Working families get support with the Work & Families Act

Given the high profile of new age discrimination laws, the most significant legislation in support of working families for almost a decade is somehow failing to register, says Amanda Wilkinson

Case study: BT

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Over the last few months, the legislative spotlight for HR and benefits practitioners has been focused on regulations designed to prevent age discrimination in the workplace. However, this is not the only legislation due to come in to effect on 1 October. The Work & Families Act, encompassing the most significant measures to support working families for almost a decade, will also come into play. The Act extends paid maternity leave from six to nine months and provides for a further three months as unpaid leave. It also offers fathers additional paternity leave of up to six months; and gives carers of adults the right to request flexible working for the first time.

Jonathan Chamberlain, a partner in Wragge & Co’s employment law department, believes some employers will not be ready for the changes. “I think lots of employers at the moment are focusing on age discrimination, but I think there’s a substantial minority that have not realised that the implementation date for this legislation is [also] creeping up.” He advocates that employers should examine their policies and procedures to make sure that they take into account their increased responsibilities under the Act. All working mothers whose due date of childbirth or adoption placement falls on or after 1 April 2007 will, under the new legislation, have the right to receive statutory maternity pay (paid to those expectant mothers who have 26 weeks’ continuous service), maternity allowance (paid to those expectant mothers with less than 26 weeks’ continuous service) or statutory adoption pay for nine months. There is an intention that this will be extended by a further three months to one year’s paid leave by the end of this Parliament. In the meantime, mothers from April 2007 will be entitled to take an additional three months’ unpaid leave, enabling them to take up to 12 months’ leave in total.

Previously, only working mothers who had clocked up 26 weeks’ continuous service could take up to 12 months as maternity leave (six paid, six unpaid), while those with less service could only take six months’ paid leave. There are also new rights for fathers. Current legislation specifies that fathers who have 26 weeks’ continuous service are entitled to two weeks’ statutory paid paternity leave. Under the new legislation, in the second six months of the child’s life, fathers will be entitled to additional leave some of which could be paid provided the mother returns to work.

The details of how this additional entitlement for fathers will be managed have yet to be finalised and many employers have concerns about how this so-called shared leave will be administered in practice. The government has committed to implementing this new entitlement by the end of this Parliament. Chamberlain adds: “I think there are also real doubts of what the take up of this will be. There’s still a lot of resistance out there to the idea that men should be taking a childcare role.” Despite the potential for administrative and logistical complexity around shared leave, the Act does, however, go some way to improving an employer’s position. It extends the notice period from 28 days to two months for women returning to work earlier or later than originally planned. Furthermore, employers will be allowed to make reasonable contact with employees on maternity leave to help them with planning and easing the mother’s return to work.

The Act will also introduce ‘Keeping in Touch’ days, so that where employers and employees are in agreement, a woman on maternity leave can carry out up ten days’ work for her employer, without bringing her maternity leave to an end. Kathleen Healy, a partner in the employment department at Freshfields Bruckhaus Deringer, says: ‘This represents a move away from the old rules that if you are deemed to have returned to work statutory maternity pay would stop. I think these days will be welcomed by employers as a sensible way of getting people back into the workplace.” Other measures designed to help businesses include: allowing calculations of statutory maternity pay on a daily rather than a weekly basis and amending the start date for statutory maternity pay so that it begins on the same day as maternity leave.

All these changes will apply to employees whose expected date of childbirth is on or after 1 April 2007. However, flexible working is one area where employers’ duties are set to increase. The new legislation extends the right to request flexible working to carers of adults from April 2007. This right is currently limited to parents of children aged under 6 or disabled children under 18 years. The employer is obliged to consider the request seriously. “If they are going to turn it down, they need to be able to evidence when they have turned it down and they need to record their thinking in writing. They need to be relying as far as possible on objective factors, rather than simply saying ‘this will make life difficult for us’,” says Chamberlain. The details of how this new entitlement will work have yet to be finalised.

The degree of take up is also in doubt. The Third work-life balance employees’ survey 2006 by the Institute for Employment Studies for the Department of Trade and Industry, revealed that 42% of employees were already aware of this new right to request flexible working. But the study also found that despite a rise in the availability of flexible working arrangements, both through statute and the employer, take up hadn’t similarly increased. Jo Casebourne, senior research fellow at the IES, says: “People are very positive about working flexibly for them and their colleagues but it’s not coming through in terms of a massive level of take up.” Apart from putting flexible working arrangements in place, employers can also offer either childcare vouchers or other forms of care vouchers, to help make life easier for employees with caring responsibilities whether for children or adults. However, only tax and national insurance breaks apply to childcare vouchers.

Lynne Currer, product manager, childcare vouchers at Accor Services, says: “We are working with a number of other providers to try and lobby the government for a similar type of tax and national insurance exemption for elder care or care vouchers as you currently get from childcare vouchers.” Onsite nurseries and discounts on nursery places provided outside the workplace can also be a valuable benefit for working parents. PricewaterhouseCoopers (PwC), which has an enhanced maternity package providing up to 12 months of free childcare vouchers, is also piloting a free emergency scheme in five offices, allowing beneficiaries access to five free days of nursery care. Such measures help the likes of PwC stand out from the crowd.

Case study: BT

Becky Mason, BT people and policy manager, says: “We have a 99% return rate, but after a year we still have a retention rate of 78%, which is far greater than the national averages and we think that that is down to the level of provision our polices provide.” BT offers maternity leave for up to a year with the first 18 weeks on full pay, then 8 weeks on half pay, followed by the equivalent of statutory maternity pay for the remaining 26 weeks. Paternity leave is provided for four weeks, two weeks on full pay and two weeks unpaid. Parents are also offered childcare vouchers on a salary sacrifice basis and discounts on a range of nursery providers. Furthermore, BT operates a portfolio of flexible working initiatives which includes part-time working, shift swapping, job sharing, term-time working, nine-day fortnights and annualised hours. These are potentially available to all staff at BT whatever their needs. Mason adds: “But as to whether flexible working can be taken up is based on operational feasibility.” She believes that the provisions in the Work & Families Act are so narrow that many carers will be unfairly excluded from the right to request flexible working.