Shared Parental Leave: What Will It Mean For Your Business?
On the 1 December 2014, the Coalition Government introduced The Children and Families Act 2014 (“the 2014 Act”), which gives parents of children that have an expected week of childbirth, (or date of adoption) on or after the 5 April 2015, the right to opt to take “shared parental leave” (“SPL”) in the first year of their child’s life.
While the policy underpinning the 2014 Act is undeniably commendable, there still remain some serious concerns throughout industry, and the legal profession alike, as to how this policy will work in practice, and the impact the onerous and complex rules could have on up-take.
The 2014 Act allows for eligible parents to share 50 weeks’ leave and 37 weeks’ pay. It is still compulsory for the mother to take the first 2 weeks (and, in the case of factory workers, the first 4 weeks) of the full 52 weeks’ of maternity leave herself. After this, the mother can opt to end her entitlement to maternity leave and pay early, and elect to share her remaining leave and pay with her eligible spouse, civil partner or the father.
An employee can request a maximum of three separate blocks of leave. The requests may be for continuous or discontinuous leave. Continuous leave is where an employee is on uninterrupted leave throughout a single block of SPL. Discontinuous leave is where an employee has been allowed to break up a single block of SPL by returning to work for days or weeks during that block of SPL.
For non-factory workers, the first 2 weeks of the full 39 weeks of compulsory maternity leave will be paid as statutory maternity pay (“SMP”). Any of the remaining 37 weeks of SMP that is shared will be renamed “shared parental pay” (“ShPP”), and, like SMP, is paid at the rate of £139.58 per week, or 90% of the employee’s weekly earnings (whichever is lower). However, ShPP differs in one respect: in the first 6 weeks of SMP, the mother is entitled to 90% of whatever she earns, with no maximum cap; this will not be carried over to ShPP.
Dealing with Employee Requests
Employees must give employers no less than 8 weeks’ notice of any SPL s/he wishes to take or at least 8 weeks’ notice before each block of leave. The legislation prescribes a set list of information and declarations that need to be provided by both parents to both parents’ employers.
The information required is wide and varied, and includes providing a copy of the baby’s birth certificate or adoption certificate; parents’ financial statements; and, understandably, specific information relating to the dates, and period of leave requested. Many may find the new evidential requirements unnecessarily invasive, and there are certainly more onerous compliance requirements for SPL than for maternity leave.
Where the employee requests a continuous period of SPL, the employer must accept this.
As stated above, the employee can also apply for a discontinuous period of SPL. The employer has 2 weeks from the date of the application for discontinuous leave to agree, alter, or refuse the application. The employer is not required to supply the employee with justification as to why an application for discontinuous leave has been refused. However, it is important to note that the employer could leave itself open to a claim should two otherwise similar applications be treated differently.
As an employer, the administrative burden involved in dealing with each separate application for SPL may be significantly reduced if a standard form, checklist, or letter template is made available to employees looking to make an SPL request. It would be a positive step if employees were made aware of this information through a work-place seminar, or employee update bulletin, within which employers could set out clearly their approach to the new rules surrounding SPL and ShPP.
Contracts of Employment and Employee Handbooks may also need to be updated to reflect the introduction of SPL, ShPP and the abolition of Additional Paternity Leave.
Employers will also have to consider their policy on enhanced maternity and paternity pay, and whether there is an intention to extend this to ShPP. While the Government have stated that there is no requirement to pay enhanced ShPP, recent case law suggests that employers could leave themselves open to an indirect sex discrimination claim if this issue is not handled carefully.
The Department for Business, Innovation and Skills Modern Workplaces predicts that only 2-8% of fathers will take advantage of their new entitlement and even this has been said to be a generous estimate.
The reality is that affordability will likely be the determining factor for many families: if employers do not offer enhanced SPL for parents, this could have a detrimental effect on up-take, and potentially undermine the purpose of the 2014 Act entirely.