Shared parental leave, it’s just round the corner – are you ready?
The introduction of the shared parental leave (“SPL”) and pay regulations is a mere 3 months away (the bulk of the statutory regulations coming into force on 1 December 2014). The regulations will be relevant to employees who are expectant parents of babies which are due (or adopters of children who are placed for adoption) on or after 5 April 2015.
Employers could start receiving notice of an eligible employee’s intention to take SPL from December 2014. So, if they have not done so already, employers should start putting in place their administrative processes (and training staff) to deal with the new regime as soon as possible.
In this news alert, we look in brief overview at this complex and detailed regime with some suggested steps employers should now be taking to prepare for the changes.
What is SPL?
The Children and Families Act (CFA) 2014 inserts new provisions into the Employment Rights Act 1996 to introduce a new optional entitlement for both parents (whether by birth or adoption) to share leave in the first year of their child’s life or placement for adoption. The provisions of the CFA 2014 will be supported by 5 different regulations, some of which are currently still in draft form (and remain subject to change).
SPL comprises of 50 weeks of leave and 37 weeks of statutory shared parental pay (ShPP) which can be shared between eligible parents (i.e. everything other than the 2 weeks’ compulsory maternity leave period immediately following the birth of a child or equivalent for adoption).
Eligible parents must take SPL in multiples of complete weeks. However – unlike the current system – it can be taken in either a continuous period (which an employer cannot refuse) or at different times throughout the year (which an employer can refuse). So long as the total time does not exceed the time available to the couple jointly, the leave can be taken by the parents consecutively or concurrently.
How is SPL different to the family-friendly leave provisions currently in force?
Maternity and adoption leave of 52 weeks (39 weeks paid and 13 weeks unpaid) will remain the default position, as will the two week period of compulsory maternity leave following birth (4 weeks’ leave if the mother works in a factory) (note: SPL is not compulsory, it is a more flexible scheme eligible parents can opt-in to).
Paid paternity leave of two weeks will remain available to eligible fathers. Statutory unpaid parental leave will also remain unaffected. However, additional paternity leave (APL) of 26 weeks, which came into force in April 2011, will be abolished. Once APL is abolished, paid paternity leave of two weeks will be the only entitlement that the child’s other parent will have unless they participate in the SLP scheme
What is different between SPL and APL?
Key differences between APL (which will be abolished) and SPL (the new regime) are:
- Up to 50 weeks’ SPL is available to share between the parents; whereas only 26 weeks’ APL (with a minimum uptake of 2 weeks) is currently available to the child’s father or mother’s partner once the mother had returned to work and only once the child is 20 weeks’ old;
- SPL can be taken between the parents either consecutively or concurrently; whereas APL is only available once a mother had returned to work;
- SPL can be taken in several blocks; whereas APL must be taken in one block.
The current system of APL has proved unpopular, partly due to its inflexibility of requiring the mother to return to work and abandon her right to further leave, before the father can take APL. In their election manifestos and coalition agreement, the Conservative and Liberal Democrat government promised to introduce a more flexible system of leave for both parents. A consultation on the new system of parental leave was carried out in May 2011, with the response being published in November 2012.
How will SPL and ShPP work in practice?
There are different qualifying criteria for SPL and ShPP and each parent must qualify individually in their own right.
In order to qualify for SPL, the child’s eligible parents must satisfy the following (summarised) conditions:
- The continuity of employment test (in summary, have worked for their employer for at least 26 weeks by the end of the 15th week before the due date and remain in employment until the week before any period of SPL);
- Have main responsibility for the care of the child, apart from the responsibility of the other parent;
- Comply with the detailed notice requirements to their employer of their entitlement and intention to take shared parental leave;
- Provide any evidence requested by their employer; and
- Give a period of leave notice.
In addition, the employee’s partner needs to satisfy an employment and earnings test (in summary, have worked for at least 26 weeks of the 66 weeks before the due date and have average weekly earnings of not less than £30 gross pay based on any of those 13 weeks) and have main responsibility for the care of the child.
In order to qualify for SPL, the mother must be entitled to statutory maternity leave in respect of the child and have ended any entitlement to that leave by curtailing that leave or returning to work before the end of her statutory maternity leave. In order for the father to qualify for SPL, the mother must be entitled to statutory maternity leave, statutory maternity pay or maternity allowance and curtailed that leave, pay period or allowance period.
