Proposals to reform flexible working and parental leave could raise questions on how to fairly compensate an employee working flexibly.
The standard approach of apportioning pay might need to be reviewed and replaced by organisations rewarding flexible workers more closely based on their outputs and productivity levels, said Dawn Nicholson, HR consulting partner at PricewaterhouseCoopers (PWC).
She added: “The apportionment approach, while practically easy to implement, may not be rewarding employees fairly for what they are contributing.”
Government proposals, announced by deputy prime minister Nick Clegg on 13 November, are aimed at allowing fathers to play a greater role in raising their child, helping mothers to return to work at a time that is right for them, and creating more flexible workplaces to boost the economy.
Under the proposed new system of flexible parental leave, parents will be able to choose how they share care of their child in the first year after birth. Employed mothers will still be entitled to 52 weeks of maternity leave. However, working parents will be able to opt to share the leave, except for the first two weeks (or four weeks if they are a manual worker), which mothers will have to take.
Clegg said: “Our current system of maternity leave is antiquated and out-of-step with the wishes of modern parents who want much greater flexibility in how they look after their children.
“Reform is long overdue and the changes we are making will shatter the perception that women have to be the primary caregivers. In the future, both mothers and fathers will be able to take control of how they balance those precious first months with their child and their careers.
“This is good news not only for parents and parents-to-be, but employers too that will benefit from a much more flexible and motivated workforce.”
The proposals are also aimed at ensuring both parents keep a strong link with their workplaces, helping employers to attract and retain women, and preventing women from dropping out of the workforce following childbirth. The government said that the aim is for women to face less of a career penalty for taking an extensive period of time off.
Jo Swinson, minister for employment relations, said: “These proposals bring good news for business, not least a more motivated and productive workforce.
“Employers will be able to recruit and retain staff from a wider pool of talent, in turn, helping to diversify our economy and drive growth.”
Under the proposals, parents will be required to provide a self-certified notice of their leave entitlement to their employers, with the government planning to consult fully in 2013 on the detail of how the new system will be administered. Parents will be expected to give their employers eight weeks notice of intention to take flexible parental leave.
The government intends to create a new statutory payment for parents on flexible parental leave, with the same qualifying requirements that apply to statutory maternity and paternity pay.
Fathers are also to gain a new right to take unpaid leave to attend two antenatal appointments. Statutory paternity leave will remain at two weeks, but the government is to keep this under review and look at extending this period once the economy is in a stronger position.
The government has also announced proposals to extend the right to request flexible working to all employees, to give greater choice and freedom to workers and employers.
It aims to remove the cultural expectation that flexible working only has benefits for parents and carers, allowing individuals to manage their work alongside other commitments and improving the UK labour market by providing more diverse working patterns.
The government also plans to remove the current statutory procedure for considering requests. Instead, employers will have a duty to consider all requests in a reasonable manner.
The government plans to legislate on these proposals in 2013. It will then introduce the changes to flexible working in 2014 and to flexible parental leave in 2015.
The government’s announcement today that new parents will be able to share parental leave and that the right to request flexible working will be open to all look great on paper. However, you only have to look at the slew of outraged responses citing the impact on businesses to see that this kind of flexibility is widely misunderstood in the UK, and that a lot of good research showing the link between flexibility and business success and profitability has gone by unnoticed.
One of the main benefits of the widening of the right to request to all staff is that flexibility stops being the preserve of the working mother. Linking the right to request flexible working to caring responsibilities put flexibility firmly in the domain of women. People, including employers, may then feel that flexible workers have made a choice to be less committed to their work, and their careers suffer as a consequence. It is not a coincidence that, despite anecdotal evidence that managers value the contribution of their flexible workers, those workers are less likely to get the best grades in performance management in many organisations.
For this reason, employers need to look at the culture that surrounds flexible working if they really want staff to work in a flexible way that suits their business needs. Chief among those changes is to ensure flexible working is seen as a business tool, and that requests to work flexibly are evaluated against how well they support the business and not against the reason for the request.
The Top Employer for Working Families report 2012, produced by Working Families and the Institute for Employment Studies, shows that many employers committed to flexible working still make value judgements about the reason for the request and fail to take adequate account of what pattern of working suits their business need.
The situation is similar with sharing parental leave. Even in organisations that offer two weeks paternity leave on full pay, fathers do not always take up this benefit. Again fears of seeming uncommitted to your work or employer stand it the way.
Employers need to get to grips with these cultural challenges now otherwise the changes in legislation will count for very little; we will still find ourselves in the situation where one parent has to take parental leave and work flexibly, probably stalling their career and detracting from the real benefits of flexible working.
We welcome the deputy prime minister’s proposal to allow parents to take advantage of flexible parental leave. We have had a policy in place for almost a year now which has allowed working parents to take advantage of such flexibility and it has already been taken up by a number of new fathers.
As more than half of our employees are working parents, it makes sound business sense to allow individuals the flexibility they need to manage their careers and their family commitments.
