Is Your Business Ready for Shared Parental Leave?
The long awaited revolution in family leaves is upon us. Parents expecting babies after 5 April 2015 can now opt to share parental leave. Additional paternity leave is a thing of the past. If your policies do not reflect these and other changes highlighted below, we would be happy to help bring your handbook bang up to date.
How Does Shared Parental Leave Work? The Key Points:
- Mum still has to take two weeks of compulsory, paid maternity leave after the baby is born. No change there.
- As for the remainder of Mum's maternity leave, (up to 50 weeks), Mum can opt out of the maternity leave system altogether and choose instead to take shared parental leave with her husband or partner. If Mum has not yet returned to work, she must serve a curtailment notice at least 8 weeks before she wants her maternity leave to end. Her employer cannot accept short notice.
- Mum and Dad can be, but do not need to be, employed by the same company to share leave.
- As well as Mum's curtailment notice, various other notices and declarations must be given to the employer, or to each set of employers, if the couple are employed by different organisations. The detailed contents of the notices are outside the scope of this article.
- All leave must be taken within one year of the baby's birth.
- Note we use Mum and Dad as shorthand. Civil partners, including same sex partners and adopters and prospective surrogacy parents, can participate in the new regime.
There are numerous qualifying conditions for any employee wanting to take shared parental leave. These include the fact that:
- One of the couple must be eligible for maternity leave/pay, adoption leave/pay, or maternity allowance.
- The employee seeking to take leave has been continuously employed for at least 26 weeks by the end of the 15th week before the expected week of childbirth.
- The partner of the person seeking leave must have been working, (even if self-employed), for at least 26 weeks over the 66 weeks before the baby is due. In addition, the partner must have earned at least an average of £30 per week in the highest earning of the last 66 weeks. This is known as the Employment and Earnings Test.
- The position of each "parent" is viewed separately to determine whether either or both of them can take shared parental leave. It is conceivable that one parent could qualify whilst the other does not.
Flexibility is at the Heart of the System
- Until the period of shared parental leave has actually been booked, employees can change their minds about when leave should start and finish. The leave is not finally booked until the employee serves a Period of Leave Notice giving the employer 8 weeks notice of when leave will begin and end.
- More importantly, Mum and Dad can in theory, each request three blocks of leave. They can take their leave together or separately. Each block can be continuous, (ie the leave, like maternity leave currently, runs between a fixed start and end date), or discontinuous. Discontinuous leave is leave for a set number of weeks with returns to work in between. For example: a block of leave which will run from 1 January 2016 to 1 August 2016, but with returns to work from 8-15 February and 4-11 April 2016.
- The employer must consent to periods of continuous leave that have been requested, but can object to discontinuous leave requests, or seek a compromise solution. However discontinuous leave may actually assist certain employers, particularly those who have busy seasons, where it could be handy to have employees return to work over the busy patch.
How Much of the Leave is Paid?
- A couple sharing parental leave can claim between them up to 37 weeks of shared parental pay. (The first 2 weeks after the birth must be taken as paid maternity leave).
- Employers may choose to enhance shared parental pay as some do maternity leave. Interesting questions will arise as to whether it is discriminatory to enhance maternity pay, for which male employees are not eligible, but not shared parental pay, which both men and women can take.
- Statutory Maternity Pay (SMP) is a tad more generous than shared parental leave pay. In the first 6 weeks of maternity leave, SMP is paid at the higher of the statutory rate, (currently £139.58), and 90% of average weekly earnings. By contrast over the same period, statutory parental leave is paid at the lower of these amounts. (For the rest of the leave period, pay is at the statutory rate). Many mothers are therefore incentivized to remain on maternity leave for the first 6 weeks and then switch into shared parental leave.
So What Should My Business be Doing Now?
- Check your staff handbook includes a shared parental leave policy. Please contact us if you need help drafting one.
- Make sure employees on maternity leave are aware of their rights to curtail their leave and switch into shared parental leave.
- Check your paternity leave policy is up-to-date. With the advent of shared parental leave, additional paternity leave has been abolished.
What Else in my Handbook May Need Fixing?
