Is “Family Friendly” The Enemy of The Small Employer?
Flexible Working, Maternity Leave, Statutory Maternity Pay, Paternity Leave, Statutory Paternity Pay, Adoption Leave, Statutory Adoption Pay, Parental Leave...
Small business owners may well feel some confusion and possibly some anxiety when reading the above list of what are often collectively referred to as “Family Friendly” provisions for employees. Whilst some of the above “Family- Friendly” provisions such as Maternity Leave have been around for years, Family-Friendly rights have been significantly extended over the last few years, and there are many new rules for employers to comply and contend with
The general idea behind the Family Friendly provisions is sensibly conceived. In theory employers plus the economy as a whole benefit from parents and carers being able to join or re-join the workforce. The workforce benefits from retaining quality employees, more people (especially women) can afford to go out and earn rather than remain reliant on the state, employees are happier and therefore more productive if they can cooperate with their employer to fit their work and family life together comfortably.
This is all very well for large companies and statutory sector employers, who have the resources to cover significant absences and to administer the statutory payments, but whilst they are Family Friendly, the impact of the ever extending rights of working parents might not at first glance seem very “employer friendly”. So by way of assistance, set out below is a reminder and summary of the main statutory family provisions, how they have changed most recently, and how they are due to be extended in the future.
Maternity Leave and Pay
From April 2007 52 weeks of Maternity Leave is available to employees regardless of whether they have been employed for a qualifying 26 weeks. This means that an employee has the right to take a year’s maternity leave even if they have just commenced employment and did not tell you that they were pregnant at the time you agreed to take them on. However, this is not as onerous as it may sound. Just because a pregnant employee qualifies for Maternity Leave, she does not necessarily qualify for Statutory Maternity Pay (SMP). The requirement to have had sufficient earnings and to have been employed for 26 weeks by the 15th week before the baby is due to be born still applies to SMP.
For those women who do qualify for SMP, from April 2007 it is payable for 39 weeks (9 months) rather than the previous 6 months. For full details of the qualifying conditions see the useful BERR website. A further extension of SMP to the full 52 weeks is intended to come into effect at some stage in the next few years. Whilst this may seem at first glance like a bitter pill for smaller employers to swallow, they should be able in most cases to recoup some or possibly all of the cost of SMP by offsetting it against PAYE/NI payments, thereby minimising the costs to them.
There have always been important considerations for employers regarding the right of women to return to work after maternity leave. It used to be that small employers (5 or less) were exempt from being liable for automatically unfair dismissal if they did not allow a woman back to work after maternity leave. That exemption has now been removed, and the smallest employers are treated in the same way as larger employers.
There is a distinction in relation to the right to return between employees who have taken up to 26 weeks maternity leave (ordinary maternity leave) and those who have taken up to 52 weeks (additional maternity leave). Employers, and in particular those who are planning any reorganisation involving a change to that employee’s position, or redundancies whilst they have a member of staff off on maternity leave, should be very careful to seek specialist advice in this regard.
A change that is favourable to employers is that return from additional maternity leave now needs more notice to be given, 8 weeks rather than the previous 4, giving employers more time to make arrangements for the employee's return. Employees on Maternity leave are now also allowed up to 10 "keeping in touch" days without their entitlement ceasing. This means that employers can benefit by staying in contact with employees who are away for some months if the employee wants to, which should help to maintain the relationship, make the transition back to work easier when the maternity leave ends, and hopefully improve retention rates among returning mothers.
Paternity Leave and Pay
There has been a statutory right to Paternity Leave since 2002. The right is to leave of 1 or 2 (consecutive) weeks, at any time up to 8 weeks after the date of birth. (there are separate rules on Paternity Pay and adoption). The leave is available to the father of the child, or to a husband/partner of the mother (or adopter) of the child, and the employee must expect to have responsibility for the child’s upbringing. Unlike for Maternity Leave, to qualify the employee needs 26 weeks continuous employment leading up to the 15th week before the expected week of birth.
Most employees who qualify for paternity leave will also qualify for Statutory Paternity Pay (SPP) during the 1 or 2 weeks of leave. The rate is the same as SMP (£117.18 per week) or 90% of average earnings if this is less. Again, employers should be able to recoup the cost of paying SPP. As with SMP, businesses with an annual National Insurance liability of £45,000 or less can claim back SPP in full plus 4.5% on top to compensate for administration costs.
