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House of Lords Hansard
Statutory Shared Parental Pay (General) Regulations 2014
10 November 2014
Volume 757

Motion to Consider

Moved by

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That the Grand Committee do consider the Statutory Shared Parental Pay (General) Regulations 2014.

Relevant documents: 8th Report from the Joint Committee on Statutory Instruments

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My Lords, I beg to move that the Statutory Shared Parental Pay (General) Regulations 2014 be considered by the House. In doing so, I shall speak also to the Maternity and Adoption Leave (Curtailment of Statutory Rights to Leave) Regulations 2014 and the Shared Parental Leave Regulations 2014.

We are here today to consider changes to the law on family-related leave and pay. These changes started with the Children and Families Act 2014, which enables Parliament to make regulations introducing shared parental leave and pay. These regulations give qualifying working parents a new statutory right to share leave and pay where the mother has taken, or intends to take, less than her full statutory maternity entitlement—that is less than 52 weeks’ leave in the case of maternity leave, and less than 39 weeks’ pay in the case of statutory maternity pay or maternity allowance. The new system will apply to working parents who are expecting a baby which is due on or after 5 April 2015. These regulations put in place the overarching legal framework for shared parental leave and pay and set out how this will work in practice.

Noble Lords may be wondering why it is necessary to make these changes. They are required because the laws on maternity and paternity leave and pay that we have now are rigid and inflexible. They have failed to keep pace with the modern family and the modern workplace.

Looking first at the modern family, the current law assumes that the child’s mother is always the main carer. This is clearly not the case for many families, as women now make up almost half of the United Kingdom’s workforce. The role of women in the workplace has changed dramatically since women were given rights to maternity leave and pay in the 1970s. In nearly a third of households, women are the main earners. It is therefore unsurprising that many women choose to return to work sooner than they would have done historically. Women return to work for a variety of reasons, including financial reasons, as well as a desire to avoid any setbacks to their career or work prospects that may follow a prolonged period of absence from the workplace. The changes to the law that we are considering are therefore partly about reflecting modern life. The regulations before us restructure the legal framework to make it easier for mothers to stay in the labour market, if they wish to do so.

The Government also have a more ambitious agenda. We want to facilitate a cultural shift towards the removal of outdated beliefs about the role of fathers and partners in caring for their children. Evidence shows that where fathers and partners are involved early on in the life of the child, they are more likely to stay involved and that there are positive benefits not just for the children but for society generally. However, the current law propagates outdated assumptions. Instead of supporting fathers and partners who want to play an active role in caring for their children, it hinders them by placing constraints around how much time they can take off from work.

The current arrangements can be unhelpful to fathers and partners who want to, or who out of necessity have to, be the primary carer. The current law enables fathers and partners to take one or two weeks’ paternity leave within the first eight weeks following birth—a position that will remain the case after these regulations are passed—and further leave later on, but only if the mother has returned to work, whereas those regulations will be subsumed by the regulations before us. In short, parents, including fathers, have some choice about who cares for their children, but it is a limited choice. The Government believe that working parents should be able to decide for themselves which of them is best placed to care for the child. We do not want to force arrangements on working parents which may not work for them or their employers. We believe that fathers and partners should be able to be the primary carers, if the parents wish that, and that mothers who want to work should be given rights which make their transition back to work easier.

Shared parental leave and pay enables fathers and partners to be the main carers if they so wish, both parents to spend time at home together and the parents to stagger their leave so that one of them is at home when the other is at work. In enabling them to share the responsibility for the care of their child, we enable both parents to maintain stronger links with the labour market. As I am sure noble Lords will agree, enabling employees to maintain links with the labour market and individual employers has many benefits for business. These include lower staff turnover and therefore lower recruitment and training costs. Employees who have a better work/life balance are also likely to take less sick leave and to have higher levels of commitment to their employers and work generally.

The Maternity and Adoption Leave (Curtailment of Statutory Rights to Leave) Regulations would specifically enable a mother to give her employer notice to end her maternity leave early, on a date which she chooses, and to indicate that she or her partner intends to take shared parental leave. The word “curtailment” in the title of the regulations is perhaps unfortunate; it gives the impression that something is being lost by this when in reality it is an option to share the leave with the father or partner.

