposal is also one on which comments were sought in the recent consultation (which closed on 19 July 2002)¹⁹. Any other paid employment during the paternity leave period will terminate liability to pay the employee SPP in respect of any remaining SPP period (draft (general) reg. 17(1)).

Rate and period of payment

Section 2 of the EA 2002 provides for the rate of SPP to be set in regulations. The draft (weekly rates) regulations provide that where the SPP period begins on or after 6 April 2003, the weekly rate payable shall be the smaller of the following two amounts: (a) £100; (b) 90% of the employee's normal weekly earnings (reg. 2(2)). The employee's normal weekly earnings for this purpose will be determined by reference to the same relevant (eight-week) period as used in relation to the lower earnings limit.

Under s.2, SPP shall be payable in respect of a period of two consecutive weeks within the period of 56 days beginning with either the date of the child's birth (SPP in respect of birth), or the date of the child's placement for adoption (SPP in respect of adoption). The draft (general) regulations specify that this 56-day period may also begin with the first day of the EWC, to allow for paid paternity leave when the child is born prematurely (reg. 8). If regulations permit, the employee may choose to receive SPP in respect of a period of one week, or of two non-consecutive periods of a week each. The draft (general) regulations currently provide for the first of these choices (regs. 6(2) and 12(2)), but not the second. In its consultation document on the draft regulations, the government invited views²⁰ on providing for the second option, and particularly on whether it would be unduly burdensome on small businesses to have employees moving in and out of SPP.

Miscellaneous provisions

Section 2 of the EA 2002 provides that any agreement shall be void to the extent that it attempts to exclude, limit, or otherwise modify any of the SPP provisions, or to require an employee or former employee to contribute towards any costs incurred by the employer or former employer in making SPP payments.

Entitlement to SPP shall not affect an employee's right to receive contractual remuneration. Any contractual remuneration paid by an employer will go towards discharging any liability of that employer to pay SPP for that period. Likewise, any SPP paid by an employer to an employee will go towards discharging any liability it may have to pay contractual remuneration in respect of that provision.

ADOPTION LEAVE

"The introduction of adoption rights was the one area that was universally approved. There was not one dissenting voice against the argument that, in a society in which we need more people to adopt instead of children being in care, it is ludicrous to give absolutely no assistance to adopting parents."²¹

Section 3 of the EA 2002 inserts a new chapter 1A (ss.75A-75D) into Part 8 of the ERA, entitled "Adoption Leave". This provides, for the first time, a statutory right for employees to take adoption leave around the time of placement of a child for adoption.

The government's aim is to mirror, as closely as possible, the provisions for maternity leave. The EA 2002 itself provides very little detail of this new right, leaving it to be dealt with by regulations. However, the draft Paternity and Adoption Leave Regulations deal with the various aspects of adoption leave, and are referred to in this section as "the draft regulations". As with paternity leave, a small number of marginal policy issues were put out for consultation²². The overall scheme, however, is relatively settled and is well-documented in the government's responses to the consultations of 2001²³.

Entitlement to adoption leave

Male or female employees who satisfy prescribed conditions may be absent from work at any time during an ordinary adoption leave ("OAL") period and an additional adoption leave ("AAL") period (ss.75A(1) and 75B(1) of the ERA). An employee is entitled to OAL in respect of a child if he or she has been notified that he or she has been matched by an adoption agency with a child (or children) for the purposes of adoption, and if he or she has been employed for 26 continuous weeks ending with the matching week (draft reg. 12(2)). Adoption leave is not available where the child is already known to the adopters, as in step-family adoptions, or adoption by existing foster carers. A child is defined as a person under the age of 18 (draft reg. 2).

Within the context of joint adoptions, either partner will be able to choose to take adoption leave. Otherwise, it is only the partner who legally adopts the child who will be entitled to adoption leave (para. 2 of the draft regulations). The other partner will be entitled to statutory paternity leave ("SPL") and SPP, if he or she meets the qualifying criteria. Currently, only married couples are able to jointly adopt²⁴. In unmarried couples, only one partner can be the legal adopter. However, the Adoption and Children Bill is very likely to provide, when enacted, for unmarried couples, including same-sex couples, to jointly adopt.

The leave entitlement

The OAL period and AAL period are to be prescribed by regulations (ss.75A(2) and 75B(2) of the ERA). OAL will be for a period of up to 26 weeks commencing on either one of two dates: the date on which the child is placed with the adopter for the purposes of adoption, or a date which is no more than 14 days before the expected date of placement ("EDP") (draft reg. 13). Placement is when the child arrives to live permanently with the adopter. OAL will be paid.

AAL will be for a further period of up to 26 weeks beginning on the day after the last day of OAL (draft reg. 18(2)). This gives a total of up to one year's leave. There is no extra entitlement condition for AAL other than that the employee has taken OAL (draft reg. 18(1)). This mirrors the amended maternity leave provisions (see below). AAL will be unpaid.

The draft regulations provide that, should placement of the child be terminated for any reason, including by death of the child, the employee will be entitled to a further eight weeks of OAL or AAL if at least eight weeks of either type of leave would have remained had the placement not been terminated (draft regs. 16 and 20). Adoption provision will therefore differ from maternity provision in this regard, as women remain entitled to the full period of maternity leave and SMP should the child die during the maternity leave period, or be stillborn²⁵. However, this eight-week period in relation to placement being terminated has not yet been settled, and was one of the policy issues specifically put out for public consultation on the 23 May 2002²⁶. This provision may therefore be subject to amendment.

Notice and evidence requirements

The EA 2002 provides that regulations may make provision for such matters as notices to be given, evidence to be produced, procedures to be followed, records to be kept, the consequences of failing to give notices, evidence or to produce records, and for circumstances where an employee has contractual rights to adoption leave (s.75D(1) of the ERA).

The draft regulations specify that an employee will only be entitled to take adoption leave if he or she complies with the requirements regarding notice, and with any request from the employer to provide evidence of his or her entitlement to take adoption leave (draft regs. 12(1)(b) and (c)).

The evidence specified is a document to be issued by the adoption agency that matches the employee with the child, and which states the employee's details, the details of the adoption agency, the date the employee was notified of having been matched, and the EDP (draft reg. 3).