Similar provisions apply where SPL is requested by adopters.
In summary, the main qualifying conditions to receive ShPP are that the relevant parent: (1) has been employed for a continuous period of at least 26 weeks prior to the 15th week before the due date and (2) has earnt an average salary of the lower earnings limit or more (currently £111) for the 8 weeks’ prior to the 15th week before the due date. There are however additional notification and evidential requirements.
If an employee is eligible for SLP and they (or their partner) curtail their maternity or adoption leave and pay (or maternity allowance), they can:
- take the rest of their leave as SPL (up to a maximum of 50 weeks);
- take the rest of their pay (up to a maximum of 37 weeks) as ShPP. ShPP is paid at the rate of £138.18 a week or 90% of the employee’s average weekly earnings, whichever is lower.
Employers will need to carefully consider whether they offer enhanced shared parental pay during any period of SPL if enhanced maternity pay is currently offered. If employers do not offer enhanced shared parental pay (but offer enhanced maternity pay to women) there may be a risk of claims for indirect discrimination from male employees, unless the employer can justify the difference (which may be difficult on the basis of cost alone).
Employees can request leave in one continuous block or request up to three separate blocks of leave (even if they are not sharing this leave with their partner), unless otherwise agreed with their employer. This means that a parent can go back to work for a short period of time and then choose to take a further period of SPL at a later date.
If an employee requests a discontinuous period of leave, within 2 weeks of receiving such notice the employer can either:
- Agree to the periods of leave requested;
- Propose alternative dates for the periods of leave; or
- Refuse the periods of leave.
What rights do the parents have during the SPL period?
As with the protections relating to maternity, paternity and adoption leave, employees will be entitled to the benefit of those terms and conditions of employment which would have applied had they not been absent, except for pay. In addition, employees will also have the following (non-exhaustive) rights:
- The right to return to the same job in which they were employed before their leave period (on the basis that their leave period (including any other relevant statutory leave) is 26 weeks or less. If more than 26 weeks the right to return to the same job or where that is not reasonably practicable for the employer another job which is suitable and appropriate;
- Additional redundancy protections;
- Protection from being subjected to a detriment or dismissal for taking or seeking to take SPL; and
- The right to have reasonable contact with their employer during SPL and the ability to undertake up to 20 days’ work without bringing the period of leave to an end. These days will be known as ‘SPLIT’ days (“Shared Parental Leave in Touch” days). They are separate and additional to KIT days that a woman has on maternity leave.
Whilst the Government has anticipated a fairly low up-take of the new leave provisions, employers should nonetheless ready themselves for the change:
- Train your HR department and line managers on the forthcoming changes.
- Ensure your family friendly policies and procedures are up to date with the forthcoming changes so expectant parent and adopters can know what to expect.
- Prepare a shared parental leave policy. Given the complexity of the rules and notification requirements (not addressed in this alert), you may want to include a frequently asked questions sheet and case studies to help employees navigate and comply with the notification and eligibility regulations. ACAS recommends consulting with employees when drafting or updating any policies to ensure that they work for both employees and the organisation.
- Review ACAS’ detailed guidance on SPL when this is published in autumn. Further guidance has also been published on the Government website Shared Parental Leave and Pay: employer guide.
- If you currently offer enhanced maternity pay to your female staff, carefully consider whether you will also offer enhanced shared parental pay (to both you female and male staff) bearing in mind that a failure to do so could be regarded as less favourable treatment unless justified. If you choose to do so, amend any contractual policies as necessary.
- Consider how your HR department will deal with the administrative burden of the new regime. The difference with the existing regime is that parents can now take the leave in blocks; how will you keep track of deadlines, requests and documentation?
- Consider now how you will deal with more than one request from staff in the same team. Ensure consistent treatment between team members to avoid allegations of less favourable treatment on protected, i.e. discriminatory grounds.
- Carefully consider what documentation you will request from your employees, if any, and how that documentation will be used and stored. Employers can request (although it is not compulsory) evidence such as a copy of the child’s birth certificate or documents relating to the adoption, together with the name and address of the other parent’s employer.
- Check that you are up to speed on the differing (and tricky) scenarios that can occur when administering SPL, such as when a child is born earlier than expected; where a parent ceases to be entitled to SPL etc.
- Remember to keep a record of SPL documentation, particularly where you have refused a request for discontinuous leave.