Shared Parental Leave – will more flexibility for families mean complexity for employers?

The draft regulations will apply in relation to children born or adopted on or after 5 April 2015 but the implications can have effect already for expectant parents or adopters. Do you have plans in place to address these requests to share parental leave?

How will the regulations work in practice?

Mothers entitled to statutory maternity leave, statutory maternity pay or maternity allowance will have the option of curtailing their entitlement and sharing the balance with the child’s other parent. A similar right will be given to parents who adopt a child. The compulsory period of two weeks maternity leave for mothers, as well as the right to take two weeks’ paternity leave for fathers, will still apply. After that, parents will be able to share the balance of up to 50 weeks’ leave between them (39 of which are paid in accordance with statutory maternity (or adoption) pay.

The draft regulations will allow for parents to take shared parental leave at the same time or consecutively. The leave could also be taken as a continuous block or with gaps between leave periods. Where requests are for a continuous block, the parent is automatically entitled to take that leave. Requests for discontinuous leave, however, give the employer the opportunity to take advantage of a two week ‘consideration period’, during which they can agree to the requested leave, propose alternative dates or refuse the request. Parents will also be able to give notice to vary such leave, start dates or end dates, as well as how it is taken.

What should you be doing now?

Employers could start receiving requests for shared parental leave from as early as January 2015.  The new rules are complex and planning for cover under the new rules will inevitably be more complicated, with little discretion or power for employers. Our advice is to start planning for these changes now. One of the best steps employers can take at this stage is to ensure that a clearly worded policy is in place to deal with requests as well as having early and open communication with employees about proposals.

Another fundamental decision is considering whether to go beyond the statutory requirements and offer enhanced pay and benefits to those taking shared parental leave. Employers should be wary of potential sex discrimination claims from male employees on shared parental leave if they do not receive similar benefits to female employees on maternity leave. Employers should take note, however, of the recent case of Shuter v Ford Motor Company if they choose to pay shared parental leave at a lower rate than enhanced maternity pay. In this case, Ford successfully justified its policy of paying men on additional paternity leave the statutory minimum, even though it offered women on maternity leave generous enhanced pay. The Tribunal rejected the Claimant’s claim of sex discrimination on the basis that he was not in a comparable position to a female employee on maternity leave. The employee should have been compared instead to a female employee who had taken additional paternity leave, for example a female spouse or civil partner. Such an employee would have been treated in the same way as the Claimant in this case and would have been paid at the same rate. The Tribunal concluded that any less favourable treatment was not due to sex. These principles could be similarly applied to shared parental pay.

This decision can be helpful for employers who decide to provide lower enhanced pay to an employee on additional paternity leave (and the forthcoming shared parental leave) than an employee on maternity leave. However, it is important to remember that this is a first instance decision and another Employment Tribunal could reach a different conclusion. In addition, Ford were able to provide detailed evidence to justify the different approach. Documenting these decisions will therefore be crucial. Employers must also weigh up other issues, such as the impact on employee relations, where different rates of pay are provided for different types of leave.  It remains to be seen how much take up there will be amongst employees for shared parental leave. The existing provision for fathers to take additional paternity leave has been underutilised and so there may need to be more of a cultural shift in employee’s approach to leave before employers start to receive requests for shared parental leave.

Nonetheless, the complex regulations will require some planning and preparation by employers.

Other changes

Other changes to note from 1 October 2014 are as follows:

• National Minimum Wage rates have increased. The standard adult rate has increased from £6.31 to £6.50.
• Employees now have the right to take unpaid time off to accompany a pregnant woman with whom they have a ‘qualifying relationship’ to up to two antenatal appointments.

For further information or advice about shared parental leave, how the changes will impact on your organisation or for more details on the new rights from 1 October 2014,  please contact Kate Watkins or Damian Ward in our Employment Department on 0121 214 3716, kate.watkins@anthonycollins.com or 0121 214 3669, damian.ward@anthonycollins.com.

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