The “Consultation on Modern Workplaces” launched by the Government in May 2011 proposes radical changes for 2015 to maternity and parental leave, which could create a huge administrative burden on employers, and shifts the focus of diversity measures away from women, toward equal treatment for both parents, plus additional paid leave.

Employers don’t need to know the full details of the consultation at this stage, but should be aware of the proposals so that they can either prepare in advance or participate in the consultation through relevant trade groups as the potential impact on all size of employer is considerable.

Summary of proposed changes to family friendly provisions from April 2015

• Reduce maternity leave from 52 to 18 weeks   
• Introduce new parental leave for 34 weeks following 18th week after birth
• SMP payable during 18 weeks   
• Lower rate statutory parental pay payable for 21 weeks of the new parental leave period
• Four weeks of the new parental leave can be taken concurrently by both parents and paid at the lower rate statutory parental pay  
• Expectant fathers/partners entitled to unpaid time off to attend ante natal appointments
• No changes proposed to 2 weeks paternity leave around the birth   
• Proposal to remove the new additional paternity leave rights
• No changes to unpaid parental leave of 4 weeks per annum after child’s first year   
• No changes to eligibility for maternity and parental leave

Whereas previous family-friendly measures favoured women in their role as primary child carers and were aimed at encouraging women to return to work, the intention of these proposals is to increase flexibility and family rights for all, not just women. The proposals may have the result of parents’ respective remuneration package driving the decision as to which parent takes the bulk of the statutory leave following birth (or placement) of a child.

Given the fact that gender pay inequality, according to recent statistics, still exists and will not imminently be resolved, the question is whether fathers/partners will actually take the bulk of the leave instead of women.  It may take a generation to change this.  Uptake on the new additional paternity leave entitlement will give a good indication as to whether the proposed maternity/parental leave changes will be effective.

If the proposal does take effect, employers who offer enhanced maternity pay, which goes beyond the first 18 weeks, may need to consider whether they will extend these enhanced terms to both partners (if they work for the same company) if they take up to 4 weeks together, or, where the leave is transferred to the father/civil partner on the mother returning to work after 18 weeks, to the father/civil partner.  Otherwise, there could be concerns over sex discrimination.

One thing that is certain is that the administrative burden on employers in implementing these initiatives will increase. First, as a result of phasing out the new additional paternity leave rights, and second, from operating paid parental leave for up to 4 weeks for both parents, and then extended parental leave for up to 34 weeks (of which 21 may be paid at the statutory rate).

An analysis of how the new additional paternity leave is utilised will give a useful indication as to whether changing the current maternity and parental leave procedures is appropriate and necessary. 

Proposed changes to flexible working from April 2015

• Extend right to request flexible working to all employees    
• Employees may make more than one request per 12 month period if first request was “temporary”. 

A culture change is required in most organisations for the proposed extension for flexible working to be effective.
At present the proposals give employers an entitlement to consider a request “reasonably” under the new proposals and prioritise competing requests given the extension of this right to all of its employees and the anticipated increase in requests.

The aim is to free up an employer’s ability to balance requests with business needs and have franker discussions with applicants as to why they can accept certain flexible working requests from part of a team but not all. 

The statutory business reasons for refusing a request would remain and employers would still need to show that competing requests could not be accommodated for these reasons.

There is no doubt that this will increase the administrative burden for all employers and increase the need for employers to be aware of all applications it grants so that it can balance its business needs. Initially, it is proposed that small or start up businesses will be excluded. 

Proposed changes to annual leave from April 2012

• Employees who fall ill during holiday will not forfeit their leave.
• Employees can retake the holiday in the current year or carry up to 4 weeks forward.   
• All statutory holiday will continue to accrue to employees on long term sick leave
• Untaken leave accrued due to maternity, adoption, parental or paternity leave, to be carried forward.   
• Employer may buy out 1.6 weeks of statutory holiday or require employees to carry forward up to 1.6 weeks holiday if genuine business reasons prevent employee from taking leave in the relevant holiday year.
• On a lesser scale, by 2012, it is proposed that the rights of accrued holiday during sickness will be clarified to conform with current case law. Unlike the above proposed changes to maternity and parental leave, these proposals are more likely to come into force in order to resolve common practical difficulties around holiday.

Proposed changes to equal pay – compulsory pay audits   

• Employers can be ordered by an Employment Tribunal to carry out an equal pay audit and publish the results in the event that they lose an equal pay claim.    
• Employers who have conducted an audit within 3 years, or have other appropriate means of ensuring non-discrimination in its pay structure such as transparency or for whom the order is inappropriate, may avoid such an order. 

More significant is the proposal for Employment Tribunals to order employers who lose equal pay claims to conduct an equal pay audit except in certain circumstances. While the proposal would appear to lack teeth, as the Employment Tribunal is not obliged to order a compulsory pay audit, the risk of an order being made given the impact this would have for all employees may well be of sufficient concern to any employer facing such a claim. 

There are a number of specific issues that may well be influenced by proactive participation in the consultation process, for example, to influence what size of employers should be exempt, what “publication” of equal pay audits means, or whether failure to comply is subject to a fine only or treated as contempt of court.

This provision complements the current voluntary equal pay audit proposal over which the Government’s Equalities Office is already in consultation with the EHRC.

Employers are advised to contribute to the consultation through appropriate forums.

Emma Bartlett is a Partner in the Employment team at Speechly Bircham LLP. Emma can be contacted on +44 (0)20 7427 6450 or on [email protected].