The government has published a model document for this purpose, called the "matching certificate", which contains a section to be completed by the adoption agency. If requested, the employee will have to submit the matching certificate to the employer (draft reg. 12(1)(b)). The matching certificate is designed to mirror, as far as possible, the form MATB1, which is the medical certificate of pregnancy that a woman can obtain either from her midwife or her doctor for the purposes of maternity leave and pay.

The employee must give notice of his or intention to take adoption leave within seven days of having been notified that he or she has been matched with a child for the purposes of adoption (draft reg. 14(2)(a)) (or, if that is not reasonably practicable, as soon as is reasonably practicable) (draft reg. 14(2)(b)). The draft regulations provide that the notice must specify the EDP and the date when the employee wants the leave to commence (reg. 14(1)). The employee will be required to give the employer 28 days' notice of when he or she wishes the adoption leave to start (which can be a date up to 14 days before the EDP), unless this is not reasonably practicable (draft reg. 14(3)(a)). In those circumstances, notice should be given as soon as is reasonably practicable, and leave will start on the date the child is placed for adoption (draft reg. 14(2)(b)).

If an employee, having given notice, then wants to vary the date on which the leave will commence, he or she will have to give notice of the variation 28 days before the new intended date, or, if that is not reasonably practicable, as soon as is reasonably practicable (para. 14(3)). The government acknowledges that, in cases of adoption, these notification requirements could mean that an employer receives relatively little notice of an employee's absence of up to one year. It therefore intends to provide guidance with the final regulations that will encourage employees to inform their employers of their intentions to adopt as early on in the process as possible²⁷.

The draft regulations provide that an employer who has been given notice by an employee about his or her intention to take adoption leave must respond to this notification within 28 days, setting out in writing the employee's expected date of return from adoption leave (draft reg. 14(5)).

Rights during adoption leave

The EA 2002 provides that regulations shall specify: (i) the extent to which an employee who is absent on OAL and AAL is entitled "to the benefit of the terms and conditions of employment which would have applied had he or she not been absent"; (ii) the extent to which an employee absent on OAL and AAL leave is bound by obligations arising under those terms and conditions; and (iii) the kind of job to which an employee on OAL and AAL is entitled to return (s.75A(3) and s.75B(4) of the ERA). This right to return may include a reference to a continuous period of absence attributable, in relation to OAL, partly to OAL and partly to maternity leave (s.75A(4)) or, in relation to AAL, partly to AAL, and partly to maternity leave or OAL (s.75B(6)).

The draft regulations provide that an employee who takes OAL:

is entitled, during the OAL period, to the benefit of the terms and conditions of employment, excluding those about "remuneration", which would have applied if he or she had not been absent (draft regs. 15(1)(a) and 15(2)(b)); and

is bound by any obligations arising under those terms and conditions which are not inconsistent with the right to be absent from work on paternity leave (draft reg. 15(1)(b)).

Regulations may specify matters which are, or are not, to be treated as remuneration (s.75A(6) and s.75B(7) of the ERA). By draft reg. 15(3), only sums payable to an employee by way of wages or salary are to be treated as remuneration. The employee therefore continues to be entitled to benefits in kind, such as private medical or permanent health insurance, whether or not these are contractual. The employee will also continue to accrue paid holiday entitlement, and other benefits that depend on length of service.

An employee who takes OAL is entitled to return from leave to the job in which he or she was employed before the absence, with his or her seniority, pension and similar rights intact.

The position with AAL is the same as for AML (reg. 17 of the 1999 Regulations). The employee remains entitled to the benefit of his or her employer's implied obligation of trust and confidence, and of any terms and conditions of employment relating to notice of dismissal, compensation on the event of redundancy, and disciplinary or grievance procedures (draft reg. 19(a)). He or she will also continue to be bound by the duty of good faith and of any terms relating to notice on resignation, disclosure of confidential information, the acceptance of gifts or other benefits, and participation in any other business (draft reg. 19(b)).

The right to return will be to the job in which he or she was employed before the absence or, if that is not reasonably practicable, to another job which is both suitable and appropriate in the circumstances (draft reg. 21(1)). This must be on terms and conditions as to remuneration not less favourable than those that would have applied had he or she not been absent on adoption leave; with his or her seniority, pension rights and similar rights as they would have been if the period of his or her employment prior to the AAL period was continuous with the employment following his or her return to work; and otherwise on terms and conditions not less favourable than those which would have applied had he or she not been absent from work after the end of the OAL period (draft reg. 21(2)). These provisions are identical to the right of return from AML under reg. 18 of the 1999 Regulations.

If an employee is entitled to AAL, it will be assumed that the AAL will be taken. If the employee wishes to return to work earlier than at the end of his or her OAL or AAL, he or she will be required to give the employer at least 28 days' notice (draft reg. 23(1)). If the employee does not do so, and attempts to return early, the employer may postpone his or her return so as to receive such notice, but not beyond the AAL period (draft regs. 23(2) and (3)). If the employer then notifies the employee that he or she is not to return before the date to which his or her return is postponed, it will be under no contractual obligation to pay him or her if he or she returns earlier than that date (draft reg. 23(4)).

Redundancy

The EA 2002 provides for regulations to make provision for redundancy or dismissal (other than by reason of redundancy) during an OAL or AAL (s.75C(1) of the ERA). Such regulations may include provisions requiring an employer to offer alternative employment and for the consequences of failing to comply with the regulations (s.75C(2)). The draft regulations envisage that, as with current maternity leave provisions, where an employee's position becomes redundant whilst he or she is on OAL or AAL, he or she will be entitled to be offered any suitable alternative vacancy (draft reg. 22).

Detriment and dismissal

It will be unlawful for an employer to subject an employee to any detriment because he or she took, or sought to take, adoption leave (draft reg. 24(1)). It will also be automatically unfair if an employee is dismissed and the reason, or principal reason, for the dismissal is that he or she took, or sought to take, adoption leave (draft reg. 25(1)). However, such dismissal will not be automatically unfair if: (i) the employer employs fewer than five employees, and it is not reasonably practicable to allow the employee on adoption leave to return to a job which is both suitable and appropriate; or (ii) it is not reasonably practicable to allow the employee to return to a job which is both suitable and appropriate, and an associated employer offers the employee a job of that kind, and the employee accepts or unreasonably refuses that offer (draft regs. 25(2) and (3)). These provisions will create a discrepancy between maternity leave and adoption leave provisions, in circumstances where the government has prioritised harmony between the schemes. Whether the government proceeds on this basis, following the public consultation which closed on 19 July, remains to be seen.

