Research undertaken by Linklaters highlights the potential value of shared parental leave to employees. Gemma Parker considers what practical issues and policy decisions should be addressed to help smooth the way when it is introduced in April 2015.
Parents of babies due or children adopted after 5 April 2015 will be able to take advantage of shared parental leave (SPL), a completely new type of family leave. Working parents will be able to share up to 50 weeks of leave and 37 weeks of statutory pay which they can take at the same time or independently of one another. For the first time, fathers will be able to take a period of extended leave in the first six months of their child’s life, and discontinuous periods of SPL may be taken by either parent. These are big changes to the structure of family leave which employers can accept or welcome and embrace.
Increasing diversity and supporting women’s careers are increasingly high on employers’ agendas and SPL offers a real opportunity to drive change in these areas. Research by Linklaters in September 2014 into the attitudes of employees who are parents or prospective parents, across a spread of FTSE 100 companies, showed a high-level of interest in SPL, with 63 percent of women and 62 percent of men surveyed saying they would be interested in taking up the new right. Government predictions of take-up are much lower (around 2-6 percent of those eligible) but these figures are based on take-up of additional paternity leave, and SPL offers much more flexibility and has already received a lot more publicity. In addition to showing a high level of interest only 3 percent of female and 5 percent of male employees surveyed said that they believe SPL offers them no advantages.
SPL presents a significant opportunity for employers to support flexibility, choice and work-life balance, for both male and female employees, and is likely to increase workforce engagement and motivation. The level of financial and practical support available to employees taking SPL, and the attitudes of employees and management to SPL, are all likely to affect the extent to which it is positively received by employees, whether or not they are prospective parents.
The biggest practical issue employers face is whether to offer any enhanced pay to employees taking SPL, particularly where enhanced pay is currently offered to women on maternity leave.
Linklaters’ research shows that the availability of additional pay will influence whether employees who are interested in taking up SPL actually do so. 76 percent of both men and women who were interested in taking SPL said that entitlement to additional pay during SPL would be relevant to them deciding to take-up SPL. There is no statutory obligation on employers to enhance pay for SPL, but an employer may consider doing so in order to meet the expectations of employees or to support employer branding by enhancing workforce retention and recruitment. An employer with global operations will need to consider how enhanced pay will fit with policies operating in other countries, either where laws similar to SPL already exist (for example Portugal and the Nordics), or where they do not (most notably in the US and Asia).
An important consideration for employers considering enhancements is the opportunity to minimise the risk of claims of discrimination from men. Currently, the law expressly permits special treatment in relation to pregnancy or childbirth and offering enhanced pay available to mothers on maternity leave has been found to fall within this exception to the discrimination legislation. Further, a man taking paternity leave cannot properly compare himself to a women on maternity leave as each is a distinct right, serving a different purpose or so the argument goes. In the same way, SPL will be a different form of leave to maternity leave. These arguments have recently succeeded in the Employment Tribunal (Shuter v Ford Motor Company Ltd) and whilst this outcome supports the current proposition at a domestic level, the ECJ could take a different view. The risk therefore remains, that men may bring sex discrimination claims if they are not entitled to the same pay enhancements, when taking family leave including SPL, as women taking maternity leave.
For some, the question is already an academic one, as many big employers have already announced plans to enhance pay, including the civil service. Most are intending to match enhanced pay for SPL with that currently offered for maternity leave. Entitlements to enhanced pay for SPL are usually reduced by every week in respect of which the same parent receives enhanced maternity/paternity pay. To avoid discrimination, enhanced pay offered for SPL should be the same for both men and women. There is a risk of discrimination if enhancements for SPL do not match those for maternity pay, but, as currently, employers must balance this against the increased cost if they do. One option, allbeit one that is unpopular with employees, is to reduce any current enhanced maternity pay entitlement, and match this reduced entitlement with pay for SPL. This is much more likely to be palatable where the existing enhanced pay entitlement is generous within the market, and where the reduction in pay is balanced by a positive, such as abolishing any repayment obligation.
Where enhanced pay for SPL is to be offered, employers must then decide whether any conditions will be attached, for example, that the leave be taken in a continuous block or in the first six month’s of a child’s life/adoption. Enhanced pay is an important endorsement of employees taking SPL, but it is unlikely to be sufficient in isolation to encourage employees to do so. Employers looking to really harness the potential benefits of SPL, need to create a work environment which fully supports individuals to choose SPL. Underlining the importance of cultural change, 62 percent of both men and women surveyed by Linklaters said that concerns about how SPL could be perceived by management or damage to their career prospects were relevant factors that would influence them not to take SPL.
Negative assumptions about the commitment and attitude of an employee opting for SPL, as well as resentment from employees who are not prospective parents are potential issues. Encouraging managers to see SPL as a small part in the much bigger picture of an employee’s career, and part of a wider flexibility offering available to all is important to tackle both of these. Ultimately, awareness of the right to SPL throughout the workforce and training of managers who are likely to receive requests on how best to approach these, will be key to avoiding raised eyebrows and at worst, legal claims from individuals alleging they have suffered detriment as a result of trying to take or taking SPL.
Another significant practical issue is how absence on SPL will be covered. This is related to the approach the employer takes to requests for multiple discontinuous periods of leave. Employers are entitled to refuse a request for more than one period of SPL, but only where this is made in a single leave request. Employees can still take up to three periods of SPL if notice of each period is given in a separate leave notice (the maximum number of leave notices that can be given is three). Many employers are concerned about the potential disruption of employees taking discontinuous periods of leave, but these may prove to be unfounded. Linklaters’ research showed a significant preference amongst employees for taking a single rather than multiple periods of leave, perhaps because too much change is difficult to manage domestically as well as in the workplace. Even where employees are keen on taking more than one period of leave, this may be an advantage for the employer, if periods of leave and absence can be matched with the peaks and troughs of business demands.
Proper planning for periods of SPL will help to make the transition between leave and work smoother. Impending maternity leave is usually obvious, but a man’s intention to take SPL may not be known until the eight week deadline for putting in a notification prior to taking SPL approaches. Awareness of SPL and good communication should support employees taking SPL, allowing them to do so in the knowledge that their workload is not building up uncontrollably in their absence. It is also important to alleviate any concerns of those not taking SPL, that they will be expected to take on unrealistic volumes of work to cover.
Often, where SPL is positively endorsed by the employer, this is part of a wider programme to encourage diversity and flexibility and support employees in achieving work-life balance. Employees’ expectations of the support their employer may provide in relation to other initiatives may be increased. Managers need to anticipate and manage this. The introduction of SPL is an opportunity to reinforce these other initiatives and to give thought to how they might be endorsed. After all, fathers who have taken a more active part in the first year of their child’s life are likely to have a greater appetite for ongoing flexibility than previously.
In the short term, good communications, promoting awareness of the right to SPL and how to take it, as well as training of managers who may receive requests, will facilitate the smooth introduction of SPL. Where enhanced pay is available this is likely to encourage higher take-up rates. In the longer term, SPL is most likely to have a positive impact in organisations where changes are made to encourage a culture supportive of employees taking SPL, as part of wider initiatives to increase diversity and promote work-life balance.