Once notice has been given, there are only very limited circumstances in which the mother can reverse her decision. The mother needs to end her maternity leave early to create shared parental leave for her and her employed partner to take. In essence, the untaken balance of the mother’s maternity leave is used to create the shared parental leave. Where the mother creates shared parental leave by giving her employer binding notice, her employed partner can start to take some or all of this leave while the mother is still on maternity leave, so that both parents can be at home together with their child if they so wish. Because the mother chooses the date when her maternity leave will end, she remains in control of the number of weeks of maternity leave that she takes. If she wants to take the full 52 weeks of maternity leave to which she is entitled, she can do so. This is the default position if the mother does not opt into shared parental leave.

The Shared Parental Leave Regulations and the Statutory Shared Parental Pay (General) Regulations provide the nuts and bolts of the new system. They set out how shared parental leave and pay work: for example, how parents calculate how much shared parental leave they can take and when they can take it.

In contrast to maternity leave, which has to be taken in a single block of consecutive weeks, shared parental leave can be stopped and started again, with the employee returning to work between periods of leave, if they wish. The regulations provide for that. For example, an employee could return to work between periods of shared parental leave to complete a particular project or during a period when the business is particularly busy. The Committee will be able to see how that arrangement might work for certain employers or be attractive to certain employees: for example, those who are reliant on commission to make up their wages or salary.

The regulations also enable an employee to claim up to 37 weeks of statutory shared parental pay while they are on shared parental leave and enable employees and workers who are not eligible for leave to create statutory shared parental pay for their employed partner to take. The statutory shared parental pay is created from untaken statutory maternity pay or maternity allowance. The pay is based on the mother’s salary or on the maternity allowance.

The regulations give employees who are on, or intend to take, shared parental leave similar protections to employees on maternity or paternity leave. They ensure that the employee is not treated less favourably than other employees because they have exercised their statutory right to take the leave. They also balance the needs of the parents with the needs of their employers, who understandably want to know when their employee will be absent from work on shared parental leave in order to plan for the employee’s absence. The regulations do that by linking entitlement to shared parental leave and pay to the employee giving their employer adequate notice of both their entitlement to leave and periods of absence. With very limited exceptions—which include early births—the employer must receive at least eight weeks’ notice of any periods where the employee will be absent from work on shared parental leave. If an employee fails to give sufficient notice, they will not be eligible for the leave or pay.

The regulations are necessarily detailed in places, as we need to provide for the wide variety of circumstances that parents may encounter. For example, the regulations need to cater for exceptional events such as the sad death of the child or one of the parents. The Government are providing guidance and tools to help working parents and their employers to understand and use the new shared parental leave and pay system.

The Committee may be wondering what happens in the case of adoptions and civil partnerships. I have deliberately talked about birth parents, as they make up the vast majority of employed parents who will be eligible for shared parental leave and pay, but in the two other cases, they apply mutatis mutandis, in just the same way. I assure the Committee that the provisions in the regulations apply equally to parents who have a child placed with them for adoption on or after 5 April 2015 and similarly apply to civil partnerships.

In summary, the regulations provide the legal structure for shared parental leave and pay which is needed for the new system to work in practice. The provisions contained in the regulations are made under the powers introduced through the Children and Families Act 2014. They are in line with statements made in the course of debates on the Bill during its passage through Parliament, and the policy on shared parental leave and pay was consulted on extensively. I therefore trust that the Committee will be able to support these statutory instruments, and I commend them to the House.

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My Lords, in general, I support the regulations, because I understand that the thinking behind them is to enable both parents to come together to care for the child; obviously, one supports that.

However, I should like to raise one or two issues with the Government, just for clarification. Incidentally, I thank the Minister for the detailed paper that has been issued in support of the regulations. The regulations stipulate that for an eligible mother to meet the requirements for a shared allowance and so on, she must curtail her maternity or adoption leave in order that the curtailment can be used to support the new shared parental provisions.

This could give rise to some problems here and there, because not every couple is married and not every couple is living together. The mother might have difficulty contacting the father to enable them to come to an agreement in relation to the shared provision provided for in these regulations. One has to remember that relationships are not all exactly as we would wish them to be. People do not always live together—they may have a child together but may not live together, and the woman may therefore have the obligation placed on her of trying to sort things out and make sure that the shared rights are available. If she has to curtail her own share, that may be a bit more difficult. Have the Government thought about this? We are of course working in this situation where not everybody is in married partnerships or even living together. Nevertheless, we want to ensure that both parents participate in looking after the child, when the child needs to be looked after, and that the rights under the regulations are properly shared between the two parents.

