Flexible working could challenge pay strategy

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.