Contractual rights to adoption leave

As with maternity and paternity leave, where an employee's contract of employment makes its own provision for adoption leave, an employee may not benefit from both the contractual and statutory provisions, but may take advantage of whichever right is, in any particular respect, more favourable (draft reg. 26(2)).

STATUTORY ADOPTION PAY

Section 4 of the EA 2002, by insertions into the SSCBA, makes provision for statutory adoption pay ("SAP") for the OAL period. The details of these provisions are, in contrast to the leave provisions, largely contained in the EA 2002, although the government has also published three draft regulations specifying further detail and inviting comments. These are The Statutory Paternity Pay and Statutory Adoption Pay (General) Regulations; The Statutory Paternity Pay and Statutory Adoption Pay (Weekly Rates) Regulations; and The Statutory Paternity Pay and Statutory Adoption Pay (Administration) Regulations. In this section, reference will be made to the first and second of these draft regulations as the draft (general) regulations and the draft (weekly rates) regulations respectively.

Entitlement to SAP

The conditions of entitlement to SAP are that an employee must:

be a person with whom a child is, or is expected to be, placed for adoption under UK law;

have been continuously employed for at least 26 weeks ending with the matching week;

be absent from work due to adoption leave;

have normal weekly earnings equal to or above £75 (the current lower earnings limit), calculated over the eight weeks prior to the matching week, (as with SPP, employees whose earnings are under this limit will be able to claim income support); and

must have elected to receive SAP, (only possible if he or she has not elected to receive SPP).

"Employee" has the same meaning as for SPP. The SAP provisions also cover Crown employees.

Rate and period of payment

Under s.4 of the EA 2002, SAP shall be payable at such fixed or earnings-related rate as may be prescribed by regulations. It shall be payable in respect of each week during a prescribed period ("the adoption pay period") of a duration not exceeding 26 weeks.

The draft (weekly rates) regulations provide that the weekly rate of payment of SAP shall be the smaller of the following two amounts: (a) £100; or (b) 90% of the employee's normal weekly earnings (draft (weekly rates) reg. 3). This is the same rate as used for SPP and the lower rate of SMP. The employee's normal weekly earnings for this purpose will be determined by reference to the same relevant (eight-week) period as used in relation to the lower earnings limit.

SAP will be paid for 26 weeks (the OAL period) commencing with the date on which OAL starts (draft (general) reg. 23). This assumes that the required notice has been given. As with entitlement to adoption leave, the draft (general) regulations envisage that, should placement of the child be terminated, for whatever reason, with at least eight weeks of the OAL period remaining, SAP will continue to be paid for a period of eight weeks (draft reg. 22). However, this provision may be subject to amendment by the end of the consultation process, as it was an issue on which the government expressly sought comments²⁸.

Notice and evidence requirements

By virtue of s.4 of the EA 2002, an employee shall be entitled to SAP payments only if he or she gives the employer notice of the date from which he or she expects that liability to pay him or her SAP will begin. This notice shall be in writing if the employer so requests and should be given at least 28 days before the intended start date (or, if that is not reasonably practicable, as soon as is reasonably practicable). The draft (general) regulations further specify that this notice must include notice of the EDP (draft reg. 23(1)). The secretary of state has power under s.4 to make regulations imposing requirements about evidence of entitlement to SAP. The draft (general) regulations specify that the evidence required is as for entitlement to SAL, and is therefore covered by the matching certificate (reg. 24).

Working whilst in receipt of adoption pay

Section 4 of the EA 2002 provides that, except in such cases as may be prescribed, SAP shall not be payable to a person in respect of any week, during any part of which, he or she works for an employer who is not liable to pay him SAP. The draft (general) regulations make the same provisions as for SPP (draft (general) reg. 26(1)).

Termination of employment before start of adoption pay period

Under s.4 of the EA 2002, the secretary of state may, by regulation, specify cases in which certain entitlement conditions shall have effect subject to prescribed modifications. The draft (general) regulations provide that, where an employee who satisfies the conditions of entitlement to SAP leaves his or her employment for whatever reason (including dismissal), before the adoption pay period has begun, he or she will nevertheless receive SAP (draft reg. 29(1)). SAP payments will commence on the date the child is placed for adoption or, where the termination occurs on or within 14 days before the EDP, on the day immediately following the last day of his or her employment. This provision is intended to mirror the amended SMP position on continuing entitlement to SMP, despite early termination of employment (see below).

Miscellaneous provisions

Section 4 of the EA 2002 renders void any agreement to exclude or limit the SAP provisions, or to require an employee to contribute to the costs of SAP. SAP entitlement does not affect an employee's right to receive contractual remuneration for the same period, but each will go towards discharging the employer's liability to pay the other.

THE SCHEME OF STATUTORY PAYMENTS FOR EMPLOYERS

Sections 5 to 16 of the EA 2002 provide the Inland Revenue with the administrative and enforcement powers required to administer both SPP and SAP. They also provide for the exchange of information about SPP and SAP between the Inland Revenue, the Department of Trade and Industry and other relevant departments. The government has also published draft regulations specifying further detail on the administration of the two schemes: The Statutory Paternity Pay and Statutory Adoption Pay (Administration) Regulations, referred to in this section as "the draft regulations".

The SPP and SAP schemes mirror, as closely as possible, the arrangements for SMP as administered by the Inland Revenue, this being "what employers are used to"²⁹.

Employers will be able to recover a percentage of the amount they pay out both in SPP and SAP, limited in most cases to 92%. Small employers who are entitled to small employers' relief will be able to claim 100% and an added payment to compensate for the costs of administration (draft reg. 3). In April 2002, the threshold for small employer's relief was doubled to £40,000. The government estimates that, as a consequence, approximately 60% of employers will qualify for complete reimbursement.

Regulations may allow employers to request funding, if necessary, in advance from the Inland Revenue, where the amount of SPP or SAP that they have to pay employees exceeds the tax and NI contributions that they are due to pay to the Inland Revenue. The draft regulations, put out for consultation in May 2002, make provision for such advance funding applications, as well as for the possibility of the payments being deducted from sums owed by the employer to the Inland Revenue (draft regs. 4 and 5).