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My Lords, the legislation in the Children and Families Bill went through extremely smoothly. In fact, I think it was one of the smoothest things I have seen in the four and a half years since I came into the House because all sides welcomed the introduction of parental leave. Just looking at noble Lords around the Grand Committee, I do not remember any amendments at all during the passage of the Bill, which was very encouraging. I am principally glad—I am delighted that my noble friend outlined this at the start—that the interpretation of “family” in Regulation 3 gives a clear picture that it comes in all shapes and sizes, including same-sex partnerships. The issue about the family unit is a difficult one but I hope this also covers the point made by the noble Baroness, Lady Turner, that a family is not always at the same address. Recognition of that about the family unit is most important and is a major step forward for government. Let us hope that employers are as encouraging. I am delighted to see that adopters have the same entitlement to leave. It is even more essential when a child may have had a distressing start to their life to be able to have that relationship with both of their new parents.

I have two questions, which are not so much about the regulations but about their application. The first relates to Regulation 17, which modifies the eight-week regulation where a child is born early. I have a nagging worry that employers might use these regulations to be less than compassionate to a partner where the mother and the baby might still be in hospital. If the baby is in a neonatal intensive care unit, could the employer say, “Well no, the mother is using the leave and therefore you can’t”? It is quite possible these days for a baby to be in a neonatal intensive care unit for more than the eight weeks covered by the early period after birth. The second question refers to the following regulation, on change of circumstances. Can the Minister provide some reassurance that there will be monitoring of employers saying that it is not convenient to change arrangements at fairly short notice? If this becomes a default reason for refusing change, it will be defeating the object of the regulations.

Part 5, on taking shared parental leave, includes a regulation looking at protection from detriment. There is some concern over the right to return after shared leave in Regulation 41 that the job the partner can go back to is broadly in sympathy with the job that the mother can return to. I think it would be wrong for a partner to have a less robust facility to go back to their prior job. It would be reassuring to hear that that is the case.

Will there be codes of practice for employers on how they can liaise with each other when dealing with this arrangement between a mother and a partner trying to break down the leave between themselves, particularly in relation to statutory maternal/paternal pay?

On a positive note, I know of at least one young couple who have delayed starting their family until this comes into place because the partner works for a very open-minded organisation and he would like to test it on extended parental leave at a fairly early date.

Finally, we need some really good evidence of how this is being used to encourage employers and prospective parents that this is something that will really change the nature of a child’s first year’s relationship with both their parents.

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My Lords, I thank the Minister for his comprehensive reply. I do not know whether this is his first time in this Room. If it is—I think it must be—I offer him a warm welcome. My only complaint is that the progress made under the previous Government was given rather short shrift, if the Minister does not mind me saying so, so I will give a little historical background. The Labour Government transformed rights for women and families in order to help them balance earning a living and caring for their family. Over 13 years, Labour extended paid maternity leave to nine months and the right to take maternity leave to 12 months and gave new entitlements to paternity leave and pay for fathers.

The Labour Government also introduced the right to request flexible working. In 2009, this was extended to parents with children up to the age of 16. We introduced a right to request flexible working to people with caring responsibilities for disabled or elderly relatives and to parents with disabled children up to the age of 18. We ought to remember that David Cameron and the Conservatives voted against the introduction of paternity of leave, the extension of maternity leave and the right to request flexible working. I always welcome a Government having a Damascene moment, and I am glad that the Government are on board, as they nowadays are, with the minimum wage.

We support today’s regulations to reform the work-life balance for families. We think they are positive and comprehensive legislation. As I worked my way through them, I admit that they started to make my cerebral cortex ache with the various circumstances that might apply. The Government have tried comprehensively to account for more or less every circumstance that one could think of. Shared parental leave is a step towards levelling the playing field for fathers, and that is to be welcomed. The Minister talked about facilitating a cultural shift. That is an ambitious project and it takes time, but I think it is the right thing to say. I do not say that in a derogatory way. That is what we are trying to do. The Minister drew out some points, including the importance of maintaining links with work. Today, both fathers and mothers, but principally women, want to continue careers. I also welcome the fact that we now have a situation where both parents can be at home, using that curtailment. There is flexibility.

