Work and Families Bill

The government's Work and Families Bill* provides for statutory maternity pay (SMP) to be extended, introduces additional paternity leave, and extends the right to request flexible working to those who have caring responsibilities for adults.

The Bill was introduced on 18 October 2005. The main changes made by the Bill are intended to take effect in April 2007. A great many of these will be made by regulations, which will not be published until next year. The government has also published its response to the February 2005 consultation "Work and Families: Choice and Flexibility" (see Consultation on family-friendly policies)^†.

The key changes announced are as follows:

Note that all of the statutory changes discussed below will apply to adoption in the same way as they do to maternity. EOR will be tracking the Bill during its passage through parliament and reporting on any significant changes.

Maternity pay period

SMP is currently paid for a maximum of 26 weeks. The Bill extends the maximum period that may be prescribed to 52 weeks. The government's goal is one year's maternity pay, which is to be achieved "by the end of the parliament", ie by 2009/10. However, this will be achieved in stages. The intention now is to extend the period of paid leave to 39 weeks for women who are expecting babies on or after 1 April 2007. Similar changes are to be made to statutory adoption pay.

Other changes are being introduced to harmonise the SMP and leave regimes. These will enable SMP to start from the day of the week that maternity leave begins, rather than from the following Sunday. Employers will also be able to pay SMP on a daily basis to align it with a woman's normal pay period under the employer's payment system, which typically covers days of a month rather than an exact number of weeks.

Maternity leave

Under current law, all pregnant employees are entitled to 26 weeks' ordinary maternity leave (OML) regardless of length of service. Women who have completed six months' service with their employer at the 15th week before the week the baby is due also qualify for additional maternity leave (AML), which follows on from OML.

One of the options the government considered in changing the qualifying requirements for statutory maternity leave was to abolish AML and extend OML to 12 months. However, this met with opposition from employers since it would have entailed providing contractual benefits for the full 12 months and keeping the same job open for that period. Instead, the Regulations will change the eligibility rules so that all women who qualify for OML will also qualify for AML. This will preserve the position that during OML, terms and conditions other than those relating to pay continue to apply, whereas only residual contractual rights continue to apply during AML.

Changes are also made to notice periods. The law currently requires women to give 28 days' notice if they wish to return to work early from maternity leave. The consultation revealed that most employers consider that the 28-day notice period is insufficient to allow them either to find alternative duties for an employee covering the mother's work, or to terminate a temporary contract. Accordingly, the government is to lengthen the notice period if mothers decide to return from maternity leave either earlier or later than originally agreed. This can be done by implementing Regulations and does not require primary legislation. The response to the consultation announces that the period of notice for early return is to be extended from 28 days to eight weeks. The two-month notice period will be calculated from the new date of return. Two months' notice will also be required from women who wish to extend their maternity leave if they have further leave to be taken. In such a case, the notice period will be counted from the original return date.

Encouraging communication

The government is proposing two legislative changes to enhance communication and contact between employer and employee during maternity (and paternity) leave periods.

It will be made clear that reasonable contact between employer and employee is permitted at any stage during maternity leave. There is a concern that the current maternity pay regime discourages contact during leave because if a woman does any work under her contract, even for a day, she cannot receive SMP for that week. The Regulatory Impact Assessment** says, in respect of the new provisions, that "the purpose of this measure is to enable employers to initiate contact with women on maternity leave in order, for example, to discuss whether or not her planned date of return to work has changed or is likely to do so, or to discuss any special arrangements to be made to ease her return to work (for example, whether she wishes to request the right to work flexibly)."

The Bill also provides for regulations that specify circumstances in which an employee may work for her employer during a period of maternity (or paternity) leave without bringing the period to an end. This will cover so-called "Keeping in Touch" days. According to the Regulatory Impact Assessment, "the intended effect is to allow employees, if of mutual benefit to, and with the agreement of, both them and the employer, to return to work and be paid to carry out certain activities, such as training or attendance at an annual conference. At the moment, returning to work for as little as one day would result in the loss of statutory pay for the whole week, and termination of the period of leave."

