A shake-up of UK regulation will allow couples to share 50 weeks’ parental leave from 2015, but the business impact remains unclear

An administrative headache or the key to a competitive 21st century workforce? The UK Government consultation on the proposed new “shared parental leave” system has now closed. The system could see fathers taking as much as 50 weeks’ parental leave. It could also radically change the career paths of mothers and return these skilled resources to the economy more quickly. But how will it work in practice? Some commentators question the impact on a society that sees childcare as a primarily female responsibility. Others have highlighted the real difficulties for employers managing cover under the proposed new system. The lack of provision for coordination between employers over couples’ requests also seems problematic, potentially leaving employers open to fraud. In advance of the publication of the consultation results, some of these key issues are examined here.

The Current Statutory Maternity and Paternity Leave Regime

Maternity Leave: Currently, mothers are entitled to a maximum of 52 weeks’ leave following the birth or adoption of a child. The first two weeks immediately following the birth or placement for adoption of the child are mandatory. An employee on maternity leave is entitled to be paid for the first 39 weeks of maternity leave, initially at a rate of 90 percent of their average weekly earnings for the first six weeks, and then the lower of 90 percent of their average weekly earnings or the statutory rate (which is currently £136.78 per week) for the next 33 weeks.

Paternity Leave: New fathers/partners of new mothers are entitled, as a minimum, to two weeks’ statutory paternity leave to be taken within 56 days of a child’s birth or placement for adoption. This is payable at the lower of 90 percent of their average weekly earnings or the statutory rate.

The “additional paternity leave” regime is effective for children due on or after 3 April 2011. Here, if a mother returns to work before the end of her 52-week statutory maternity leave period, the father/her partner is entitled to use the remaining unused portion of her maternity leave. If the mother has returned to work before the end of the 39-week paid statutory maternity leave period, the father/mother’s partner is also entitled to the remaining portion of unclaimed statutory maternity pay.

The two main conditions attached to the existing additional paternity leave regime are that: (i) the father/mother’s partner is only entitled to additional paternity leave if the mother has returned to work; and (ii) the period of additional paternity leave cannot begin any earlier than 20 weeks from the date of the child’s birth or placement for adoption.

Proposed New Regime

The proposed shared parental leave regime will maintain the two-week compulsory maternity leave period for the mother immediately following the child’s birth or placement for adoption. However, after this initial two-week period, both parents will be entitled to share the remaining 50 weeks’ parental leave in any way they choose. This means both parents can take their joint parental leave entitlement either concurrently or consecutively, by alternating in periods of no less than one week at a time. The total number of weeks taken by both parents in aggregate must not exceed 52 (including the mother’s compulsory two weeks). This new regime will therefore permit mothers to return to work immediately after the initial compulsory two-week period, allowing the father/mother’s partner to take the whole of the remaining 50 weeks.

In accordance with the existing statutory maternity pay system, only the first 39 weeks of parental leave will be paid. The existing minimum two weeks’ statutory paid paternity leave system will continue to operate as before. The current additional paternity leave regime will be abolished.

Unresolved Concerns for Businesses

The consultation period has raised a number of practical concerns set to test employers unless resolved.

Firstly, employees will not be required to provide their employers with full details of their plans regarding the whole parental leave period from the outset. They will be required to give employers eight weeks’ notice of their intention to end the maternity leave and commence the shared parental leave, and the separate employers of both parents must then agree with their respective employees to the pattern of parental leave. However, there is no limit to the number of times parents can alternate between weeks of parental leave and work, which can result in their employers receiving notice of multiple proposed periods of leave in an ad hoc and piecemeal fashion. This aspect of the regime has the potential to be a real headache for employers.

The Department of Business Innovation and Skills (BIS) envisages that the new system will require a “light touch” administrative approach but employers have expressed disquiet about the anticipated managerial burden of implementing the new policy. For example, although BIS has stated it does not expect that each parent’s respective employer will need to contact the other in order to verify their employees’ leave entitlements, it is difficult to see how this can otherwise be achieved without risking errors or even employee fraud.

The increased flexibility for parents also means that employers may find themselves obliged to hire short-term replacements for these employees or share the burden of additional work amongst other employees.

The draft proposals do not provide clarity on a number of potential issues. For example, it is not clear how to resolve a situation where one parent’s employer agrees to a proposed pattern of leave, but the other employer does not. It is proposed that if an employee cannot agree on a pattern of leave with their employer, then the total amount of parental leave requested should be taken in one block. However, this may not be convenient for the other parent and their employer. Additionally, the UK Government has not provided guidance on what, if any, valid reasons an employer may be entitled to give for rejecting an employee’s request for a particular pattern of shared parental leave.

Employers may face another potential burden if they are required to keep an employee’s existing job open for them until their return from parental leave — the government consultation paper does not clarify whether or not this will be required. This right to return to the same job exists under the current regulations. However, it may be a lot more disruptive where an employee can return to work and leave a number of times in a year. In an effort to address this issue, the consultation paper proposes an additional 10 Keeping In Touch (KIT) days, in addition to the 10 KIT days which exist under the current regime. It is hoped that these additional KIT days may serve as a useful trial period for new working arrangements or will allow for a phased return to work.

Company-specific enhanced maternity pay policies represent a further complication. BIS has stated that employers may continue to offer enhanced maternity pay to female employees who are on maternity leave or shared parental leave but will not be obliged to offer the same enhanced pay to male employees on shared parental leave. However, it is difficult to see how a challenge to this approach on the grounds of sex discrimination could be successfully defended.

Looking Ahead

Consultation on these proposals and how they will work in practice closed on 17 May 2013 and we will publish an update once the results of the consultation are published. Much commentary has focused on the concerns and issues highlighted in this article.

Some sceptical commentators have doubted the impact this proposed regime will have in practice as it is argued that UK culture is too wedded to the idea that childcare is a female responsibility. Clearly cultural and social factors will have an impact on the level of uptake but likely the most important driver will be the family’s financial position. For some families, relying on the mother’s income, while the father receives just a statutory parental leave payment, simply may not be viable.

These proposals form part of a wider framework of regulations which the UK Government has published under an umbrella initiative aimed at creating a more flexible and family-friendly workplace culture and at encouraging fathers to be more involved in the traditionally female role of childcare. This, in turn, should encourage better retention of experienced and skilled women in the workplace. Hopefully the issues raised here will be resolved before the proposals are enacted into statute, and BIS’ goal of a “light touch” administrative approach will be achievable.