To ensure compliance, the EA 2002 provides for:

employers to keep appropriate records and to make periodic returns to the Inland Revenue; to produce those records for inspection by the Inland Revenue; and to provide information about entitlement to their employees;

the Inland Revenue to be able to obtain information from employers and employees who have claimed, or are claiming, SPP or SAP (and their spouses or partners), and employment agencies; to impose penalties where there is refusal, or repeated failure, to comply with requests for information or documents; and to make decisions on entitlement in the event of dispute;

appeals against decisions made and penalties awarded to be heard by the Independent Tax Commissioners; and

penalties where an employee either fraudulently claims SPP or SAP, or an employer fraudulently or negligently fails to make correct payments of SPP or SAP. In relation to SPP, the maximum penalty is £300; and with SAP, it is £3,000.

These provisions are further detailed in the draft regulations.

CHANGES TO MATERNITY LEAVE AND PAY PROVISION

"Everybody is bewildered by the existing system of maternity pay and leave, which is quite incomprehensibly complicated . . . The [EA 2002] and related regulations will simplify the system for maternity pay and leave, making it easier for businesses to understand and administer . . . [increase] the support that small businesses receive for administering maternity pay, with the result that about six out of 10 of all firms paying maternity pay will be able to reclaim their costs in full . . . [and] introduce changes that will allow firms to claim back the money that they pay out in maternity pay in advance - a particular bonus for small firms."³⁰

Sections 17 to 21 of the EA 2002 make various minor amendments to the provisions in the ERA dealing with maternity leave. (More substantial amendments are made by the EA 2002 to the provisions in the SSCBA dealing with SMP.) The detail of the changes, as with the new adoption and paternity rights, are to be implemented through regulations which will amend the 1999 Regulations. In May 2002, the government published a draft version of these regulations, The Draft Maternity and Parental Leave Regulations, which will implement proposals already detailed in its various responses to the public consultations of 2001. Reference to the draft regulations in this section is to these regulations.

Maternity leave periods

The most significant change to maternity provision is the extension and simplification of the maternity leave period. From April 2003, OML will be increased to 26 weeks from the current 18 weeks (draft reg. 12D(1)). As now, it will be possible to start OML at any time from the beginning of the 11th week before the EWC. AML will be for a further period of 26 weeks, commencing the day immediately after the last day of OML (draft reg. 12D(4)). The assumption will be that if the employee is entitled to AML, she will take it, so that she will be absent from work for a total period of one year. Current AML is for a period up to 29 weeks, starting the Sunday before the baby is born or, if the baby is born on a Sunday, that Sunday. This creates an apparent overlap between OML and AML, which has long been considered confusing, exacerbated further by the fact that the SMP period then appears to run into the AML period. One of the government's central objectives is to remove this source of confusion, and to introduce fixed periods of leave, so that employees and employers alike can have greater certainty as to the period and consequences of the employee's absence.

Entitlement

As the law currently stands, the qualifying service requirement varies for OML (available to all employees), AML (available to employees who have one year's service at the beginning of the 11th week before the EWC) and SMP (26 weeks' continuous service at the 15th week before the EWC). From April 2003, whilst all employees, regardless of service, will remain entitled to OML of 26 weeks, entitlement to AML, a further 26 weeks, and SMP, will be harmonised at 26 weeks' continuous service in or before the 15th week before the EWC (draft reg. 12B). This will mean that all employees with 26 weeks' service in or before the 15th week before the EWC will be entitled to 26 weeks' OML, during all of which they will be entitled to SMP (see below), and a further 26 weeks of AML, which will be unpaid.

Notification requirements

At present, an employee must notify her employer of her pregnancy, and her intention to take maternity leave, at least 21 days before she intends to start her leave (reg. 4(1)(a) of the 1999 Regulations). From April 2003, an employee will be required, in or before the 15th week before the EWC (or, if that is not reasonably practicable, as soon as is reasonably practicable), to notify her employer of her pregnancy, her EWC, and the date on which she intends her OML to start (draft reg. 12A(1)(a)). If the employee later wishes to change the intended start date of her leave, she will have to give notice at least 28 days before her amended start date (or, if that is not reasonably practicable, as soon as is reasonably practicable) (draft reg. 12A(2)).

There is also a new requirement on the employer, upon being notified of an employee's intended absence on maternity leave, to respond to the employee in writing, within 28 days of her notification, setting out her expected date of return from the maternity leave period (draft reg. 12A(4)). This duty is mirrored in relation to adoption leave.

If an employee wishes to return to work earlier than expected, she will have to give her employer at least 28 days' notice (draft reg. 12G(1)). The current requirement is 21 days (reg. 11(1) of the 1999 Regulations).

Sickness trigger

Currently, if an employee is absent from work with a pregnancy-related illness at any time after the beginning of the sixth week before the EWC, her maternity leave can start automatically (reg. 6(1)(b) of the 1999 Regulations). This six-week trigger is being reduced to four weeks, so that absence wholly or partly because of pregnancy, after the beginning of the fourth week before the EWC, will automatically trigger the commencement of the maternity leave period (draft reg. 12C(1)(b)).In response to concerns raised by employee representatives, the government has also indicated that it will look at producing guidance that will clearly state whether an employee can choose not to use the sickness trigger for the occasional day of absence³¹.

STATUTORY MATERNITY PAY

From April 2003, the period of entitlement to SMP is being increased from the current 18 weeks to 26 weeks to accord with the new OML period (s.18 of the EA 2002). The SMP rate is also to be changed (s.19 of the EA 2002). There are currently two rates: the higher, earnings-related rate (90% of average weekly earnings) paid for the first six weeks of OML, and underpinned by a flat rate of £75 which is paid where 90% of the employee's average weekly earnings is less than £75; and a flat rate, paid for the remaining 12 weeks, of £75 per week.

As from April 2003, the earnings-related rate for the first six weeks of maternity leave will remain at 90% of the employee's average weekly earnings, but it will no longer be underpinned by a flat rate of £75 per week for women on very low earnings (s.19 of the EA 2002). The remaining 20 weeks will then be paid at whichever is the lower of the earnings-related rate (90% of the employee's average weekly earnings), and such weekly rate as may be prescribed in regulations. From April 2003, the government has committed itself to a weekly rate of £100³².

