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Employment Question of the Month: How will the new system of Shared Parental Leave affect my business?

Posted on Sep 09, 2014 by Hannah Roche  | Tags: parental leave, maternity leave, paternity leave, shared parental leave, employment law  | 0 Comments

As traditional gender roles continue to blur and society’s need for greater flexibility in the workplace increases, the laws governing employment need to change to keep up.  Recognising this, the Coalition Government has therefore come good on the 2010 manifesto promises to introduce a more flexible system for working parents to take leave on the birth or adoption of a child. 
While new mums have had the right to transfer some of their maternity leave to their child’s father for some time, it has proved unpopular with less than 1% of eligible employees taking advantage of it.  It is thought that the reasons for this are partly financial, partly cultural and partly because the system is inflexible.  So, from 1 December 2014 a new system of Shared Parental leave will be introduced, enabling eligible mothers, fathers, partners and adopters to choose how to share time off work after their child is born or placed for adoption.
The option to use Shared Parental Leave will apply for parents who meet the eligibility criteria, when a baby is due to be born on or after 5 April 2015 or for children placed for adoption on or after that date. This means that employers could start to receive notice of eligibility and notice of intention to take Shared Parental leave early in the New Year.
Current position
Prior to getting into the detail of  Shared Parental Leave, it’s important to set out the rights that parents are currently entitled to because, for the most part, such rights will remain and run in parallel to the Shared Parental Leave scheme.  Currently, statutory parental rights are broadly made up of:
·         Maternity rights – new mums have the right to paid leave to attend antenatal appointments, 52 weeks’ Maternity Leave (39 weeks paid and 13 weeks unpaid).  Statutory Maternity Pay is paid at 90% of average earnings for the first 6 weeks and at a flat rate (currently £138.18) for the remaining 33 weeks.  Those who don’t qualify for SMP may be eligible for Maternity Allowance at the flat rate for the 39 week period.
·         Paternity rights – new dads (including the partner of the mother) have the right to two weeks’ of Ordinary Paternity Leave with Ordinary Statutory Paternity Pay at the flat rate.  If the mum has returned to work without using her full Maternity Leave entitlement, Additional Paternity Leave may be available (if the employee is eligible) for up to 26 weeks with Additional Paternity Pay at the flat rate during the mother’s unclaimed SMP period. 
·         Adoption rights – these are broadly the same as Maternity Rights save for the right to paid antenatal appointments and save that there is no enhanced pay for the first six weeks after a child is placed for adoption.
·         Unpaid Parental Leave – this is the right, that all employees with at least one year’s service have, to 18 weeks’ unpaid Parental Leave per child.  This can be taken between the child’s birth and their fifth birthday or their 18th birthday if the child is disabled.  No more than 4 weeks can be taken in any one year and leave must be taken in one week blocks.
The new Shared Parental Leave scheme – key points:
Shared Parental Leave is designed to give parents more flexibility in the case of their new born/newly placed child. Parents will be able to share a “pot” of leave and can decide to be off work at the same time or take it in turns to have periods of leave to look after the child.
·         Mothers will still be entitled to Maternity Leave and Pay as above or Maternity Allowance.
·         If they wish, eligible mothers can end their Maternity Leave early and, with the father, or her partner, can opt for shared Parental Leave instead of Maternity Leave.  If both mother and father/partner qualify, they can decide between them how they will split the Shared Parental Leave and pay entitlement.
·         Fathers/partners will still be entitled to Paternity Leave of two weeks.
·         Adopters will have the same rights as other parents in relation to Shared Parental Leave (as will eligible surrogate parents).
·         To qualify mothers must be entitled to Maternity or Adoption Rights (as set out above) and must share the main responsibility for caring for the child with the child’s father or the mother’s partner. In addition, they must have at least 26 weeks’ service with the same employer at the end of the 15th week before the expected week of childbirth (or week in which the adopter is notified of a match for adoption) and still be employed in the first week that Shared Parental Leave is to be taken.
·         The other parent has to have worked for 26 weeks in the 66 weeks leading up to the due date and have earned above the Maternity Allowance threshold (£30 per week) in at least 13 of the 66 weeks. 
·         To qualify for Shared Parental Pay the parent must, as well as passing the tests above, have earned an average salary of the lower earnings limit or more for the 8 weeks prior to the 15th week before the expected week of childbirth/placement for adoption. 
·         Shared Parental Leave may be taken at any time within the period which begins on the date the child is born or the date of the placement and ends 52 weeks after that date. Leave must be taken in complete weeks and may be taken in either a continuous period or in a discontinuous period (i.e. a pattern of leave and work, leave and work).
·         The employer cannot lawfully refuse a request for a continuous period of Shared Parental Leave but it can refuse or amend a request for a discontinuous period.
·         Eligible parents can decide to take Shared Parental Leave at any time provided that there is some untaken Maternity Leave to share.
Notification requirements
Employees wishing to take Shared Parental Leave must notify their employer of their entitlement and must “book” the leave they wish to take:
·         Employees must give at least 8 weeks’ notice of the Shared Parental Leave they wish to take.
·         Each eligible employee can give their employer up to three separate notices.
·         Each notice can be for a continuous block of leave or a pattern of discontinuous leave.
·         Each employee who wishes to take Shared Parental Leave must give their employer a notice of entitlement at least 8 weeks before the leave is due to start setting out how much leave is available, how much they are entitled to take, how much the parent is intending to take and how they expect to take it. 
Practical considerations/tips
·         Employers should develop a policy that sets out the rules and procedure for applying for and taking Shared Parental Leave. This may involve consulting with staff.
·         Employers should have informal discussions with staff who wish to take Shared Parental Leave early on to explain the options to the employee and discuss when Shared Parental Leave will be taken, and whether the employee’s preference is for it to be continuous or discontinuous.
·         Once a notification of leave is received by the employer it should consider whether it’s for one continuous block or discontinuous blocks, the cover that will be required in the employee’s absence, whether it would be helpful to have an early discussion with the employee and whether any modification to the leave request is necessary.
·         A request for continuous leave cannot be refused but the employer and employee may seek to agree modifications if they wish.
·         A request for discontinuous leave can be rejected.
Risks and thoughts
While employees are likely to welcome the introduction of Shared Parental Leave, it is likely to cause some difficulties for employers in relation to covering workloads and dealing with the administration of the leave.  They are also going to have to avoid some legal pitfalls: for example, employers will have to ensure that requests made by men and women are treated the same in order to avoid allegations of discrimination. They also have to ensure that both parents can return to the same jobs if they have taken less than 26 weeks of combined leave and ensure parental leave pay structures are correctly implemented.  Most importantly employers will have to get used to employees taking multiple periods of leave during their child’s first year.
If Shared Parental Leave proves popular, this will mean quite a significant change to the workplace and the start of more fathers taking time off to care for babies. 
If you would like to learn more about Shared Parental leave or have your family friendly rights policy updated to include it, please do get in touch
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