25 August 2011 #Employment
Employmentbuddy launched a survey for its members covering the Government`s proposals to change employment law with the aim of encouraging a more flexible and family friendly approach at work, as set out in the Department for Business, Innovation and Skills (BIS) Consultation on Modern Workplaces. The results proved very interesting and enabled us to gauge your opinion and feed this into the Confederation of British Industry (CBI) Consultation Working Group, which Clarkslegal was invited to join. The CBI has now published its response to the Consultation with the aim of influencing policymaking, to gain the best deal for employers.
We would like to give a big thank you to everyone who gave their time to complete the survey and giving Clarkslegal a hand in lobbying the government! The consultation has now closed, with a response from the Government expected in November 2011.
The Government`s proposals and the response to the proposals from both Buddy`s survey (from employer "Respondents" shown in blue) and Clarkslegal/CBI (shown in italics), are set out below.
Flexible Parental Leave
Developing the principle behind Additional Paternity Leave, the proposal is to allow parents to share leave in the first year following birth or placement for adoption of the child as follows:
References to mother and father are equally applicable to partners in a same-sex relationship.
The net effect, in cost terms, is that the new regime would result in an additional 4 weeks` statutory paternity pay at the flat rate, currently £128.73.
The assumption will be that the employees would take their leave entitlement in one chunk and the employer would not be able to refuse a leave request. However, the Government proposes to allow employers and employees to agree for the leave to be taken on more flexible terms e.g. the mother and father could take the leave in several smaller chunks, effectively taking it in turns to return to work/care for the child; or it could be possible to agree for the mother or father to work shorter weeks.
Only 16.7% of Respondents surveyed have received requests from fathers to take Additional Paternity Leave under the current system. Of those, none found that the requests caused significant disruption to their business/workforce planning. Interestingly, and perhaps because of the aforesaid low percentage, half of Respondents believe they would not receive many applications from fathers to take Parental Leave under the proposed new regime and so practically it would have little impact. Presumably, the practical impact will depend on the type of employer and whether they offer enhanced pay. For example, a leading car manufacturer in the CBI Working Group stated they had a 95% male workforce and offer enhanced pay and so would expect a big impact.
More than half (66.7%) of Respondents offer leave and/or pay for new mothers and/or fathers which go beyond the existing statutory requirements and the same percentage, "perhaps" support the Government`s proposal to allow fathers to share weeks 19-52 of what is currently the mother`s maternity leave.
The Government intends to use a self-certification model similar to that for Additional Paternity Leave. Half of Respondents stated they would not be happy for employees to self-certify. This is an interesting statistic. A leading retailer commented in the Working Group that self-certification had worked well with the APL, but that this proposed regime is much more complex and involves bigger benefits. Unsurprisingly, all Respondents would want employees to confirm their intentions as regards the taking of Parental leave before the expected week of childbirth.
The aim is to introduce the new system in April 2015, subject to affordability issues. Respondents foresee the proposed new regime to be more complex and one which would require far more administration and review. Concerns relate to monitoring the pay element, liaising with the other parent`s employer and receiving adequate notice so necessary cover adjustments could be made.
Sharing parental leave is right in principle, but not enough account has been taken in the consultation of what this means in practice (as reflected in the survey results). Further, the CBI does not consider it necessary or attractive at a time of economic uncertainty to alter the underlying entitlement by the additional 4 weeks paid leave, since the current arrangements are already very generous.
Unpaid Parental Leave
The current right to up to 13 weeks unpaid leave to be taken at anytime up to the child`s 5th birthday to care for the child, will be extended to 18 weeks. This unpaid Parental Leave could be taken from the child`s first birthday. The Government sought opinion on extending the point until which leave can be taken to either the child`s 8th, 12th, 16th or 18th birthday. More than half (66.7%) of Respondents do not currently extend the right to take unpaid Parental leave so that parents with children over 5 years old may take such leave and all consider that 5 years should remain the statutory cut off.
The plan is for the current requirements of a year`s continuous service to be removed so any employee (subject to meeting other eligibility requirements) could take unpaid Parental Leave after the child`s first birthday. The Respondents` were divided as to whether they supported this plan - a third said yes, a third said no and a third said perhaps.
The Government plans to merge the existing entitlement to unpaid parental leave with the proposed new right to shared parental leave (detailed above) to create one right of parental leave.
Clarkslegal put it to the CBI working group that the two types of leave, the current unpaid parental leave and the new right to shared parental leave, are conceptually different and should not be combined because:
In view of the different eligibility requirements to be entitled to take leave and the issues with entitlement to pay, Clarkslegal`s view is that it would cause confusion amongst employees to label both types of leave as parental leave. Instead, our preference is to maintain the existing parental leave system as "Unpaid Parental Leave" or something similar and call the new right to shared leave as "First Year Leave" or something similar. CBI published our view on this issue in their response to the Consultation.
