It seems New Labour’s family-friendly agenda is starting to alienate employers.
In a report published last week by law firm Browne Jacobson, a survey of 220 UK company directors found that 82% oppose forthcoming legislation to extend paid maternity leave. Furthermore, a staggering three-quarters (75%) of company directors believe the new law will discourage employers from hiring women of child-bearing age.
This is, however, illegal and discriminatory, as Peter Jones, employment partner at Browne Jacobson, points out. But rather than being a sign of intent, the figures, he says, represent the serious levels of concern that surround the Work and Families Act 2006, which will see paid maternity leave for new mothers increased from the current 26 weeks to 39 weeks from April 2007.
In fact, opposition has been building for some time. The CBI withdrew support for the Bill as it was going through parliament, believing the new legislation and related initiatives, such as the recent flexible working rules, are making increasing demands on employers without providing the requisite support.
But it is not the extra direct costs that irk bosses – these will be minimal, as the government already picks up the tab for 92% of maternity pay for large companies, while smaller employers are eligible to claim back 100% of their costs.
What rankles, according to Richard Wainer, a senior policy adviser at the CBI, is the expectation of an increased administrative burden that comes with a change to complex statutory payments and the headache of having to juggle around staff to cover this extended leave.
“For small businesses in particular, this will be expensive and time-consuming,” he said.
The Department of Trade and Industry (DTI) counters that maternity leave payments made direct from the government would only save employers £1m a year. Costs to HM Revenue and Customs, however, were estimated to reach an expected £75m, with £50m a year ongoing costs. “This was not judged good value for taxpayers,” said a DTI spokesperson.
The DTI also claims it has listened to employers concerns and introduced measures to make their lives easier. These include an extension to the notice period (from 28 days to two months) women on maternity leave must give if they intend to change their return to work date. So-called “keep-in-touch days” will also be allowed, so women on maternity leave can occasionally visit their workplaces without losing any of their entitlements.
Laura Williams, senior researcher at the Work Foundation think-tank, said there is always opposition to far-reaching legislation of this kind. “Employers worry about how well it will bed in and whether they have the resources to manage the transition,” she said.
But with the number of employment tribunals involving pregnant women rising from 1,170 in 2003 to 1,500 in 2005, employers must be cautious about discriminating against a section of the workforce that is increasingly aware if its rights.
For Williams, the forthcoming extension of paid maternity leave and the government’s avowed intention to extend it to a year by 2010 should be seen as a reflection of the changing demographics of the labour force. With roughly 10 million women of childbearing age – one third of the UK workforce – currently gainfully employed, organisations that offer preferential maternity conditions will benefit by attracting quality recruits and increasing staff retention, she says.
“Many organisations already have excellent work-life balance policies and this legislation is simply catching up with the good employers,” said Williams.