Shared Parental Leave - are you ready?
The new flexible system of shared parental leave applies from Easter Sunday. Parents of children due or placed for adoption on or after 5th April 2015 are now entitled to opt into the new system if they are both eligible to do so. Maternity leave and pay will remain the default system, and fathers will still be able to take 2 weeks paternity leave but additional paternity leave will be abolished.
How does the new regime work?
A mother must take the first 2 weeks after birth as maternity leave (or 4 weeks if she works in a factory) but after this she can bring her maternity leave to an end and share up to 50 weeks of shared parental leave (SPL) and 37 weeks of shared parental pay with her partner. The legislation aims to give parents greater flexibility in how they balance work and family commitments, whilst encouraging fathers to play a greater caring role during a child's first year.
Notification and eligibility
In order to qualify for SPL, both parents need to meet certain eligibility criteria. If one parent does not satisfy the relevant requirements, neither parent will be able to take SPL. Parents also need to submit three separate forms:
- a notice that they are entitled to and intend to take SPL
- a notice from the mother curtailing her maternity leave
- a notice setting out the specific period(s) of leave which the employee would like to take. The forms must be submitted at least 8 weeks before SPL is proposed to commence.
The Government initially stated that it would prepare draft forms for employers to use, but to date, none have been published. Given the complex process, the forms are likely to play a key part in ensuring that employers and employees both understand the process and satisfy the legal requirements. Employers will therefore need to ensure that these are well-drafted and request all of the necessary information.
Discontinuous periods of leave
One of the most significant changes introduced by the new system is 'discontinuous' periods of leave. A mother or father may ask to take one month's SPL, followed by one month at work, followed by another month on SPL and so on. Whilst employers can refuse such requests, employees could use their right to vary their leave by submitting three separate single blocks leave for one month at a time, which because it involves a continuous block an employer cannot refuse.
Whilst this is likely to cause practical difficulties for an employer in arranging cover, they may well find that taking separate blocks of leave is as equally unattractive to employees, given the challenges they will face in arranging suitable childcare. This may lead to shorter leave periods becoming the norm, interspersed by work, which may ultimately be beneficial to employers, if they no longer need to recruit and pay for long periods of maternity cover.
Another factor to consider when refusing a request for discontinuous leave is the risk of discrimination. Employers should provide managers with guidance on factors to take into account when refusing a request. Issues similar to the statutory grounds for refusing a flexible working request should be considered to provide objective criteria to base decisions upon.
Another issue for employers is whether they are going to offer enhanced shared parental pay (SPP) and if so, on what terms. Recent figures suggest that many employers are choosing to offer enhanced pay, not purely for legal reasons but rather to be seen as an employer of choice. If enhanced SPP becomes the norm for large employers, this could have a significant impact on take up of SPL.
Whilst the Government guidance states that there is no obligation on employers to pay enhanced SPP, if an employer does not there is a low risk that this could amount to indirect sex discrimination. As such, employers who provide enhanced maternity pay but not enhanced SPP should document why this decision has been taken. Whilst the cost of implementation can be a factor, it should not be the only reason why enhanced pay was not offered, and additional reasons beyond cost should be considered when considering justification.
For any employer worried about receiving a deluge of SPL requests, the Government estimates that between 2-8% of those eligible to do so will ask for SPL. Take-up rates in any organisation will inevitably depend on whether enhanced pay has been offered, and the overall culture and approach to flexibility. In addition, evidence from other countries suggests that men are more likely to take time off if there is a period of leave specially targeted at them, a concept which was rejected from the SPL regime during consultation. It may be that SPL is mainly used by women as a flexible form of leave rather than being shared with their husband or partner.
In its initial consultation, the Government stated that it wanted the new system to be "simple to use and to understand". However, in our experience, the system is anything but simple. Employers should ensure that they not only spend time familiarising themselves with the new regime and training managers but also focus on the need to have a well-drafted policy and forms in place.
This article first appeared in Law-Now, CMS CameronMcKenna's free online information service, and has been reproduced with theirpermission. For more information about Law-Now, click here.