This means that a woman commencing maternity leave after 6 April 2003 will receive SMP at the rate of 90% of her average weekly earnings for the first six weeks of that leave, and then whichever is the lower of either £100 per week, or 90% of her average weekly earnings, for a further 20 weeks.

The period to be used for the calculation of the earnings-related rate (as for assessing whether the employee earns over the lower earnings limit) is to remain the same, that is, the eight weeks immediately preceding the 14th week before the EWC (s.19 of the EA 2002), after the government backed down from its earlier position³³ that it would increase the calculation period to 26 weeks.

Notification requirements

By s.20(4) of the EA 2002, an employee must, in order to receive SMP, informher employer of the date from which she expects its liability to pay her SMP will begin. This notice must be given 28 days before that date, unless this is not reasonably practicable, in which case the notice must be given as soon as reasonably practicable. Currently, the minimum notice is 21 days (s.164(4) of the SSCBA).

Restoration of SMP entitlement

At present, a woman who otherwise qualifies for SMP loses that entitlement if she leaves her employment for a reason, other than dismissal for non-pregnancy related reasons, after the start of the 15th week before the EWC, but before the SMP payment can begin (from the 11th week before the EWC unless triggered by earlier childbirth). This follows a decision of the Social Security Commissioner in 2000³⁴, prior to which it had always been understood that women who left their employment after the 15th week before the EWC, for whatever reason, would still receive SMP. From April 2003, this position is to be restored, and so a woman who has sufficient service and earnings will remain entitled to SMP from her employer should her employment end, for whatever reason, after the beginning of the 15th week before the EWC (s.20 of the EA 2002).

SMP administration and advance recovery

In line with the scheme for SPP and SAP, the SSCBA is to be amended so that, from 2003, employers will be able to offset their SMP payments against any allowable payments due to be made to the Inland Revenue. Employers will also be able to apply to the Inland Revenue for advance funding if the amount they are due to pay in SMP will exceed the tax, NI contributions and other allowable payments due to be made to the Inland Revenue (s.21 of the EA 2002).

Maternity allowance

Section 48 of the EA 2002 provides that the standard rate of maternity allowance and the period of maternity allowance is to increase in line with SMP. From April 2003, the standard rate will therefore be the lower of either £100 or 90% of average weekly earnings, and the period will increase from 18 weeks to 26 weeks. To qualify for maternity allowance, women must have been employed or self-employed in at least 26 weeks of the 66 weeks ending with the week before the EWC (s.35(1) of the SSCBA). It may therefore be available to women who do not qualify for SMP due to insufficient service, or earning below the lower earnings limit, as well as self-employed women.

FLEXIBLE WORKING

"This is perhaps the most significant clause in the [EA 2002], taking us as it does into a brave new world of unchartered territory. It forms part of a package of measures that are aimed at improving choice for working parents and enhancing business competitiveness. The new proposals on flexible working will constitute an important step towards making parents' lives easier, while enabling them to retain their skills in the workplace."³⁵

"For the first time, the law will facilitate a dialogue between parents and their employers about working patterns that better meet parents' childcare responsibilities and employers' needs."³⁶

In June 2001, the government set up the Work and Parents Taskforce, with a remit "to develop the detail of legislation to give parents of young children a right to request flexible working and to have that request seriously considered by their employers". The result is s.47 of the EA 2002, which inserts a new Part 8A (ss.80F, 80G and 80I) into the ERA, introducing a new statutory right to request flexible working.

On 10 July 2002, the government published draft regulations and a consultation document on the new right to request flexible working. The draft regulations are in two parts: The Flexible Working (Eligibility, Complaints and Remedies) Regulations ("the draft (eligibility) regulations"), and The Flexible Working (Procedural Requirements) Regulations ("the draft (procedural) regulations"). Consultation closes on 10 October 2002.

Statutory right to request contract variation

From April 2003, employers will be under a legal duty to consider applications for flexible working from employees who are parents of children under six years of age, or of disabled children under 18. Section 80F(1) of the ERA introduces a new right for a "qualifying employee" to apply to his or her employer for a change to his or her terms and conditions of employment which relates to:

"(i) the hours he is required to work;

(ii) the times when he is required to work;

(iii) where, as between his home and a place of business of his employer, he is required to work; or

(iv) such other aspect of his terms and conditions of employment as the secretary of state may specify by regulations."

The change, if agreed, will be a permanent change to the employee's terms and conditions. The government has made clear³⁷ that employees have no right to revert back to their former work pattern should their childcare situation change.

Eligibility conditions

Only a "qualifying employee" can apply for a flexible working arrangement (s.80F(1) of the ERA). Such an employee must (i) satisfy such conditions as to duration of employment as may be specified by regulations; and (ii) must not be an agency worker (s.80F(8)), and must be one who, on the date on which the application is made, has been continuously employed for a period of no less than 26 weeks (draft reg. 3(a)).

Section 80F(1)(b) states the employee's purpose of applying for the change. This must be "to enable him to care for someone who, at the time of the application, is a child in respect of whom he satisfies such conditions as to relationship as the secretary of state may specify by regulations". The draft (eligibility) regulations specify that the employee must be:

(i) the biological parent, guardian, adopter or foster carer of the child;

(ii) married to a person within (i) and lives with the child; or

(iii) the partner of a person within (i) and lives with the child (reg. 3(1)(b)).

He or she must also have, or expect to have, responsibility for the upbringing of the child (reg. 3(1)(c)).

The draft (eligibility) regulations define "partner" as "a person (whether of a different sex or the same sex) who lives with the child, and the mother, father, adopter, guardian or foster parent in an enduring family relationship but is not a blood relative". The government is currently consulting on this proposed eligibility criterion, and has particularly requested views on (a) whether adoptive and foster parents should be included; and (b) the definition of "partner"³⁸.

The application for flexible working

In order to request flexible working, the employee must make a formal application for a change to his or her contract terms "before the 14th day before the child reaches the age of six or, if disabled, 18". A "disabled child" is a child who is entitled to a disability living allowance within the meaning of s.71 of the SSCBA (s.80F(7)).

The application must:

(a) state that it is an application for flexible working;

(b) specify the flexible working pattern applied for, and the date on which it is proposed the change should become effective;

(c) explain what effect, if any, the employee thinks the change will have on the employer and how, in his or her opinion, any such effect may be dealt with; and

(d) explain how the employee meets the required conditions as to relationship with a relevant child (s.80F(2)).

