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Shared parental leave laws come into effect

Shared parental leave laws come into effect

Shared parental leave laws come into effect

From 5 April 2015, new shared parental leave laws apply to parents following the birth or adoption of a child. The rules permit 50 weeks of leave to be shared between parents that meet certain eligibility criteria, with it possible to take the leave in one block, or split it with periods of work in between. Whilst offering greater flexibility for parents, there is concern that the rules may have detrimental effects on both parents and employers.

The introduction of greater flexibility

Bringing Britain in line with Sweden, which has offered workers the right to shared parental leave for more than 30 years, the UK has introduced new employment rules that are expected to affect 285,000 working couples. Parents who give birth, or have a child matched or placed for adoption, on or after 5 April 2015, may be entitled to share 50 weeks of leave, and 37 weeks of statutory shared parental pay.

Traditionally, it has only been open for mothers to take paid time off after welcoming a child into the family. In light of the new rules, mothers will continue to take the initial two weeks after birth away from work, but it will now be open for the remainder of the leave to be split between mothers and fathers. Mothers will now be able to cut their maternity leave short, and exchange it for shared parental leave. While not affecting a father’s entitlement to two weeks’ ordinary paternity leave, the scheme will replace “additional paternity leave” and introduce more flexibility into parenting arrangements.

The new leave does not have to be taken in one go, with parents able to decide who will take time off during their child’s first year and when, with provisions also enabling both parents to take leave at the same time. Periods of leave can be taken all in one go, or split into blocks, with parents returning to work in between. A mother also has independent flexibility in her working pattern by taking shared parental leave over traditional maternity leave, even where the father does not intend to take any extra time off work. If shared parental leave is not opted for, a mother’s right to take 52 weeks’ maternity leave is unaffected.

The arrangements must be agreed with a parent’s employer at least eight weeks in advance.

Understanding eligibility and the issues for parents

The rules regarding eligibility can appear somewhat complex. The leave is available to a child’s mother – and either the child’s father or the person who at the date of the child’s birth is the mother’s spouse, civil partner or partner. Partner is defined as the person that lives with the mother in an “enduring family relationship”, but who is not the mother’s child or parent, or other family relation including grandparent, sibling, aunt, uncle, niece or nephew.

Shared leave requires one parent to have at least 26 weeks of continuous service with the same employer by the end of the 15th week before the baby is due, or when matched with an adopted child. The other must have worked for 26 weeks in the 66 weeks leading to the due date, earning at least £30 a week in 13 of those weeks.

Employees themselves are under an obligation to check their eligibility for the scheme and provide a written declaration of this to their employers. Mothers must serve notice of an intention to serve maternity leave and agree arrangements with her employer.

However, there are concerns that in addition to the potential complexities of eligibility, some families may not be able to take advantage of the scheme on financial grounds. Shared parental leave pay is set at £139.58 a week, or 90% of an employee’s weekly earnings, whichever is lower. This is the same as maternity pay, except that statutory maternity pay amounts to 90% of whatever the employee earns in the first six weeks, with no maximum. Further, some employers choose to give employees full pay during maternity leave. It is not guaranteed that employers will enhance shared leave pay in the same way as maternity pay. This could open the door to discrimination claims, which in turn, could cause employers to strip back maternity pay to the basic rate.

Concern for the impact on employers

When the changes were first announced in 2013, the Institute of Directors business group described the proposals as a potential “nightmare”. In addition to concerns about discrimination claims from fathers, the group said the plans would “heap yet more burden onto struggling employers”. The group’s deputy director of policy, Alexander Ehmann said:

“The proposed system is considerably more complex and unwieldy than the current laws and employers will – once again – have to absorb the cost of adapting and implementing this new system”.

Additional training is now necessary for HR managers who will need to deal with requests for shared parental leave, with businesses now having to plan for employees who may no longer take one continuous period of leave, but take several smaller periods.

Chairman of the Federation of Small Businesses, John Allen, praised the measure as enabling women to take more control of the time they have off, but said “the rules are complicated and many small firms will find them challenging to implement”.

With only 5,700 couples expected to take advantage of the scheme in the first year, its initial impact scheme may be limited. The government’s conciliation service, ACAS, has drawn up some guidance on shared leave, but both employees and employers may need assistance on implementing and utilizing the changes

It is a legal requirement that employers provide their employees with certain contractual information. However, contracts, policies and procedures should not be viewed as a hindrance. In fact, to the contrary, they are vital tools that should exist in all businesses whatever their shape or size. These documents are critical in defining working relationships and will inevitably be the first port of call when any dispute arises. Investing in getting the written documents right from the outset can save a business time, hassle and money further down the line.

Our employment team has a breadth of experience drafting both complex and simple contracts, policies and procedures for a variety of sectors. The employment team will work with you to understand your industry, your business, your culture, your goals, and your workforce to ensure that your business invests in a suite of documentation that becomes an integral part of your organisation.

For advice on employment contracts and policies contact our employment law solicitors on 01895 207892. Alternatively email your details to employment@ibblaw.co.uk