Additional paternity leave

Statutory paternity leave following the birth of a child or its adoption is currently only available for two weeks. The Work and Families Bill introduces a new statutory right to additional paternity leave (APL) and additional paternity pay (APP) for employees during the second six months following the birth of a child. This is primarily intended to allow the mother to return to work and the father (or partner) to take the lead on childcare responsibilities in the first year of the child's life. Although not acknowledged in any of the documents accompanying the new legislation, this new right was undoubtedly influenced by the decision of the European Court of Justice in the Sass case (EOR 139), which could be read as distinguishing between maternity leave intended to ensure the physical recovery of the mother, following the birth, and parental leave.

According to the government, the consultation showed that there was a broad consensus that the first six months of the maternity leave period should be reserved for the mother. "If leave could be taken at any point during maternity leave there is a risk that the mother could return to work shortly after giving birth and endanger her health." Accordingly, the response to the consultation says: "We will ensure that this first half of the mother's maternity leave will be reserved for the mother alone, to ensure that the health and safety of mother and child is not affected and that we conform to the World Health Organisation's guidelines on breastfeeding within the first six months of the child's life."

Therefore, APL and APP will apply only during the second six months of maternity leave. The right will be conditioned on other eligibility criteria, which will be laid down in regulations. In particular, an employed father's entitlement will be dependent on the mother returning to work. The regulations will deal with what is to be treated as constituting her return.

There will be a maximum entitlement of 26 weeks' leave, which will have to be taken in a single block, and the regulations will provide that all the paternity leave must be taken before the end of the period of 12 months beginning with the birth. Whether the paternity leave will be paid will depend on whether the mother was entitled to SMP or maternity allowance for the relevant period.

There will be further consultation on the details of the scheme before the regulations are introduced, including any other eligibility conditions such as a service requirement with the employer prior to starting APL, and the notice that will need to be given to the employer.

According to the Regulatory Impact Assessment, if there is a 26 weeks' service requirement for eligibility, it is estimated that 442,000 fathers would be eligible for APL in 2007-8. Based on an estimate of mothers whose current behaviour indicates that they wish to return to work at the earliest opportunity, and an estimate of fathers whose current behaviour indicates that they have a strong desire to take part in the upbringing of their child in its first year, the Department of Trade and Industry estimates that 10,000 to 16,000 will take up the new right in its first year.

Flexible working

The right to request flexible working currently applies to parents of children under the age of six and of disabled children under age 18. The Bill extends the right to request flexible working by allowing applications to be made by persons who have caring responsibilities for adults. This change will take effect from April 2007.

However, the government has decided not to extend the right to request flexible working to parents of older children.

According to the response to the consultation, nearly six million people care for a sick, disabled or elderly person, and around 1.8 million people are likely to be in work when their caring role begins. The detailed definition of a carer to be covered by the law will be set out in regulations, on which there will be consultations in 2006. The possible options for defining a "carer" include: caring for a partner only; caring for an immediate relative (either a partner, parent/parent in- law or an adult child); caring for an immediate relative or anyone living at the same address; caring for a near relative or anyone living at the same address; caring for any relative or friend; and caring for a disabled dependant.

Bank holidays

The Work and Families Bill is also being used as a vehicle to give power to the secretary of state to make regulations "conferring on workers the right … to a prescribed amount of annual leave". This would enable the government to meet the commitment in its 2005 election manifesto to extend the entitlement under the working time Regulations to four weeks' annual leave, by making it additional to bank and public holidays (or, to put it another way, preventing employers from including bank/public holidays in the four weeks).

According to the explanatory note that accompanies the Bill, "a full and extensive consultation will be undertaken with stakeholders and a more detailed Regulatory Impact Assessment will be produced before any regulations are made".

A "week's pay"

The Bill will also enable the secretary of state to increase, on one occasion only, the maximum amount of a "week's pay" that is used for the calculation of statutory payments, such as a redundancy payment and the unfair dismissal basic award. The statutory maximum is currently £280.

Statutory redundancy pay and the basic award are now age-related. The new power is seen as necessary if the government decides, as a result of age discrimination legislation, to remove the age-banding and equalise the maximum amount of a "week's pay" regardless of age.

*Changes to Sex Discrimination Legislation in Great Britain, www.womenandequalityunit.gov.uk/legislation/

^†www.dti.gov.uk/workandfamilies.htm

**Work and Families: Choice and Flexibility. Regulatory Impact Assessments (PDF format, 637K)