The draft (eligibility) regulations further specify that the application must:

be in writing (whether on paper, email or fax);

state whether a previous application has been made to the employer and, if so when; and

be signed and dated (reg. 4(1)).

The government has invited views on whether it should stipulate that the application should be made on a statutory form, or whether it should leave this to "best practice"³⁹.

To prevent repeated applications, the EA 2002 specifies that an employee cannot make a further application within 12 months of having submitted a previous one (s.80F(4)).

Grounds for refusal

An employer to whom an application for flexible working is made shall deal with the application in accordance with regulations made by the secretary of state (s.80G(1)(a) of the ERA).

By s.80G(1)(b), an employer to whom a proper application is made "shall only refuse the application because it considers that one or more of the following grounds applies:

(i) the burden of additional costs;

(ii) the detrimental effect on ability to meet customer demand;

(iii) inability to reorganise work among existing staff;

(iv) inability to recruit additional staff;

(v) detrimental impact on quality;

(vi) detrimental impact on performance;

(vii) insufficiency of work during the periods the employee proposes to work;

(viii) planned structural changes; and

(ix) such other grounds as may be specified in regulations."

The procedure following application

The employer's response to an application must accord with the procedure outlined in the EA 2002 and is to be further specified in regulations (s.80G(2) of the ERA). This procedure must include:

The holding of a meeting with the employee to discuss the application within 28 days of the application being made. The draft (entitlement) regulations specify that the date on which the application is received by the employer will be the date on which it will be treated as made (reg. 5), although this is an issue on which the government has invited views in the current consultation process⁴⁰. The government intends to specify in guidance that the meeting should not be confined to the employee's application, but should include, where the employer feels that the employee's proposed flexible working pattern is inconsistent with business requirements, a discussion of any possible alternative compromise arrangements⁴¹.

Giving the employee notice of its decision on the application within 14 days of the meeting, which may entail confirming any compromise agreed in the meeting. The draft regulations provide that this notice must also inform the employee of his or her right of appeal. The government has again invited views on whether these should be on a statutory form, or "best practice" guidance or letter templates⁴².

If the decision is to refuse the application, providing a sufficient explanation as to why the business grounds for refusal apply in the circumstances.

Providing a right for the employee to appeal a refusal within 14 days of receiving the employer's notification. The draft (procedural) regulations specify that the employee's notice of appeal must be in writing, must set out the grounds of the appeal and must be signed and dated by the employee (reg. 7). The government has again invited views on whether a statutory form should be devised for the employee's appeal or whether a best practice template will suffice⁴³.

Providing for a procedure governing the exercise of the employee's right of appeal.

Holding a meeting with the employee within 14 days of receiving the notice of appeal to discuss the appeal, unless, within those 14 days, the employer upholds the employee's appeal and notifies the employee of the date on which the flexible working arrangement will commence.

Giving the employee notice of its decision on appeal within 14 days of the appeal meeting.

Including in the notice of a decision dismissing the appeal, the grounds for that decision.

Providing for the employee to be accompanied at both the application and appeal meetings by a person to be specified in regulations, and providing for the postponement of the meeting if that person is not available to attend.

Providing a right to paid time off to such persons accompanying employees to flexible working meetings.

Extension of time limits

The draft (procedural) regulations provide that an employee and employer may agree to an extension of any of the time limits set out above (reg. 12(1)). An agreement must:

(a) be recorded in writing by the employer;

(b) specify what time limit the extension relates to;

(c) specify the date on which the extension is to end;

(d) be signed and dated; and

(e) be sent to the employee (reg. 12(2)).

This provision is intended to cover situations such as those where, at the meeting to discuss the employee's application, an employer has indicated willingness to consider a compromise flexible working arrangement but needs further time to assess its feasibility and likely impact on the business.

The draft (procedural) regulations also provide that, where the individual who normally considers an application is absent on annual leave or sick leave, the time limit will be extended to the date falling 28 days after the date on which that individual returns (reg. 13).

Employee's right to be accompanied

The draft (procedural) regulations specify that the employee's right to be accompanied at the first discussion meeting and the appeal meeting is a right to be accompanied by one person only (reg. 14(2)). This person might be either:

a fellow worker, or a full-time official employed by a trade union, or a lay union official experienced in, or trained at, acting as an employee companion at meetings, (as under the existing statutory right to be accompanied at disciplinary and grievance hearings (s.10 of the Employment Relations Act 1999 ("the ERelA")); or

another member of staff from the workplace (draft reg. 3).

The former is favoured by employees and the latter by employers.

The draft (procedural) regulations specify that the role of the companion will be the same as provided for by s.10 of the ERelA (regs. 2(b) and (c)). The companion will therefore have the right to address the meeting, and be allowed to confer with the employee during the meeting, but he or she will not be allowed to answer questions on the employee's behalf. The draft (procedural) regulations also repeat s.11 of the ERelA concerning complaints to an employment tribunal where an employer has failed to comply with the right of the employee to be accompanied. In such circumstances, a tribunal is able to award compensation to the employee of an amount not exceeding two weeks' pay (reg. 15). However, the government has specifically invited views on the companion's role, and on the penalty should the employer refuse to allow the employee to be accompanied⁴⁴. Both provisions may therefore be amended.

Tribunal complaint

A new s.80H of the ERA provides that an employee who applies to his or her employer for flexible working may present a complaint to an employment tribunal that the employer has:

(a) failed to comply with its statutory duties under s.80G(1) in relation to his or her application for flexible working; or

(b) based its decision to reject the application on incorrect facts.

No such complaint can be made until the employee has exhausted the employer's appeal process and has been notified of a decision to reject the application on appeal, or until the employer commits such breach of its duties as will be specified in regulations (s.80H(3)). No complaint will lie if the failure concerns the employee's right to be accompanied at meetings, as this will be a separate ground for complaint as detailed above (s.80H(4)).

The complaint has to be made within three months of either the date when the employee was notified of the appeal decision, or the date on which the alleged breach of the employer's duty was committed (s.80G(5)(a)). An extension of that time limit will only be possible if the tribunal is satisfied that it was not reasonably practicable for the complaint to be presented within that time, and the further time taken was reasonable (as with late unfair dismissal complaints) (s.80G(5)(b)).

