The Government has launched a review it calls “landmark”, including the minimum statutory pay and parental leave that employers must offer.
The government was asked to undertake the review in May, by academics, charities and unions. This follows harsh criticisms from MPs last week, who claimed that the system is “fundamentally flawed”.
The review will examine statutory leave or the minimum amount of time that employers are required to provide under law, and is funded by government. The review will also examine how well maternity, paternity, and shared parental leaves are working or not working.
The review is part the government’s “Make Work Pay” plan, announced in last year. This plan is intended to combat low wages, poor working conditions, and poor job security.
The government said that the review “will collect views from parents and employers across the country, and will conclude with a road map for possible reforms”, but no timeline was given.
Angela Rayner, Deputy Prime Minister of Australia, said: “Through the Plan to Make Work pay we are already improving parental leave with new rights from day one. This ambitious review is a commitment to working families.
Jonathan Reynolds, the Business Secretary, added: “Campaigners had long called for change and this government listened.” This review gives us the chance to rebuild a system that is suitable for modern families and business.
Ministers have said that the review will examine all aspects of the system, from shared parental leave to maternity and paternity leaves, to determine how to make it better for both parents and employers.
It added that the current system is too complicated. One in three fathers don’t take paternity leaves because they can’t afford it, and the take-up rate of shared parental leave is “very low”.
The current statutory system allows new mothers and parents of newborns to take up 52 weeks off from work.
The first six weeks are paid at 90% of the average weekly earnings. The next 33 weeks will be paid either at PS187.18 or 90% of the average weekly earnings, whichever is less.
If the new mother works for herself or makes less than PS125 per week, she is not eligible to receive statutory maternity leave.
In 2003, the UK introduced statutory paternity leave that allows new fathers or second parents to take two weeks of paid time off.
For the same two-week period as maternity leave, eligible women receive PS187.18 per week, or 90% of their average weekly earnings, whichever amount is lower. This does not apply to those who are self-employed, or who earn less than PS125 per week.
In 2014, shared parental leave was implemented. It allows parents to split up to 50 weeks’ leave and up 37 weeks’ pay following the birth or adoption a child.
Reforms that are’meaningful and meaningful’
Claire McCartney of the Chartered Institute of Personnel and Development, a policy and practice manager, said that the CIPD was eager for the review to “be meaningful”.
She said: “The system doesn’t work, and the government needs to conduct a comprehensive and holistic review that will support better, fairer, and fuller employment opportunities for working parents.”
The CIPD in particular supported the Women and Equalities Committee’s recommendations to increase paternity leaves to up to six full-time weeks, or close to it, and simplify the complex shared parental leave system.
McCartney said that the government should review successful international approaches and take steps to remove wider cultural and social barriers to fathers taking additional leave.
She said: “We encourage government to consult with employers, representatives bodies, and working parents during this review, to ensure that the recommendations are realistic, practical, and likely to lead to real change.”
Nicola Wallbank is an employment partner with Freeths. She welcomed the admission by the government that shared parental leave still has a very low take-up. She said that the complexity of the system (which employers and employees don’t fully understand) and the fact it takes away the parental leave from the parent who is on maternity leave are two factors contributing to the low take-up.
“Under the present regime, we have seen many employers, often of a larger size, take it upon themselves to enhance maternity, paternity and adoption entitlements, as well as shared parental rights, in an effort to support their employees and provide a wider array of benefits. Often, advice is sought to ensure that such policies are non-discriminatory and fair.
“A more balanced and better-balanced system would improve the situation for many families. This is especially true for those with lower incomes.” While most people agree that allowing both parents to spend more time with their children is a great idea, Wallbank said that smaller businesses might be worried about the extra costs or the strain on resources that could result.
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