Time off to attend ante-natal appointments
The proposal is for the father to take unpaid reasonable time off to attend two ante-natal appointments. The survey showed that currently 66.7% of Respondents allow fathers paid time off to attend ante-natal appointments on the basis that they make the time up and 16.7%, on the basis that they take this as holiday. Clearly, employers already have their own individual arrangements and so it seems unnecessary and undesirable to introduce further legislation to constrain this.
The proposal is to extend the right to request flexible working to all employees. Half of Respondents already extend the statutory right to request flexible working in relation to its staff. 33.3% have received requests for flexible working from non-parents in the past. Employers clearly already recognise that, when properly balanced with the needs of the business, granting requests for flexible working enables staff to have a good work-life balance and contributes to better retention of key personnel. The proposal is therefore welcomed, provided proper support is put in place for employers.
It is proposed to replace the current statutory procedure which employers must follow on receipt of a flexible working request with a requirement simply that employers consider any request "reasonably". There would then be a statutory Code of Practice to give guidance on what is a "reasonable" procedure. Respondents were split 50:50 as to whether they do or do not support this proposal. Most Respondents found the current statutory procedure does not cause their business difficulties (only 16.7% found it did). This latter finding probably partly explains why Respondents are split as to the need to change what is, for most, already working for them. On the one hand, departing from the current over-prescriptive regime is welcomed, but also, employers may be concerned that a Code of Practice will not make clear what a "reasonable process" is or know how to prioritise competing requests to give them sufficient confidence to make decisions. Any Code of Practice would need to provide such clarity, without being prescriptive or restrictive.
Working Time Regulations - Holiday and Sick Pay
Changes are required to the UK Working Time Regulations (WTR) to bring them into line with a series of judgements made by the Court of Justice of the European Union (CJEU, previously ECJ) relating to the interaction between annual leave and sickness absence.
The proposal is for amendment to allow a) the carry-over of holiday where a worker has been unable to take the leave owing to sickness and it has not been possible to re-schedule that leave in the current leave year; and b) a worker who falls sick during a period of scheduled annual leave to reschedule it, including carrying it over into the subsequent leave year if it is not possible to reschedule it in the current year. The proposal is to limit the rescheduling and/or carry-over of leave in these situations to the 20 days` European entitlement, excluding the 8 days` UK additional entitlement.
Clearly, there is a need to make changes to prevent the potential for cases to be brought to tribunal against employers for failing to fulfil their responsibilities, despite being in compliance with the WTR. The limit to 20 days is clearly welcomed by employers.
The above proposal is subject to the employer being able to insist a) that leave it taken in the current leave year if there is an opportunity to do so; b) that leave untaken owing to sickness is carried over to the following leave year if there are good business reasons for doing so.
All Respondents agreed that employees should be required to follow the same sickness reporting and certifying requirement when sick during annual leave as they would otherwise. 20% have received requests from employees seeking to re-designate part of their holiday entitlement as sick leave. 40% have had employees who they suspect have abused the right to re-designate holiday as sickness. Respondents stated their policy is that holiday is accrued as if employee is in work and holidays would not be re-designated as sick leave unless employees had medical proof of sickness.
The Government also sought ideas on other ways in which flexibility could be inserted into the annual leave obligations in the WTR (while complying with the Working Time Directive), such as enabling employers to "buy out` the additional 8 days leave conferred by the WTR, which is not required by the European Directive. The CBI strongly supports such a proposal which would allow employers to increase their output and employees to increase their earnings where demand is sufficient to do so.
Equal Pay Audits
The proposal is for tribunals to be able to order employers who lose equal pay/sex discrimination claims (non-contractual pay matters) to conduct a pay audit and publish the results internally. The consultation sought views on whether certain types of employers (e.g. less than 50 employees) should be exempt or whether it should be a matter of the tribunal`s discretion as to whether or not it is appropriate in a particular case to order an audit to be conducted.
The majority of Respondents conduct pay audits (83.3%) and those who said no, unsurprisingly, did not think tribunals should use their discretion to order pay audits in appropriate cases. The majority (83.3%) considered there should be an exemption for small or micro-employers. 66.7% did not agree with the proposal that pay audits should be published.
The CBI considers that such orders will not narrow the wider gender pay gap as it goes nowhere in tackling the underlying educational and cultural causes at the heart of the issue. Further, it seems compulsory pay audits off the back of one lost case is rather harsh. Rather, a more proportionate approach should be adopted whereby employers found guilty of pay discrimination on the grounds of gender should complete the GEO`s forthcoming gender equality reporting framework and report internally on aspects of their overall gender balance, including action they plan to take to address imbalances, before any further action is triggered.
Buddy will report on the Government`s response when this is published.