If the tribunal considers that the employee's complaint is well-founded, it shall make a declaration to that effect and may:

(a) make an order for reconsideration of the application; and

(b) make an award of compensation to be paid by the employer to the employee (s.80I(1)).

The tribunal shall award such amount of compensation as it considers just and equitable in all the circumstances, but it shall not exceed the maximum amount, which is to be such number of weeks' pay as specified in regulations (ss.80I(2) and (3)). The government is currently consulting on what would be an appropriate number of weeks' pay for the maximum amount of compensation⁴⁵.

The tribunal's ability to scrutinise an employer's rejection of a flexible working application is therefore limited to assessing whether the employer has followed the correct procedure, and that the given grounds for that decision are based on correct facts. This latter ground will require the production of evidence by the parties, and findings of fact by the tribunal. The provisions do not, however, give the tribunal power to question the commercial validity or reasonableness of the employer's decision. If the tribunal finds that the employer's decision was based on incorrect facts, or that it had not followed the proper procedure, it can only order the reconsideration of the application, and award compensation, if considered just and equitable. Tribunals will not have the power to order an employer to implement a flexible working arrangement.The government's aim is not to erode managerial autonomy but rather to strongly encourage all employers to consider requests for flexible working seriously and fairly.

Arbitration and conciliation

The EA 2002 amends ss.18 and 19 of the Employment Tribunals Act 1996 ("the ETA") to enable Acas to conciliate between employer and employee upon an employee presenting a flexible working complaint to the tribunal (para. 23 to Schedule 7). More significantly, s.212A(1) of the Trade Union and Labour Relations (Consolidation) Act 1992 ("the TULRCA") has been amended to allow for the possibility of an Acas binding arbitration scheme to be used as a means of resolving flexible working disputes between employer and employee (para. 22 to Schedule 7). The government has stated its belief that the flexible working provisions "lend themselves very well to an Acas scheme. Disputes arising under those provisions will be relatively straightforward, concerning whether procedures have been contravened or if a decision by an employer to reject an application has been made on the basis of incorrect facts. These are essentially factual rather than legal issues."⁴⁶

The EA 2002 also inserts a new s.47D into the ERA to protect an employee who exercises, or proposes to exercise, any right concerning an application for flexible working, from suffering any detriment as a result. By a new s.104C, any consequent dismissal will be automatically unfair.

Discrimination claims

The new right to request flexible working does not preclude an employee's right to bring a claim under the anti-discrimination legislation concerning the request to change contractual terms and conditions. Women employees, in particular, are likely to treat a request for flexible working as the first step in a potential complaint of indirect sex discrimination under the Sex Discrimination Act 1975 ("the SDA"). If the employee is dissatisfied with the employer's response for rejecting her request for flexible working, her primary remedy will remain a complaint under the SDA. In this case, the tribunal's role will not be confined to merely ensuring that the employer has followed correct procedures, but will extend to requiring the employer to objectively justify its refusal if it is shown to have discriminatory impact. Compensation in these circumstances is potentially unlimited.

EQUAL PAY QUESTIONNAIRES

"We know that the absence of transparency on pay information contributes to and perpetuates the gender pay gap. The purpose of introducing a questionnaire procedure is to formalise the drive to transparency by providing a route to obtaining information about relevant issues, such as details of pay schemes and job grading systems, and about the way in which skills and experience are reflected in the company's pay system."⁴⁷

Section 42 of the EA 2002 amends the Equal Pay Act 1970 ("the EqPA") by inserting a new s.7B entitled "Questioning of Employer". It introduces, for the first time, a right for employees bringing, or considering, an equal pay claim to serve on their employers a questionnaire seeking relevant information "to decide whether to institute proceedings" and, if so, "to formulate and present the case in the most effective manner" (s.7B(2)). The forms by which an employee will be able to question the employer, and by which the employer will be able to respond to these questions, will be prescribed by the secretary of state.

The questions, and any answers provided, will be admissible as evidence in any equal pay proceedings (s.7B(3)), and a tribunal will be able to draw appropriate inferences from the employer's failure, deliberately and without reasonable excuse, to reply within a period prescribed by the secretary of state. This includes an inference that the employer has breached the implied equality term (s.7B(4)(a)). The tribunal can also draw such an inference if it considers that the employer's reply is evasive or equivocal (s.7B(4)(b)).

In sex, race and disability discrimination claims, the employer must respond to a questionnaire "within a reasonable time", but the provision for equal pay questionnaires allows the secretary of state to prescribe a time within which the employer must provide its response (s.7B(4)(a)). The government has stated that it intends to use this power in the interests of providing greater certainty for the parties and the tribunal. Its current intention is to specify a period of eight weeks⁴⁸.

Otherwise, these new provisions bring equal pay law into line with the rest of the anti-discrimination provisions.

The Employment Act 2002: main points to note The Act provides new statutory rights to paternity and adoption leave and pay, and to request flexible working, and amends existing maternity rights, all of which are due to come into effect in April 2003. Employees with 26 weeks' continuous service at the qualifying week are entitled to two weeks' paid paternity leave in respect of birth and adopted children. Employees with 26 weeks' continuous service at the qualifying week who are adopting a child will be entitled to ordinary adoption leave of 26 weeks, paid at a flat rate, and additional (unpaid) adoption leave of a further 26 weeks, giving a total leave period of one year. Maternity leave periods are to be increased and simplified. Ordinary maternity leave increases from 18 weeks to 26 weeks (as does the availability of statutory maternity pay), and additional maternity leave, entitlement to which becomes 26 weeks' continuous service at the qualifying week, is for a further 26 weeks (unpaid), giving a total leave period of one year. The notification requirement is harmonised with the qualifying week across the three schemes: in relation to birth children, for paternity and maternity leave and pay purposes, it is the 15th week before the EWC; in relation to adopted children, for paternity and adoption leave and pay purposes, it is the week in which the adopter is notified of having been matched with a child for the purposes of adoption. Twenty-eight days is an important trigger date across the three schemes. It is the minimum notice required for: (i) statutory paternity, adoption and maternity pay purposes; (ii) for changing the intended start date for all three types of leave; and (iii) for notifying the employer of an early return from either maternity or adoption leave. It is also the period within which the employer must respond to the employee's notification of intended adoption leave or maternity leave. The rate of payment is harmonised across the three schemes. From April 2003, this will be the lower of £100 or 90% of the employee's normal weekly earnings per week, with the exception of the first six weeks of SMP, which will continue to be paid at 90% of the employee's normal weekly earnings, but with the removal of the underpinning floor. The Act introduces a new right for employees with 26 weeks' continuous service, who are parents of children under six, or of disabled children up to the age of 18, to request a flexible working arrangement. The Act sets outs a detailed procedure with timescales which employers must follow upon receipt of the application. An employee whose request for flexible working is refused may present a complaint to an employment tribunal that the employer has either failed to comply with the statutory procedure or based its decision to reject the request on incorrect facts. The tribunal does not have power to order the implementation of a flexible working arrangement but may order that the application be reconsidered, or award compensation. Employees bringing equal pay claims are to have the right to serve a questionnaire on their employers seeking information relevant to their claim, or potential claim, bringing equal pay law into line with sex, race and disability discrimination laws.

