Shared Parental Leave & Pay

On the 1st December 2014 the Children and Families Act 2014 came into force which introduced a number of regulations that enshrine the right to Shared Parental Leave for eligible mothers, fathers, partners and adopters.

The option to use the new Shared Parental Leave rights will apply to parents who meet the set eligibility criteria and where a baby is due to be born on or after 5 April 2015, or for children who are placed for adoption on or after that date. Therefore employers could start to receive notice of eligibility and the intention to take Shared Parental Leave from qualifying employees from as early as January 2015.

Under the new regulations the mother or primary care giver must take the first two weeks off work to recover and care for the child, but fathers, partners or adopters can then take over for the remaining 50 weeks. They can also take the time off at the same time. For the sake of this article and ease of reference I will focus solely on the impact that these regulations will have for fathers and employers in the modern working environment.

Whilst the introduction of these new parental rights for fathers mark a considerable move towards parental equality and a shift away from the traditional parental relationship paradigm, it remains to be seen how many fathers are likely to take up the rights available.

Journalistic commentators have suggested that as few in one in four fathers would consider taking any additional shared parental leave over and above the two weeks paternity leave they are already entitled to. Amongst the reasons cited by expectant fathers regarding their reluctance to take any additional leave were; financial constraints where men were the main bread winner, loss of status, perceived lack of uptake by other male colleagues and the potential impact the additional leave may have on their career progression.

On the practical side, paying enhanced pay for shared paternity leave will be one of the main factors affecting whether employees choose to take up their rights to shared parental leave. The low take-up rate of additional parental leave to date is likely to be related to the fact that most employers choose not to enhance pay for additional parental leave. Fathers are far less likely to be encouraged to take shared paternity leave if they are not offered enhanced pay where the expecting mother is entitled to this benefit. For employers, the obvious factor in considering whether to offer enhanced pay is the increase in cost.

On the legal side, an important issue for employers is whether their approach to payment for shared parental leave could give rise to discrimination claims. If employers offer enhanced maternity pay, but not enhanced shared paternity pay, fathers, who can be at home at the same time as a mother on maternity leave, may claim that this is unlawful discrimination. Conversely, if employers offer enhanced pay for both maternity leave and shared parental, will mothers be entitled to take paid maternity leave and then enhanced shared paternity pay or can the two be set off against each other? Any employers considering reducing existing levels of enhanced pay will need to consider whether those payments have become a contractual entitlement.

The key issue is whether an employer that enhances maternity pay would discriminate against men if it fails to provide a similar level of enhancement for shared paternity pay. Certainly, there is no express entitlement under the draft Statutory Shared Parental Pay (General) Regulations 2014 to pay in excess of the minimum entitlement and no express obligation to mirror any existing enhanced maternity pay and the government is clearly of the view that this is not required.

The technical guidance states that an occupational maternity or paternity scheme may continue and not be extended to shared parental leave, but a mother and father, or mother’s partner, must be on maternity and paternity leave, not shared parental leave, to benefit from occupational schemes. This is reflected in the scheme for statutory pay where the guidance confirms that the first six weeks of higher rate statutory maternity pay is not transferable to shared parental pay.

It has been predicted that the new scheme could cost employers as much as £17 million in the first year alone. For employers it is hoped that these costs will be reduced in light of the perceived lack of interest from expectant fathers. However employers must still be mindful to avoid discriminating against those fathers that do take up the option when considering payment of shared parental pay and any other associated maternity benefits afforded to mothers, adopters or primary care givers.

Please contact Daniel Wilde, Head of our Employment Department to discuss further 01633 244233 or email wilded@hevans.com