The Work and Families Act will extend flexible working rights to carers of adults, extend parental employment rights, and make the administration of maternity leave and pay easier, all the while enhancing productivity for business.
With increasing competitive pressure from the Far East, businesses need to maximise workplace productivity. While we can’t compete with Asia in wage terms, and would not want to, we can ensure our workplaces are innovative and high performing.
We can do this by making sure everyone has a fair chance of getting into work, and staying there if they decide to start a family, or have ongoing commitments to care for a loved one. Everyone should be able to make a contribution, which is valued on an equal basis. It’s vital that our recruitment pool retains the most talented employees.
Research shows that increasing numbers of new fathers are taking time out to care for their children, that there is an unprecedented take up of flexible working, and now in most families, both parents are working. So the family set-up is changing, and it is to the employer’s advantage to recognise and compensate for this.
Supporting working families
The Work and Families Act will enable parents and carers to continue making their contribution at work when there are changes at home. Maternity pay is being extended from six to nine months for women whose due date is 1 April 2007 or after, with the goal of extending this to a year’s paid leave by the end of this Parliament. Adoption pay is also being extended.
The Act supports those who wish to play a fuller role as fathers, and achieve a balance between work and family responsibilities. It proposes that, by the end of this Parliament, fathers will be able to take up to six months additional paternity leave in the second half of the baby’s first year, if the mother is not taking her second six months and has returned to work. Fathers may also benefit from additional statutory paternity pay if part of the mother’s statutory maternity pay or maternity allowance has not been used.
With an ageing population and growing elder care responsibility, the role of carers in this country is becoming more important. Of the 6.5 million people with caring responsibilities in this country, around 3.5 million have jobs. The Act will extend the right to request flexible working from next April, so that it covers carers of adults, as well as parents of young and disabled children.
Flexible working is invaluable to carers struggling to juggle work and care. Employers tell us that they get business benefits from employees in terms of lower absenteeism, and lower recruitment costs through flexible working. They therefore get additional loyalty from their employees.
Carers on the increase
Charity Carers UK tells us that the number of carers is set to grow to nine million in the next 30 years, and that the economy needs a further 2.5 million people in the workforce over the next eight years. As such, employers need to recognise the need to offer employees the ability to balance work and family life.
The Work and Families Act sets minimum standards, but I know that the best employers always go further than measures set out in legislation. Good employers recognise the benefits of enabling employees to balance work and home responsibilities, saving time and money on recruitment and training, while ensuring they retain the staff with the skills and experience they need.
Independent research carried out for the government shows that existing flexible working laws are working. As minister for employment relations, I believe a key reason for this is that we’ve worked closely with business when developing legislation.
When we consulted on the Act, we considered how to help business manage the new changes in line with the government’s ‘better regulation agenda’. We set up an external advisory group, made up of people with HR expertise, to examine how to ease compliance for employers.
This means the Act is good news for HR professionals as well as employees. We’re making it easier to manage leave and pay, as well as extending entitlements for employees. New measures to help employers manage administration, and plan ahead with greater certainty, will also be introduced from next April.
It will be easier for employers and parents to stay in touch during maternity leave. Statutory Maternity Pay (SMP) will start on any day so it is aligned with maternity leave, and employers will be able to use a daily rate of SMP, if that will ease payroll administration. To give greater certainty to employers, there will be increased notice periods for mothers who wish to return to work earlier, or later, than originally agreed.
This government is pro-business and pro-families, aims that are not mutually exclusive, but mutually supportive. As a consequence of existing flexible working practices, employers’ organisations have reported less absenteeism, a rise in staff retention rates, motivation, improved morale, and better customer service, all of which should continue to grow as further measures come in.
Bristol-Myers Squibb case study
When it comes to flexible working, pharmaceutical manufacturer Bristol-Myers Squibb is one step ahead of the Work and Families Act. Flexible working has already been extended to all 1,900 employees, including carers of children and adults.
“We believe that all staff should have the option to work flexibly, not just parents. We value our staff and want to keep them,” says Sara Long, compensation and benefits manager.
Bristol-Myers Squibb introduced working hours to suit employees’ lifestyles more than three years ago, and has benefited from staff loyalty and performance as a result. Flexible working takes many forms.
For a permanent change to their working pattern, employees can submit a business-based request form, which focuses on the effect on the business, rather than the reasons the employee wishes to work differently.
BMS also offers informal flexible working within its different sites in the UK. Some offer flexible start and finish times and summer hours, whereby employees can work additional hours during the week, to leave at lunchtime on a Friday.
The company also offers paid adoption leave, a childcare and eldercare advice and search service, and a wide range of work-life resources available online. It also offers a career break scheme.
Employee feedback to the company’s approach to work and business culture is excellent. Having achieved a good work-life balance, staff are happy to stay with the company, which boosts business.
Long is one such employee. She requested to work a three-day week after the birth of her first child. “I was working full-time and wanted to go part-time because of my childcare commitments, so it was great to be able to work flexibly,” she says.
New measures to simplify administration
Notice periods for employees who change their return dates from maternity or adoption leave will be extended, from 28 days to two months.
Optional ‘keeping in touch’ days will enable women to come into work for a few days during maternity leave. Employers will be able to manage maternity leave more effectively, and communication will be improved.
Employers will be able to calculate statutory maternity pay (SMP) and other payments at a daily rate – where this will help ease payroll administration – allowing employers to align the payments with their normal payroll arrangements.
SMP will be able to start on any day. This means leave and pay can commence on the same day, easing administration for employers.
HM Revenue and Customs is eliminating the need for employers to calculate SMP manually, by providing free electronic calculators and a free telephone helpline calculation service.
The Work and Families package will be supported by online guidance for employers and employees.