Adoption Leave and Pay
From April 2007 Ordinary Statutory Adoption Pay was extended to a maximum of 39 weeks in the same way as SMP. The HMRC website has an Adoption Pay calculator available. A further (unpaid) 26 weeks of additional adoption leave is available in addition to the 26 weeks ordinary adoption leave, and this is expected to extend to the full 52 weeks in the same way as SMP in the near future. However, unlike maternity leave, a full 26 weeks service is still required to qualify for adoption leave. The rate of SAP is the same as for SMP and SPP. There are specific notice requirements which should be checked. A person with whom a child is expected to be placed with for adoption under UK law is entitled to statutory adoption leave and pay, and there are separate provisions for adoptions from overseas. Specialist advice should be sought.
Flexible Working
The current position is that qualifying employees with at least 6 months service have the right ensure that requests they make for flexible working arrangements are taken seriously by their employers. The most crucial thing for employers to note then, is that the law does not oblige employers to grant all or any requests for flexible working, it just obliges them to consider those requests properly. Of course, there is nothing to stop any employee from requesting flexible working arrangements at any time, but if they fall outside of the statutory flexible working criteria employers are under no obligation even to consider their request.
Flexible working arrangements could mean part-time work, re-arranging hours of work, or working from home. The new arrangements must be requested for the purpose of looking after the child/ren. Qualifying employees include parents, guardians and their husbands, wives and partners.
There is a statutory procedure for requesting, considering and responding, and only certain legitimate grounds can be given for refusal, including the burden of additional costs, and effect on the ability to meet customer demand. Reasonable consideration involves determining how the request fits in with the needs of the business, and often a compromise can be reached that suits both parties. Full information on the procedure and forms are available on the BERR and ACAS websites.
At the time of writing, the statutory right to have a request for flexible working considered properly is only available to parents of children under 6 (or 18 if disabled) but in May 2008 the government announced that this is set to be extended to parents of children up to 16, probably from April 2009. Watch this space for further information.
If a woman requests flexible working on her return from Maternity Leave, this is a sensitive and specialist area, and you should always take legal advice if you wish to minimise the risk of a discrimination claim.
Parental Leave
Parental leave is unpaid, pre-arranged blocks of time off work for parents and carers of children under 5 years (or 18 if disabled). Qualifying employees have a legally enforceable right to take up to 4 weeks unpaid leave (up to a maximum of 13 weeks if there is more than one child). The right is available to both men and women, and can be taken by both in relation to the same child. Employees should give at least 21 days notice. The favourable side of things from the employers’ perspective with this provision is that firstly, the leave is unpaid (unless anything in the employees contract provides otherwise), so take-up might not be as high as expected, and secondly, if an employer has a case that the business will be unduly disrupted by the leave being taken when requested, they can require the employee to postpone the leave for up to 6 weeks.
So it is clear that while the provisions can be onerous for employers, there are some positives to be found for small businesses among the Family Friendly provisions, and as such it is not fair to condemn the provisions as little more than the enemy of employers. Flexible employers are a factor in retaining mothers returning after maternity leave. Personnel Today this month reported a study by workingmums.co.uk who polled 1100 mothers about the return to work. The survey revealed that a lack of flexibility meant that employers were likely to lose their employees after maternity leave, with 75% saying they were looking for another job, and 55% starting new jobs rather than returning to their previous employers. Flexible working was cited as the most important factor, with flexible hours cited as the most desirable arrangement. Improving retention rates reduces staff turnover and reduces recruitment costs.
Employers who are “Family Friendly” and adapt to the changes might find that it is worth the extra administrative and legal burden to have a larger number of employees stay with them, who might be happier and more productive workers, benefiting both parties in the long run.
Please note that the above article is only a summary of some aspects of the family friendly provisions. You should not rely on the above as advice in any particular case, and should seek assistance from an employment law specialist to ensure that you are complying with your legal obligations and minimising the risk of claims against you.
Sandersons Solicitors
17-19 Parliament Street
Hull
HU1 2BH
Tel: 01482 324662
Fax: 01482 223110
e-mail: enquiries@sandersonssolicitors.co.uk
Source: Federation of Small Businesses, September 2008