To achieve a flexible working culture in business requires a high-trust workplace environment, leadership from the top and individual accountability. It’s about empowering people to choose how, when and where they work. And from my own experience I can wholeheartedly say that reduced hours never means reduced commitment.
We are very passionate about the business case for change on flexible working, both at Ernst & Young and for British business. It helps to attract and retain the best and brightest; our employees, clients and customers demand it; and it can lead to competitive advantage.
Working flexibly will be different for each person, parents and non-parents alike. And while admittedly this style of working can appeal to women who are parents, this is not just about the gender agenda. The next generation also expect more virtual working and increased flexibility – we hear this from many of our graduate recruits.
Working flexibly can be part-time working, reduced hours or regular sabbaticals/time off to fulfil a passion or commit to a hobby. But one thing that is common to all of these is balancing business needs with personal desires. All flexible working arrangements start with a business conversation.
The shared leave proposals are a welcome step towards greater equality at work and at home. Families will benefit from more choice about which parent stays at home to care for a new baby. While few low income couples will be able to afford both parents taking time off at once, the ability to transfer leave to the father will be particularly welcomed by couples where the mother is the higher earner and it makes financial sense for her to return and the father to take over the care.
We are particularly pleased that the government has listened to our concerns about their original proposals and made sure that women’s employment rights are protected.
We hope that the new shared leave will not only change the conversation around the kitchen table, but contribute to culture change in the workplace. We know from our helpline that too many women are discriminated against at work due to pregnancy and maternity. More men taking time out may challenge employers’ assumptions and help deliver more equality in the workplace too.
However, it is disappointing that the opportunity has not been taken to extend fathers’ individual rights to leave, as international evidence shows that, along with adequate pay levels, earmarked leave for fathers would encourage take up. More fathers’ leave would be welcomed by the increasing number of fathers who want to spend more time with their children. We will be pressing for further amendments to the proposals before they become law.
Extending unpaid parental leave to parents of older children will help many families struggling to fill gaps in holiday childcare, or who need time out to help their child through a difficult time.
Any proposals that support greater opportunities for flexible working are a positive step and will help to create a more balanced workforce. But in order for the proposals to work, there will need to be a major change in the attitudes of some employers. There are still examples of men being treated less favourably than women when making flexible working requests and employers will need to work hard to drive a real culture shift.
Smaller employers will face the biggest challenge from the proposals, as agreeing to flexible working requests will not always meet their business needs and could place an unfair burden on full-time staff. A suitable balance needs to be struck between supporting greater flexibility for workers and encouraging more women back into the workplace, and ensuring smaller employers are not placed under undue pressure.
The government consulted widely on these proposals, and we were one of a great many organisations and businesses to respond positively.
A shift in attitudes to flexible working is a natural reflection of the changing nature of work and the workforce. More flexibility extends the ability of employers to attract, retain and motivate a more diverse workforce, better reflective of the customer base they serve.
Firms are increasingly finding that they can benefit from a higher level of loyalty, commitment and engagement from workers from a broad base of employees, not just working mothers, if they adopt a more universal approach to considering flexible working requests. In contrast to some of the rhetoric in sections of the media, it is also interesting to note that many small businesses make extensive use of flexible working and, because of their size and personal relationships with their employees, can be among the best at making it work.
The light-touch changes the government is announcing won’t lead to an overnight change, or in our view unleash any huge latent demand. But we hope they will contribute to continuing cultural change, recognising a positive trend towards more flexible and diverse ways of working.
Employers should have nothing to fear and much to gain from embracing this change, and using it as an opportunity to consider how flexible working practices can both attract a more diverse workforce, but also support them better, resulting in better engagement and wellbeing which in turn produces higher levels of productivity and performance.
The extension of the right to request flexible working to all employees from 2015 is a long cherished objective of the Coalition following its inclusion in the “Programme for Government”.
The current statutory framework was introduced in 2002 and limits the right to request flexible working to carers and those with a minimum length of service. The practical consequences of any extension may be more limited than expected for a number of reasons:
• There is no current proposal to compel employers to accept requests to work flexibly. Employers may refuse such an application on a variety of grounds such as additional costs, detrimental impact on customer service, quality or performance;
• In practice, many employers have already gone further than the statutory scheme. For example, a CBI survey of London employers during the London 2012 Olympics found that over 50% intended (and presumably did) allow their employees to work flexibly during the summer period;
• Unfortunately, the main problem, in practice, is the increasingly common situation where an employee who has reduced their hours has failed to realise that there is no automatic entitlement to increase those hours to match their changing personal financial difficulties;
On the negative side, many employers will still find it difficult to argue that they require a full-working-week model, certainly in the absence of objective justification and a failed temporary trial period. As such any change may be unwelcome. The growth in mum-preneurs seems more likely to cause an increase in employment than fathers wanting to work part time.