References

1 12.2.02, Hansard (HC) col. 166

2 Cm 5005, December 2000

3 Work and parents: competitiveness and choice. A framework for adoption leave, April 2001; Work and parents: competitiveness and choice. A framework for paternity leave, April 2001; Work and parents: competitiveness and choice. A framework for simplification, April 2001; Work and parents: competitiveness and choice. Changes to parental leave, May 2001

4 Work and parents: competitiveness and choice. The governmental response on changes to parental leave, October 2001; Work and parents: competitiveness and choice. The government response on simplification of maternity leave, paternity leave and adoption leave, October 2001

5 The Maternity and Parental Leave Etc (Amendment) Regulations; The Paternity and Adoption Leave Regulations; The Statutory Paternity Pay and Statutory Adoption Pay (General) Regulations; The Statutory Paternity Pay and Statutory Adoption Pay (Weekly Rate) Regulations; The Statutory Paternity Pay and Statutory Adoption Pay (Administration) Regulations

6 Self-certificate of entitlement to paternity leave and pay in respect of a birth child; self-certificate of entitlement to paternity leave and pay in respect of an adopted child; certificate of notification of matching with a child for adoption; model letter for employers to acknowledge notification of maternity leave; and model letter for employers to acknowledge notification of adoption leave

7 8.1.02, Hansard (HC) Standing Committee F col. 261

8 See paras. 23-26 of Work and parents: competitiveness and choice. Consultation on draft regulations: maternity and parental leave, paternity and adoption leave, paternity and adoption pay, May 2002

9 See para. 8 of the Explanatory Notes to the EA 2002, and 13.3.02 Hansard, (HL) col. 4

10 13.3.02, Hansard (HL), col. 14

11 See paras. 14-16 of Work and parents: competitiveness and choice. Consultation on draft regulations: maternity and parental leave, paternity and adoption leave, paternity and adoption pay, May 2002

12 8.1.02, Hansard (HC) Standing Committee F col. 278

13 8.1.02, Hansard (HC) Standing Committee F, col. 268

14 10.1.02, Hansard (HC) Standing Committee F col. 316

15 10.1.02, Hansard (HC) Standing Committee F, col. 305

16 See paras. 27-32 of Work and parents: competitiveness and choice. Consultation on draft regulations: maternity and parental leave, paternity and adoption leave, paternity and adoption pay, May 2002

17 10.1.02, Hansard (HC) Standing Committee F col. 347

18 12.2.02, Hansard (HC) Standing Committee F col. 166

19 See paras. 33-35 of Work and parents: competitiveness and choice. Consultation on draft regulations: maternity and parental leave, paternity and adoption leave, paternity and adoption pay, May 2002

20 ibid, see paras. 14-16

21 8.1.01, Hansard (HC) Standing Committee F col. 258

22 See paras. 17-19, 33-35, 38-39 of Work and parents: competitiveness and choice. Consultation on draft regulations: maternity and parental leave, paternity and adoption leave, paternity and adoption pay, May 2002

23 Work and parents: competitiveness and choice. A framework for adoption leave, April 2001; Work and parents: competitiveness and choice. The government response on simplification of maternity leave, paternity leave and adoption leave, October 2001

24 Section 14 of the Adoption Act 1976

25 See reg. 2 of The Maternity and Parental Leave etc Regulations 1999, and s.171(1)(b) of the Social Security Contributions and Benefits Act 1992

26 See paras. 17-19 of Work and parents: competitiveness and choice. Consultation on draft regulations: maternity and parental leave, paternity and adoption leave, paternity and adoption pay, May 2002

27 See para. 67 of Work and parents: competitiveness and choice. The government response on simplification of maternity leave, paternity leave and adoption leave, October 2001

28 See paras. 17-19 of Work and parents: competitiveness and choice. Consultation on draft regulations: maternity and parental leave, paternity and adoption leave, paternity and adoption pay, May 2002

29 15.1.02, Hansard (HC) Standing Committee F col. 388

30 27.11.01, Hansard (HC) cols. 870 and 866-7

31 See paras. 105-106 of Work and parents: competitiveness and choice. The government response on simplification of maternity leave, paternity leave and adoption leave, October 2001

32 See para. 9 of Work and parents: competitiveness and choice. Consultation on draft regulations: maternity and parental leave, paternity and adoption leave, paternity and adoption pay, May 2002

33 See para. 26 of Work and Parents: competitiveness and choice. A framework for simplification, April 2001

34 See para. 41 of the Explanatory Notes to the EA 2002

35 22.1.02, Hansard (HC) Standing Committee F col. 583

36 ibid

37 24.1.02, Hansard (HC) Standing Committee F col. 625

38 See paras. 19-23 of Work and parents: competitiveness and choice. Consultation on draft regulations: flexible working provisions, July 2002

39 ibid, paras. 25-27

40 ibid, paras. 28-31

41 ibid, para. 49

42 ibid, para. 64

43 ibid, paras 68-69

44 ibid, paras. 59-60

45 See Work and parents: competitiveness and choice. Consultation on flexible working: compensation, April 2002

46 18.6.02, Hansard (HL) col. 699

47 17.1.02, Hansard (HC) Standing Committee F col. 443

48 See para. 95 of the Explanatory Notes to the EA 2002