We would be happy to take a look at your handbook and advise you, but we are finding that for many of our clients, the following areas have not been updated recently:
- Contractual or not-contractual: the most common problem we see in staff handbooks, is a failure to distinguish between those provisions that form part of the employment contract and those that are merely policy or guidance. The distinction is critical: if a provision is contractual, you need employee consent to change it. Further, if the employer does not comply with its own policies, (frequently the case in the handling of disciplinary and ill-health situations), the employer risks exposing itself to breach of contract claims. In nearly all cases, policies should be designated as non-contractual, thereby allowing them to be changed and updated much more easily. Avoid statements in employment contracts along the lines of: "this contract incorporates the staff handbook," or "your contract comprises this employment agreement and the staff handbook."
- Time off for ante-natal appointments: pregnant employees have long enjoyed the right to reasonable paid time off for ante-natal appointments. However now husbands, civil partners, the other parent, and intended surrogacy parents enjoy a right to accompany the pregnant employee on up to two of these visits. From 5 April 2015, adopters attending adoption appointments have similar rights.
- Flexible working:this is no longer the preserve of employees with children. Any employee with 26 weeks' service can now request to work flexibly. The process for dealing with those requests has also changed and should be reflected in your policy. The new rules are backed up by an ACAS1 Code and ACAS Guidance. Your policy should comply. Note employers now have three months to come to a decision.
- Whistle-blowing: workers who are dismissed for blowing the whistle on wrongdoing in their employer's business enjoy a number of statutory protections. It is not uncommon for employees who anticipate being dismissed, but who do not have sufficient length of service (2 years) to claim unfair dismissal, to manufacture whistle-blowing claims. Employers are helped and hindered by recent changes to whistle-blowing laws, which should be reflected in whistle-blowing policies. Among them:
- Whistle-blowing disclosures are only "protected" and only trigger the statutory protections, if, in the worker's reasonable view, they are in the public interest. This important condition should feature in your policy. It can provide a means of defeating whistle-blowing claims based on purely internal grievances.That said, in a judgement delivered only this week in Chesterton Global Ltd v Verman (2015), the Employment Appeal Tribunal ruled that a complaint that the employer was overstating the costs of its London office to drive down bonuses for 100 employees, was found to meet the test. The public interest test according to the EAT is intended to prevent employees complaining about breaches of their individual contracts where the breach is of a personal nature and has no wider public interest implications. In addition, the test is based not on an objective assessment of whether the disclosure is in the public interest, but on the employee's reasonable view that it is.
- Case law has made clear that bald, unsubstantiated allegations are unlikely to be sufficient.
- However many out-of-date policies still state that disclosures must be made in "good faith" or they do not count. This is no longer the law. That said compensation awarded to a whistle-blower can be reduced by up to 25% if they acted in bad faith.
- Holiday pay: following cases such as Williams v BA (2011), Lock v British Gas Trading (2014) and Bear Scotland v Fulton (2014), holiday pay needs to take into account an employee's normal remuneration. This will often involve compensating them for commission that is "intrinsically linked to performance" and certain forms of overtime. Do your holiday/vacation policies comply?
- Data Protection: this is an area of law that is often ignored until a crisis. Imagine that an employee is suspected of serious misconduct - do you have the right to monitor and search their emails? Or maybe you are a US employer involved in an investigation in the US and are required to produce emails and other data relating to your UK employees. Strictly, you are transferring data outside the European Economic Area, which is highly regulated. What do you do? Or possibly your company is the target in an acquisition and the buyer requires production of employee data as part of its due diligence. Many of these issues can be addressed in a detailed and wide-ranging data protection policy included in a company's staff handbook, to which the employees give their consent. Why wait for a crisis if you can be pro-active now?
COMPLIMENTARY EMPLOYMENT LAW UPDATE SEMINAR - SAVE THE DATE
Our employment team runs regular employment update seminars in both London and in the US. Our next UK seminar will be on the 17th of June 2015 at 9am in our London offices and will provide an update in key areas of employment law including TUPE and redundancy.
If you would like a quote to update your handbook, or would be interested in simply purchasing our off-the-shelf handbook that you can roll out in short order, please contact: Henry Clinton-Davis, +(0)20 7786 6137 , Henry.Clinton-Davis@aporter.com.