In November 2012, Nick Clegg announced reforms which he said would “shatter the perception that women have to be the primary-care givers…this is good news…for employers too who will benefit from a much more flexible and motivated workforce.” Article from law firm Kemp Little.
Two years on, the aforementioned reforms have crystallised into the Shared Parental Leave Regulations 2014 (the “Regulations”) which will come into force on 1 December this year and affect parents of babies whose expected week of birth falls on or after 5 April 2015. But will they live up to the hype? Possibly not. The heralded reforms have now morphed into a horrendously complicated system which will not be deciphered readily by employers or employees – meaning that in many cases, it may be ignored. It is worth noting here that the system of shared parental leave will sit alongside existing rights to maternity leave and pay and the two weeks’ ordinary paternity leave. So employees can opt to continue to benefit from these rights. The alternative is for the mother to choose to bring her maternity leave to an end in order to opt into the shared parental leave system. There are two main reasons why she might choose to do this, 1) so that she can share the leave with her partner or 2) so that she can take leave in blocks and return to work in the interim periods.
Likely uptake by dads
It is often forgotten that dads already have a right to take up to 26 weeks’ additional paternity leave once the mother of their child has returned to work. However, a TUC survey last year found that of those eligible to do so, only 0.6 percent took additional paternity leave. The reason for this is most likely to be that generally speaking, those on additional paternity leave receive no more than the statutory rate of pay, which is currently £138.18 a week. Most families depend on the father’s income to support the household and cannot afford to do without this for any length of time – so dads stay at work and mums remain on maternity leave for as long as they want and can afford to, up to the one year maximum.
It is interesting to contrast the UK’s situation with that of Sweden, where shared parental leave was introduced forty years ago. However, Swedish dads only started to exercise their rights when pay for such periods of leave was increased. Today, around a quarter of parental leave in Sweden is taken by dads, at least partly as a result of the fact that where dads take two months of leave, the family is then entitled to a further two months’ leave.
So when predicting the likely uptake of shared parental leave, the critical question is whether dads on such leave will receive enhanced pay. And here lies the problem. If an employer were to offer significantly enhanced pay for shared parental leave, this could become costly – since all of its employees, whether male or female, would be potentially eligible. The only obvious way to mitigate this would be to reduce enhanced maternity pay so that overall, the cost to the business is no greater. But announcing reduced levels of maternity pay for existing staff is unlikely to be attractive from an employee relations standpoint. So the sense that we have is that most employers are not enhancing pay for shared parental leave, preferring to wait and see how market practice on this front evolves. (A notable exception to this is the civil service, which recently announced that it would offer up to six months’ full pay to be split between parents.)
Discrimination risk
One related question being asked is whether by offering enhanced maternity pay but not enhanced pay for shared parental leave, employers will be leaving themselves open to claims for sex discrimination. Guidance published by BIS in September 2014 states not, but this is not binding on the courts. The recent Employment Tribunal case of Shuter v Ford Motor Company (which relates to the current additional paternity leave regime) provides a further indication. Mr Shuter brought direct and indirect sex discrimination claims in respect of Ford’s policy of paying enhanced maternity pay to female staff but only statutory pay in respect of additional paternity pay. While both claims were dismissed by the tribunal, it found that Ford’s policy constituted indirect sex discrimination. Ford were able to objectively justify this by reference to a policy objective of recruiting and retaining women in a male dominated workforce, but clearly not all employers will be able to rely on such an objective, meaning that the possibility of further successful claims (whether in the context of additional paternity leave or shared parental leave) cannot be discounted.
Use of blocks of leave
As noted above, there is a second reason why employees might be tempted to opt for shared parental leave over maternity leave, which is the flexibility to take blocks of leave and to return to work in the interim. There could be reasons why this might appeal to an individual, for example if it fitted in with school holidays, or the needs of family members providing child care. But in most cases, once a woman has put in place the arrangements necessary to return to work, she is unlikely to want to go on leave again. So although there has been a great deal of concern from employers about how they are to manage up to three blocks of leave being taken by the same employee, it seems unlikely that many mothers will request this.
Where does this leave us?
For most families, the only practical and economically sound decision will be for the mother to stay at home on maternity leave and for the father to go back to work after taking two weeks of ordinary paternity leave following the birth of the baby. In other words, we will end up exactly where we are now. Whilst there is broad support for the concept of a system which enables families to decide who will remain off work with a new baby and which frees women from having to be the primary care giver, the fact is that in order to be effective, such a system would need to be funded. There is no possibility of this coming from the public purse in the foreseeable future, and most employers are not going to pay up unless they have to. So whilst women do not “have to be the primary care givers”, my prediction is that most will be for some years to come, and that for most dads, 5 April 2015 will be just another day in the office.
