Shared Parental Leave - To Share Or Not To Share?
The Shared Parental Leave Regulations are heralded by the Government as a way of changing the working culture and helping businesses make the best use of women’s talents. But is this true? We ask whether Shared Parental Leave (SPL) will indeed become a revolution for working parents – or simply an administrative nightmare for employers.
- The law
After a lengthy consultation, SPL will come into force on 1 December 2014 (and not 1 October as originally anticipated), under the Children and Families Act 2014 (the Act) and the linked regulations (notably the Shared Parental Leave Regulations 2014 and the Statutory Shared Parental Pay (General) Regulations 2014). BIS has confirmed that supporting guidance and suggested forms will be published shortly.
For babies due (or a child adopted) on or after 5 April 2015, the new parents will now have a choice of maternity leave for the mother and/or SPL for both parents. The current system of Additional Paternity Leave (APL) and Pay will be abolished.
In summary, SPL works as follows:
- Parents can share 50 weeks’ leave in the year following a child’s birth or adoption (the mother must take the first two weeks post birth). Leave can be taken concurrently or consecutively, in blocks of weeks or continuously.
- Both parents will be paid during their period of SPL (subject to service and income requirements), up to the relevant existing levels of statutory maternity pay.
In order to qualify for SPL the mother must curtail her maternity rights and opt into the SPL regime. Both parents must also satisfy service requirements to qualify for SPL. Once opted into the SPL regime, a mother may not revert to her maternity rights.
- The intent
SPL builds on the changes to working practice already introduced on 30 June 2014 under the Act and the Flexible Working Regulations 2014 (FWR).
According to Minister Jo Swinson, SPL and FWR will help to change a working culture that is based on “stereotypes stuck in the past”, and give parents “greater flexibility about how they ‘mix and match’ care of their child”.
In designing the SPL proposals, the Government identified four key values for the new scheme:
- Protection – for pregnant women and mothers in the period immediately before and after child birth
- Flexibility – for employer and employee
- Simplicity – of systems for both parents and employers
- Responsibility and fairness – to provide a fairer balance between men and women and enable responsible negotiation between employers and working parents
Whilst these are values to be welcomed by employers and employees alike, it appears that they may have been lost or compromised in the final draft of the regulations. We look at the issues for employers and employees around each of them.
- The issues
Protection - By continuing the existing maternity legislation as well as introducing SPL, mothers retain the protection already enshrined in law. However, is this protection continued if a mother’s personal situation changes? In the event relations break down between the parents, the mother cannot revert to her previous maternity rights.
Many maternity-type protections have been carried through into the SPL regime. However, employers can choose, in our view, not to provide company enhanced maternity pay to those choosing to take SPL, thereby potentially reducing the financial protection available to the mother under the existing maternity leave regime.
Flexibility - SPL undoubtedly offers greater flexibility for parents, enabling them to share childcare during the first year of their child’s life. The introduction of 20 Keep In Touch (KIT) days per parent (in addition to the 10 KIT days during maternity leave) opens up an opportunity for further flexibility.
However, 33 weeks of Statutory Shared Parental Pay (ShPP) will likely make the new system unaffordable for many fathers if their usual income exceeds ShPP. SPL may therefore suffer the same lukewarm response faced by the APL regime.
Simplicity - despite the initial intention, the rules for SPL are anything but simple and may be one of the most significant factors in preventing the new scheme working properly.
SPL introduces a range of notice and data requirements for both employees and employers, as well as allowing parents the option to change the finalised dates and timing of their leave up to three times, all of which adds administrative complexity. Furthermore, the range of choices available to parents is likely to cause confusion rather than simplify the leave process.
Responsibility and fairness - the principles behind SPL are centred on equality and fairness for working parents. They aim to encourage men to take more leave so women can return to work earlier (and therefore go some way to reduce the gender pay gap and increase the number of women in senior positions).
Although the focus has been on employees, SPL also benefits working parents where one of them is self-employed. For example, if the mother is self-employed (including, for example, a member of an LLP) and entitled to receive maternity allowance then the father (depending on his service and income) may able to take SPL and be paid ShPP.
- Making it work
From our early conversations with clients, it is apparent that their concerns are driven by process and communications, rather than just legal requirements.
The real issues facing the new regulations are not legal but rather HR issues as set out below. Employers will need to engage with three main audiences: HR, management and employees, and seek to ensure that the new regulations are clearly communicated and that each audience understands the implications of the different options available.
- Ensure that systems and processes are in place to manage:
- Continuous and discontinuous leave;
- Change of dates – including notice requirements;
- Liaison with the employee’s partner’s employer if necessary;
- Tracking KIT days;
- Tracking holiday entitlement.
- Ensure that policies address key issues, including:
- the response if the employee fails to give the correct notice;
- the decision process if either partner changes their mind, including how flexible the employer will be if an employee’s personal circumstances change;
- the response to requests to work in discontinuous patterns, such as alternate weeks or in short blocks of leave;
- whether to offer enhanced pay during SPL to reflect any current company enhanced maternity pay.
The new arrangements are far more complicated than the current maternity rules and will require line managers to understand their obligations around managing staff and reporting to HR, for example:
- planning cover during the leave period;
- managing development opportunities and promotion;
- managing any departmental changes, including redundancies and reorganisations, to ensure equality and fairness for all individuals on SPL;
- reporting time sensitive requests to HR.
Employees with babies due on or after 5 April 2015 may be announcing their pregnancies soon and will likely want to understand their choices post birth. It is vital that employees understand what their options are, what they have to do and by when so as to ensure that they qualify for SPL. As SPL also affects male employees, employers may want to communicate the new regulations more widely to ensure that all parents understand their options under SPL.
This is a new and complex area of law. Getting the process and the entitlement wrong could have significant implications for the employee if their request is turned down. Similarly, the ramifications for the employer might include a negative impact on reputation and retention.
If the employer gets it right, with the right policy, and the right internal communication, SPL could add to its overall reputation as a flexible and enlightened company, which embraces diversity - all of which will help it attract and retain talented employees.
Abbiss Cadres is a multi-disciplinary practice, offering integrated HR expertise across Law and Tax, People Consulting and Communications. Emma Clark is an employment lawyer, Angela Mansell is an HR consultant and Kate Thompson is a communications consultant.
9 October 2014
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