The government has launched what it is calling a “landmark” review of parental leave and pay, including what the statutory minimum employers should offer.
The review, which the government was urged to commit to in May by a combination of academics, unions and charities, follows sharp criticism from MPs last month that the current system has “fundamental failings”.
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The review will look at statutory leave, or minimum amount that employers must provide by law and which is funded by the government. It will also consider how maternity, paternity and shared parental leave is working, or not working.
The review is part of the government’s ‘Make Work Pay’ plan, announced last year, which is designed to tackle low pay, poor working conditions and poor job security.
The review, said the government, “will gather views from parents, employers and experts across the country and will end with a roadmap for possible reforms”, although no timeframe for this was outlined.
Deputy prime minister Angela Rayner said: “Through our Plan to Make Work Pay, we’re already improving the parental leave system with new day-one rights. This ambitious review will leave no stone unturned as we deliver for working families.”
Business secretary Jonathan Reynolds added: “Campaigners have long called for change, and this government has listened. This review is our chance to reset the system and build something that works for modern families and businesses.”
The review, ministers said, will look at the whole system – from maternity and paternity leave to shared parental leave – to see how it can work better for parents and employers.
At the moment, it added, the system is overly complicated, pointing to the fact that one in three fathers do not take paternity leave because they cannot afford to, and that take-up of shared parental leave remains “very low”.
Under the current system, statutory maternity leave allows most new mothers and birthing parents to take up to 52 weeks off work.
It is paid for up to 39 weeks, with the first six weeks at 90% of that person’s average earnings before tax. The following 33 weeks are then paid at either £187.18 per week or 90% of their average weekly earnings again, whichever is lower.
However, if the new mother is self-employed or earns less than £125 a week they become ineligible for statutory maternity pay.
Statutory paternity leave was introduced in 2003 and allows most new fathers and second parents in the UK to take up to two weeks off work.
Like with maternity leave, those eligible receive £187.18 a week or 90% of their average earnings, whichever is lower, for those two weeks. Again, this does not apply if they are self-employed or earn less than £125 a week.
Shared parental leave was introduced in 2014 and allows parents to share up to 50 weeks of leave and up to 37 weeks of pay after the birth or adoption of a child.
Need for ‘meaningful’ reform
Responding to the announcement, Claire McCartney, policy and practice manager at the Chartered Institute of Personnel and Development (CIPD), said it was keen for the review to be “meaningful”.
She said: “The current system isn’t working, and there needs to be a holistic and thorough review from government that supports better, fairer and fuller employment for working parents.”
The CIPD, in particular, supported the recommendations by the Women and Equalities Committee to increase paternity leave to up to six weeks at or near the full rate of pay, through a phased approach, and to simplify the complicated shared parental leave system.
“The government review should consider lessons learnt from successful international approaches, and the steps it can take to reduce wider cultural and societal barriers to fathers taking more leave,” McCartney added.
“We encourage the government to consult thoroughly with employers, representative bodies and working parents throughout this review to ensure the recommendations are practical, workable and likely to bring about real change,” she said.
Nicola Wallbank, employment partner at law firm Freeths, welcome the government’s admission that take-up of shared parental leave remains very low. “The complexity of the regime (which many employees and employers don’t understand), and the fact that it effectively takes the leave away from the parent on maternity leave contribute to this poor take-up,” she pointed out.
“Under the current regime we have seen many, often larger, employers taking it upon themselves to provide enhanced maternity, paternity, adoption and shared parental entitlements in a bid to support their staff and provide a more attractive array of benefits. Advice is often taken to ensure such policies are fair and non-discriminatory.
“A better and more balanced system would certainly improve the position for many families, particularly on lower incomes. Whilst most people would agree with the idea that giving both parents more time with their families is hugely beneficial, smaller businesses may well be concerned about the burden of extra costs and the pressures on resourcing that this could cause,” Wallbank added.
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