News and Updates

Sharing the burden...

The Children and Families Act 2014 (“CFA 2014”) received Royal Assent on 13 March 2014. The Act will implement the measures that were set out in the government's response to the Consultation on Modern Workplaces, published on 13 November 2012. 
 
The most substantial change to family orientated rights that the CFA 2014 will introduce is a new system of shared parental leave and pay.  This is not to be confused with the existing systems of rights related to having children, which currently include the following:
 
(a) Maternity leave and pay: up to 52 weeks of leave can be taken with the earliest commencement date being the beginning of the 11th week before the expected week of childbirth.  Statutory maternity pay is available for 39 weeks in total, the first 6 weeks at the “earnings related rate” which is 90% of normal weekly earnings; and the remaining 33 weeks at the statutory “prescribed” rate.
 
(b) Adoption leave and pay: broadly similar to maternity leave and pay rights save that it does not apply to all adoptions and adopters are paid statutory adoption pay at the prescribed rate for the whole of their 39 week pay period, they do not receive 90% of normal weekly earnings for the first 6 weeks as natural mothers do.
 
(c) Parental leave: An employee with one year of continuous service who has or expects to have responsibility for a child is entitled to be absent from work on unpaid parental leave for the purposes of caring for the child.  The leave is taken (i) before the child’s 5th birthday or (ii) the 5th anniversary of their adoption or (iii) if the child is disabled, before their 18th birthday.  The maximum amount of leave is 18 weeks that can be taken in blocks of at least one week.  No more than 4 weeks can be taken in any year.
 
(d) Paternity leave and pay: There are 2 types.  Ordinary paternity leave: a qualifying employee who has fulfilled statutory notification requirements can take either one week or 2 consecutive weeks leave during the period commencing with the child’s birth or adoption placement and ending 56 days later.  Eligible employees receive ordinary statutory paternity pay for this period, usually the same figure as the basic prescribed rate of SMP.  Additional paternity leave: subject to eligibility and notification requirements, this will be between 2 and 26 complete weeks within the period beginning 20 weeks after the child’s birth and ending on their 1st birthday.  Additional paternity pay is available which is broadly equivalent to the amount of any statutory maternity pay or allowance not taken up by the mother.
 
Under the new system of shared parental leave and pay, eligible employees will be entitled to a maximum of 52 weeks' leave and 39 weeks' statutory pay upon the birth or adoption of a child, which can be shared between the parents.  This will be in addition to the existing rights set out above, save that when shared parental leave is introduced, the additional paternity leave and pay system will be abolished.
 
Adopters will be entitled to take advantage of the leave rules, as will the intended parents in a surrogacy arrangement. Statutory adoption pay will also be brought into line with statutory maternity pay, by the introduction of a six-week period at 90% of earnings.
 
Shared parental leave will be available for parents of children expected to be born or placed with them for adoption from 5 April 2015. Protection from unfair dismissal or detriment in relation to the exercise or proposed exercise of such rights is expected to be in force from 1 October 2014.
 
Key points relating to shared parental leave and pay:
 
1. Fathers and mothers will be entitled to a maximum of 52 weeks leave and 39 weeks pay (at the prescribed rate only) between them, subject to satisfying qualifying conditions.
 
2. All of the 52 weeks except for the 2 weeks directly after the birth (which must be taken by the mother) will be available for sharing.  The mother can opt to end her maternity leave and share the remaining leave with her partner.  This must be taken within the 52 weeks after the birth or adoption placement.
 
3. A couple may take the leave and pay concurrently or consecutively.  They can take it in blocks and in multiples of a complete week.
 
4. In terms of notice requirements, not less than 8 weeks before the start date chosen by the employee for their own first period of shared parental leave, the employee must provide “notice of entitlement”.  The employer is entitled to request various documents and information to support the request.  The notice of entitlement must set out the intended split of the entitlement between each parent and an indication of when the employee will take their part.  A leave notice must also be provided specifying the dates of the leave, at least 8 weeks before the start date.  An employee can issue up to 3 leave notices (inclusive of notices to vary a period of leave previously notified).  For discontinuous leave requests, the 8 weeks will include a 2 week discussion period between employer and employee.
 
5. An employer can refuse an employee’s request for shared parental leave if the leave notice is for discontinuous blocks of leave.  In that case, the employer can agree, suggest alternative dates or refuse.  If refused, the employee can take the total of the leave requested in one continuous period or withdraw the notice.  
 
6. An employee will be able to vary the dates of an approved request for shared parental leave, subject to a maximum of 3 leave notices and variation in total and provided time limits are complied with.
 
7. Each parent will have 20 keeping in touch days available.
 
The draft Shared Parental Leave Regulations 2014 were published by the government on 5 March 2014.  They can be found here. Note they are not yet in final form.
 
It is anticipated that planning and paying for shared parental leave could be tricky if the employee wants discontinuous periods of leave or changes agreed requests.  Employers should try and develop a clear policy on how such requests will be dealt with to minimise the risk of allegations of discrimination or breach of trust and confidence.
 
The government has stated that it is working on a range of information and guidance. This will include online tools to help employers and employees understand and access the new shared parental leave and pay system. These will start becoming available from the summer.
 
For further information on the issues raised in this article, please contact Helen Wyatt on 020 7925 8083 or by email at helen@spencer-wyatt.com.
 

+44 (0)20 7925 8080 info@spencer-wyatt.com