Employers
tot up leave costs
Alarm bells
are ringing over the cost of implementing the Government’s wide-ranging
proposals to improve the rights of working parents.
According
to the Green Paper, it will cost employers £1.9m a week for cover if one in
five working fathers reduces their hours by 25 per cent, although no price tag
is given if all parents choose to work part time indefinitely.
The CBI
says it is opposed to the right of employees to return to work on a part-time
basis, citing lack of flexibility.
Also, the
changes will cost employers £40m for eight weeks extra statutory leave, plus
£18m for each additional week of cover for paid leave and £9m for each
additional week of cover for unpaid maternity leave.
The
two-week paternity leave proposal will cost employees £18m plus £10m for each 1
per cent of men who opt to take up their partners’ unpaid maternity leave
allowance.
John
Adsett, head of project development of Basildon Thurrock General Hospitals
Trust, said, “If the figures are correct, this is not acceptable to employers.”
For the
chemicals sector, Garry Bothe, HR manager of Bayer, said, “From a cost point of
view it is not financially viable to opt to reduce your hours if you are a
female director or manager.”
The
Government argues its Green Paper proposals could save employers up to £30m in
recruitment and retention costs overall, if only 10 per cent per more mothers
return to work. Trade and Industry Secretary Stephen Byers was adamant that
employers would have to bite the bullet, saying “Retaining the status quo is
not an option – things have got to change”.
Price tag
Employer
costs according to the Green Paper:
·
£8m or £200 per employee one-off
implementation cost of proposals
·
£5m for each additional £10 a week statutory
maternity pay
·
£18m for each additional week of cover
needed for maternity leave
·
£9m For each additional week of cover
for unpaid maternity leave
·
£18m paternity leave
·
£1.9m for each week of cover if one in
five working fathers reduces their hours by 25 per cent
Should firms bear the brunt?
The
maternity pay proposals include an
increase in paid leave for mothers from 18 weeks to 26 weeks. Unpaid maternity
leave could increase to six months, and there could also be an increase in the
flat rate of maternity, from £60.20 to a possible £100.
Both
parents could also equally share any increase on existing unpaid maternity
leave.
It has
sparked a debate over whether employers should bear the costs of extended
maternity pay. David Yeandle, deputy director of employment policy for
Engineering Employers’ Federation, said, “The Government has two options: to
increase the statutory maternity pay of £60 which is primarily a cost to be
borne by the state, or pay the same amount but for a longer period of time.
“About 93
per cent of the statutory maternity pay is reimbursed, but this is not a cost
that employers should have to bear. If we are acting as a agent of the state,
then we should get full reimbursement of what we pay out.”
£100 per
week paternity pay-out
Fathers
could be given two weeks’ paid paternity leave at the same new rate as mothers.
It is
believed they will be paid about £100 a week during their paternity leave.
If the
Green Paper becomes law next year, fathers will also have the right to work
reduced hours for up to a year after the birth, if they return to work early.
Significantly,
they will also be able to work reduced hours for as long as they like once the
maternity period ends.
Helen
Froud, director of corporate services at Worcestershire County Council, echoed
the views of many organisations when she said, “Men have been the poorer
relation in parenthood so it is about time things changed for the good.
Business will just have to get on with it.”
Many large
corporations appear unperturbed by the proposals. David Glynn, HR director of
Coca-Cola, claimed it already has a similar paternity leave structure and does
not think that extending it would cost the company a significant amount.
Although
certain sectors with a high number of men in the workforce feared the
implications. Don Ward, chief executive of the Construction Industry Board,
said, “Construction employers are probably not ready for two weeks’ paid
maternity leave, but they will just have to adapt.”
Public-sector
HR directors were concerned by the effects of paternity leave on staffing
levels. Lew Swift, head of HR at Walton Centre for Neurology and Neurosurgery,
said, “This is already an industry heavily hit by maternity leave – if men are
given equal rights as well, the NHS could be in trouble.”
Feedback
Mike
Emmott, employee
relations adviser at the CIPD
·
“Entitlement
to paternity leave is a welcome move in the light of consistent evidence that
family-friendly policies and flexible working practices benefit both employers
and employees. Benefits include increases through lower absence, turnover and
increased loyalty.”
David
Yeandle, deputy
director of employment policy for Engineering Employers’ Federation
·
“The
option of giving both parents the right to work reduced hours after maternity
leave raises enormous problems for employers. The idea of giving mothers and
fathers a statutory right to return to work on a part-time basis is an area of
concern as we believe this will have a detrimental effect on business
efficiency and competitiveness.”
Helen
Froud, director of
corporate services at Worcestershire County Council
·
“The
increase in the flat rate of maternity pay may cause some turbulence, but it’s
not really a huge amount. If you’re on a reasonable salary, it won’t make much
difference.”
Don Ward, chief executive for the
Construction Industry Board
·
“This
Green Paper could be very helpful in construction’s campaign to bring more
women into the industry. It will give us a level playing field with other
industries and make us more competitive for good employees.”
Elaine
Aaron, partner of
legal firm Eversheds
·
“The
only new, ground-breaking part is the rights for fathers to work reduced hours
until the end of maternity leave. There will be an administrative and
logistical strain for employers if fathers and mothers decide to work reduced
hours after the maternity period ends.”
John
Adsett, head of
project development at Basildon Thurrock General’s Hospital Trust
·
“The
NHS isn’t really ready for introducing two weeks’ paid paternity leave at the
moment but if it comes in as a statutory right, we’ll have no choice. The
option for giving parents the rights to work reduced hours will only work if
they take reduced pay.”
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Joanna
Foster, chairwoman
of the Work-Life Forum at the Industrial Society
·
“Stephen
Byers has got the balance of work-life exactly right. By offering men paid
paternity leave, the Government is legitimising the role of the father.”