I also recognise that this is a challenge for employers and that they will need adequate notice. The noble Baroness, Lady Brinton, made a valid point about the need for a code of practice or guidance, given that there will be different employers.

Returning to the point about facilitating a cultural shift, we would be interested in hearing from the Minister what the Government will do to promote shared parental leave, because we will have to promote it. We know from the data available for the first two years of additional parental leave that only an estimated 1% of eligible fathers took it, so a cultural shift takes time.

The Government estimated in their impact assessment that between 2% and 8% of fathers would take up shared parental leave. However, experts claimed that that figure was optimistic. As I said, only 1% of fathers have taken additional parental leave, which shows that even the lower end of the Government’s estimate looks optimistic. That takes us back to what positive steps the Government are taking to promote this.

I will be interested to hear the Minister’s response to my noble friend Lady Turner’s point about couples not necessarily residing at the same address. She is absolutely right; we have every variation on the theme that you could imagine nowadays with regard to parenting. The noble Baroness, Lady Brinton, was right to bring up the not necessarily exceptional circumstances, these days, of children who are born extremely early. That is a valid point.

The monitoring of employers and the review process will be very important. I will be grateful if the Minister will set out in his response what the Government will do to increase the uptake of shared parental leave so that the intention of the changes introduced through the Children and Families Act 2014 and the regulations can be fully realised.

Despite those comments and a number of questions, we entirely welcome the proposals.

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I thank noble Lords for their contributions to what has been a very interesting debate, and for the support around the Room. I am delighted that noble Lords have supported the regulations and to see strong support for the new shared parental leave and pay system.

I shall try to deal first with the points raised by the noble Baroness, Lady Turner of Camden. First, on couples who are not part of a typical family unit, including where they are living apart, providing that they meet the definition of partners, spouses or civil partners, they are fully covered. I take the point, also made by my noble friend Lady Brinton, that families come in all shapes and sizes now. The Government have certainly done our best to accommodate that, so I hope that I can give reassurance on that point.

The noble Baroness also asked about having some way to facilitate agreement between the partners and what happened where people are living apart. Clearly, the Government are unable to legislate for every situation. It is incumbent on partners, where they are living apart or otherwise, to come to an agreement. Underlying all this is the principle that that has to be in the interests of the child.

If I may, I shall come to some points raised by the noble Baroness about the code of practice when I deal with the points raised by my noble friend Lady Brinton.

Parties are entitled to shared paternity leave. The interests of both working partners are fully protected, both the father and mother, on an equal basis. A code of practice has already been developed by ACAS, which has been warmly welcomed. No doubt it will be monitored and, if changes are necessary, they can be made to it as things progress. We should not see this as something set in stone and adamantine; if changes are needed, I am sure that they can be made.

I turn to points raised by the noble Lord, Lord Young, thanking him for his kind remarks and the historical journey that he took us on; I suspected that there might be a bit of party knockabout. I fully recognise that these regulations are supported across the Room, and rightly so. It makes the cultural change that we all want that much easier if we all support it and are doing everything we can to make sure that it happens.

I can reassure the noble Lord about the rollout. He is right that we need to do more on that to make sure that it is taken fully on board by those who are prospective beneficiaries of it. At the moment, it is featured on the GOV.UK website, and there is evidence that there has been a lot of downloads by employers, so they are aware of this. We have to make sure that employees are aware of this, such as the potential family to which my noble friend referred. Perhaps these regulations should be named after them, if they are taking full benefit of this as pioneers. But it is important, in all seriousness, that we make sure that the messages are rolled out. This is being done through the TUC, the CBI, the FSB and the National Childbirth Trust. I have asked officials to look at the possibility of ensuring that information is available through commercial outlets such as Mothercare. It seems to me that places such as that would be a good way of trying to get the message across so that we ensure that everybody benefits in the way that we want, not just the families, partners and children concerned but society in general, as we want that cultural shift.

These regulations will enable working parents better to balance their caring and work responsibilities and will enable employers to plan for the periods when their employees will be absent from work on shared parental leave. I commend these statutory instruments to the Committee. I beg to move.

Motion agreed.