The Coalition’s approach is clearly one of incremental rather than immediate change, by virtue of the financial challenges faced by businesses in the current economic climate. The original proposals contained a four-week reserved period for fathers, which would be paid in addition to the two weeks paternity pay, but the additional cost that this would trigger appears to be the reason why that proposal has been shelved; likewise the decision not to review paternity leave arrangements until 2018.
This is likely to continue to have an influence on the scope for the actual level of take-up of the new rights. For example, since April 2011, mothers have been able to transfer up to six months of their untaken maternity leave over to the father, with some of this paid at statutory rates, but as far as we can see from the experience of our clients the actual take-up of this right has proved to be low. Whether that has been due to the absence of flexibility in the approach or the financial impact on families perhaps remains to be seen.
From an employer’s perspective, it will be essential to receive adequate notice of a parent’s intentions in order to be able to plan effectively, particularly if this is to be combined with a request for flexible working arrangements. It is helpful that this receives prominent emphasis in the deputy prime minister’s announcement.
The introduction of flexible parental leave will be a significant step forward for working families, and the harmonisation of the rights of adoptive parents is overdue. Clarifying the rules on eligibility for leave for parents whose child is born through surrogacy may avoid further legal challenge in this area.
It’s a shame that the economic climate precludes any extension of reserved leave for fathers beyond the present miserly two weeks, but it’s encouraging that the enabling powers are there. As a small consolation prize for fathers-to-be, they will have the right to time off for antenatal appointments if their partner seeks their involvement; for both parents, the increase in unpaid parental leave to 18 weeks – and more importantly, the fact that by 2015 it can be taken in support of a child right though to age 18 – sends all the right signals about the continuing responsibilities of parents to their child’s development both in childhood and through the teenage years.
However, at the end of the day, a culture change within the workplace is needed to make sure that true gender equality happens. Through ENEI, we have anecdotal evidence that, while some organisations believe they offer family-friendly workplaces, dads don’t always feel they can take advantage of the policies. Employers have a responsibility to help to realise this and make it culturally acceptable for those with parental or caring responsibilities to balance these with work, irrespective of gender.
Nonetheless, it’s the changes on flexible working which will have the greater significance for employers. Good employers have recognised for years that, where they allow and encourage, all workers to work flexibly they reap rewards in terms of motivation and loyalty. And it’s timely that this announcement comes in the week of the launch of Engage for Success, with so many organisations backing the initiative.
Among the groups that will do well from the extension of the right to request flexible working are older workers seeking to improve their work-life balance and those over 65 seeking an alternative to cliff-edge retirement now that the default retirement age is no longer. From a practical point of view, requiring employers to be reasonable in how they deal with requests is infinitely preferable to the current statutory procedure.
The government’s proposals for flexible parental leave are to be applauded for allowing both parents to share what was once maternity leave. The Coalition is attempting to crack the glass ceiling so that it is no longer only women who take time off work. In practice, will this work? It is not so much the period of maternity leave itself that creates a career break, but the additional years away from the workplace that many women choose to take when their children are young. Does the government need to go further so as to ensure that men also take such breaks? It is interesting to note that the country that is so often cited as an example for equality is Iceland where the father must take at least three months of the parental leave. Is this a cultural change too far for the UK?
One significant change under the new system will be the ability to take parental leave in blocks of just a week, in contrast to the current position where maternity leave must be taken as a single period. The government accepts that this may create challenges for employers in arranging cover for employees on parental leave, so the default position will be that leave must be taken in a single continuous block, unless the employer agrees to leave being taken on a more flexible basis.
This additional flexibility will be attractive to both employees and employers. Employers may benefit from the fact that employees can return to work for periods of time during their parental leave, but retain the option of requiring the leave to be taken in a single period. Employees will have an opportunity to take leave in the way that suits their individual requirements and remain in touch with the workplace to a greater extent than is possible under the current system.
The proposals may have the benefit of making it much clearer for employers to decide what terms and conditions, including pay, to extend to individuals on parental leave. At the moment, there is some uncertainty about whether a man taking a period of additional paternity leave (APL) could compare his treatment with that afforded to a female colleague taking a period of additional maternity leave (AML). If such a comparison is permissible, it would be possible for the man on APL to argue that he should be entitled to the enhanced pay or other benefits, such as return-to-work bonuses, which are made available to the woman on AML.
Now that both parents will be able to take flexible parental leave, it should be clearer that as long as a man and a woman on parental leave receive the same treatment, there is no prospect of a successful discrimination claim.
The government has confirmed that the right to request flexible working will be extended to all employees, so a real concern for employers will be how to prioritise competing requests. In practice, difficulties are particularly likely to arise once a number of employees are employed on flexible working patterns, making it more difficult to agree to subsequent requests.
An employer’s main concern when faced with a flexible working request in those circumstances is likely to be the risk of an indirect discrimination claim from an employee whose request to work flexibly for childcare reasons for example is refused. Employers (and employees) will benefit from guidance that has been promised from ACAS about how the extension of the right to request flexible working to all employees interacts with an employer’s duty not to indirectly discriminate.
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