Government considers improvements in parental leave rights

In September 2000, as part of a review of maternity pay and parental leave, the UK government published a discussion paper intended to encourage public debate about how to help working parents balance work and family commitments. Trade unions and other campaigners hope that the review will result in proposals for some element of payment during parental leave.

A cross-departmental group of government ministers is currently undertaking a review of maternity pay and parental leave provision. The review was originally announced by the chancellor of the exchequer in the March 2000 budget statement (UK0004165N), and its terms of reference were published on 22 June 2000 by the trade and industry secretary, Stephen Byers, who chairs the ministerial group. The review group includes ministers from a range of government departments, including the Treasury, Department for Education and Employment, Department of Social Security and Department of Trade and Industry (DTI).

Focus of the review

The review is considering "the steps needed to make sure that parents have choices to help them balance the needs of their work and their children so that they may contribute fully to the competitiveness and productivity of the modern economy".

In particular, the review is to take into account:

  • the impact of maternity pay and parental leave on business, particularly small and medium-sized enterprises, and families - including whether it is possible to simplify the implementation of existing legislation;
  • best practice in business and its impact, including the extent to which employers currently offer additional entitlements or flexible arrangements;
  • factors affecting women's decisions to return to work after childbirth;
  • factors affecting the take-up of parental and paternity leave;
  • the impact of returning to work part time, from home or on flexible hours; and
  • reducing child poverty, including the particular problems faced by the workless and by parents receiving the Working Families' Tax Credit (UK9804116F).

Public consultation

A programme of consultation and research is being undertaken as part of the review. Consultations have been held with the Confederation of British Industry (CBI), Trades Union Congress (TUC) and other business organisations and groups campaigning on maternity and childcare issues. On 7 September 2000, the DTI published a discussion paper - Work and parents: competitiveness and choice- identifying key issues for discussion and setting out background information on the labour market context and current measures on maternity leave and pay, parental leave (including international comparisons) and flexible working patterns. Among the labour market statistics highlighted in the discussion paper are that:

  • 5.7 million households in the UK have at least one dependent child under the age of 12;
  • 4.4 million of these households are couples (married or cohabiting), in two-thirds of which both partners work;
  • the employment rate of mothers in couple families increased from 50% in 1990 to 68% by 1997;
  • in 1999, the employment rate of mothers with a child below the age of five was 53%, whereas the employment rate of mothers with older dependent children was over 70%;
  • the proportion of women returning to employment within a short time of childbirth increased from 45% in 1988 to 67% in 1996;
  • two-thirds of women returning to work after childbirth do so on a part-time basis; and
  • fathers with dependent children work longer hours than other men in a similar position, especially when they are the sole wage earner.

The DTI has also issued a questionnaire inviting - by 23 October - the views of parents, employers, employees and their representatives and voluntary groups on a range of issues, including what changes might be made to existing arrangements which would "help parents balance work and family life and be good for business".

The government is expected to publish a formal consultation document later in the autumn on proposals emanating from the review.

Commentary

New statutory parental leave rights and changes in maternity legislation came into effect as recently as December 1999 (UK9912144F), the parental leave provisions having been required to give effect to the EU parental leave Directive (96/34/EC). However, trade unions and other campaigners have sought to put pressure on the government to provide some form of paid parental leave to increase take-up of the leave, particularly amongst fathers and low-paid workers. EIRO's own comparative study of parental leave arrangements across Europe suggested that whether or not parental leave is paid, and to what extent, is the predominant factor determining take-up rates (TN9801201S).

A resolution carried by the TUC's annual conference in September 2000 (UK0010192N) called for paid parental leave, with "individual earnings replacement at a high level", greater flexibility in when leave can be taken, longer maternity leave with higher statutory maternity pay, and the right for women returning from maternity leave to work part-time. The TUC is also pursuing legal action against the government over the restriction of parental leave to parents of children born on or after 15 December 1999 (UK0006176N).

Against this background, the government is thought to have been considering the feasibility of offering a state benefit for part of the 13-week leave entitlement. Another possibility floated by ministers, but strongly criticised by employers' organisations including the CBI, is giving mothers returning to work after having a child the automatic right to part-time employment (UK0004165N). Extending maternity pay and relieving employers from having to administer it are also being considered as part of the review.

Employers' organisations continue to view enhanced parental leave rights as likely to be burdensome and damaging to business performance, and want the current provisions to be simplified. At the same time, one recent survey appears to suggest a "backlash" from workers without children who resent "special treatment" for working parents. Nevertheless, government ministers appear to regard family-friendly employment policies as popular with voters and the review is widely expected to result in proposals on improving parental leave entitlements for inclusion in the Labour Party's election manifesto, despite the criticisms from business that such a move is likely to encounter. (Mark Hall, IRRU)

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