Work and Families: Choice and Flexibility - part one

This week Caroline Blackwood of Osborne Clarke begins a series of articles on the Government's recently issued consultation document setting out its plans to improve the situation for working parents and other carers.

Introduction

Flexible working, work-life balance and family-friendly policies have all been hot topics in the workplace for some time now, and, over the course of the last few years, statutory regulations making provision for the UK's working parents have mushroomed. The pace shows no sign of slowing: the Government has recently issued a consultation document Work and Families: Choice and Flexibility (on the DTI website), setting out its plans to further improve the situation for working parents and other carers if Labour is elected for another term. The closing date for responses is 25 May 2005.

Obviously, these proposals may go by the wayside if the current Government is replaced at the next general election. However, it is interesting to see what may be round the corner, and to have the opportunity to feed into the consultation process.

This article outlines the proposals for change covered in the consultation document and considers the issues relating to the extension of statutory maternity and adoption pay in detail.

Proposals for further change

In the consultation document the Government is at pains to point out the strides that it has already made since taking power in 1997, including the fact that nearly all women are now entitled to 26 weeks' maternity pay and most may also take a further 26 weeks' unpaid maternity leave. It has also introduced parental leave and the right to two weeks' paid paternity leave; given all employees the right to take time off work to deal with family emergencies; introduced the right to request flexible working for parents of young or disabled children; and extended the rights that other parents enjoy to adoptive parents.

However, the Government now wishes to extend employees' rights in this area further and the consultation document sets out its proposals for change, giving options on how the proposals could be implemented, and asking for feedback on preferred methods. The main changes that the Government is proposing are:

Extension of maternity and adoption pay

The Government claims that paid maternity leave is associated with a range of significant health benefits for mothers and babies, including reduced levels of maternal depression, lower infant mortality, fewer low-birth-weight babies, more breastfeeding and more use of preventative health care, but that unpaid leave does not have these protective effects. In addition research has shown that many mothers find it hard to make use of the extra six months' unpaid leave to which most are entitled, due to financial pressures.

The Government therefore proposes to extend paid maternity and adoption leave to nine months from April 2007, with the ultimate goal of extending it to a full year's paid leave by the end of the next Parliament.

Changes to the nature of maternity leave

Alongside this, the Government is proposing changes to the conditions that employees must meet in order to qualify for additional maternity leave. Currently all female employees are entitled to 26 weeks' ordinary maternity leave, but in order to benefit from additional maternity leave a woman must have been in employment for 26 weeks at the 15^th week before her expected week of childbirth. Women who do not have the required length of qualifying service are also not eligible for statutory maternity pay, but receive maternity allowance. The Government intends that women who receive maternity allowance will be able to take nine months' paid leave, in the same way as women who receive statutory maternity pay. However, this would create an anomaly, because women without the requisite service would qualify for only six months' ordinary maternity leave, despite having the right to nine months' maternity allowance. Women in this position who chose to take the extra three months of leave would be vulnerable, as they would not have a statutory right to return to their job at the end of the extra leave. The Government therefore puts forward three options to change the current system to deal with this, these being that it could:

Under the first option women who do not qualify for statutory maternity pay would still qualify for additional maternity leave, and would therefore be able to take the extra three months' paid leave that the Government is proposing, without the issue of returning to the same or a similar position being a problem.

The second two options are more radical. At present a woman's rights differ significantly depending on whether she is on ordinary or additional maternity leave. During ordinary maternity leave a woman is entitled to benefit from all her terms and conditions of employment except for her normal pay. She is therefore entitled to such benefits as the use of a company car and childcare vouchers. During additional maternity leave the employee's contract remains in force but only in a limited way. In addition the right to return to work changes subtly from a right to return to the same job to a right to return to the same job, unless that is not reasonably practicable. If it is not reasonably practicable the entitlement is to return to a similar job on terms and conditions no less favourable.

Therefore, under options two and three, women would benefit from increased rights for their entire period of maternity leave, as well as extended maternity pay. The right of return would differ between options two and three. The most favourable option for women, and the most radical, would be option two. This would create a significant improvement in the benefits available for women during what is currently additional maternity leave, in addition to the Government's proposals to provide pay for a further three months' leave.

The Government is seeking views on which of the above options is preferable and why.

It also intends to apply the preferred approach to adoption leave.

Removal of the small-firm exemption

There is also a proposal to remove the current exception for firms with five or fewer employees that states that it will not be automatically unfair dismissal for such firms to refuse to allow an employee to return at the end of additional maternity or adoption leave if this is not reasonably practicable. In practice an individual in that position could still potentially bring claims for unfair dismissal and sex discrimination, so the exception affords small companies little comfort, and its removal will have little impact.

Increase to the flat rate of statutory maternity and adoption pay

Slipped in at the end of this section is a statement by the Government that its 'ambition is to increase the flat rate [of statutory maternity and adoption pay] to ensure all parents feel able to take the leave to which they are entitled'. It is seeking views on what the guiding principles should be for setting the level of statutory maternity and adoption pay.

The Government is also seeking views on whether there are any other measures that it should introduce to make the system of maternity and adoption leave and pay simpler to understand and administer.

Responses to the consultation can be e-mailed to Shirley Drake, Employment Relations Directorate, at workandfamilies@dti.gsi.gov.uk.

Next week's article will consider the Government's proposals in relation to effective communication between employers and employees during maternity leave.

Caroline Blackwood is a training and know-how lawyer in the employment, pensions and incentives department at Osborne Clarke (Caroline.Blackwood@osborneclarke.com)

Further information on Osborne Clarke can be accessed at www.osborneclarke.com