Government reforms (1): Family friendl(ier) – shared parental leave and pay

We’ve told you about the Government’s and ACAS’s guidance (available here and here) on shared parental leave. However, given its imminent arrival on 1 December 2014 we thought it was time to provide you with our own bespoke guide. Particularly since the new rules apply to babies due on or after 5 April 2015, which means that employees who are currently three months pregnant or less are going to ask questions soon, if they haven’t already. So here are some of the answers to their, and your, questions:

Why is it being introduced?

The Government wants to give families greater flexibility when deciding who will take time off work to look after their new baby. The aim is to encourage shared parenting from the earliest stages of pregnancy and move away from the assumption that women will be the carers and help to avoid discrimination against women.

What is shared parental leave?

Shared parental leave is a completely new right for parents. This is not an amendment to any previous family friendly right but a whole new approach.

Shared parental leave replaces additional statutory paternity leave. However, it does not replace other forms of family friendly rights. It runs alongside rights to maternity leave, adoption leave, ordinary paternity leave and ‘normal’ unpaid parental leave.

The new system will allow qualifying parents to share between them up to 50 weeks of leave from the birth of their child until its first birthday. Parents can be off work at separate times or together and can each take up to three separate blocks of leave or use it up in one go. However, each period of leave must last no less than a week.

Who is eligible?

The following staff are eligible for shared parental leave:

• mother or father of a child with an expected week of childbirth (or placement for adoption) on or after 5 April 2015;

• person who is married to, or the civil partner or the partner of, the mother/ the adopter – providing they are in an enduring family relationship and not a close blood/adoptive relative.

One of the parents must also:

• be an employee (rather than, for example, a contractor or casual worker);

• have been continuously employed for 26 weeks by the 15th week before the expected week of childbirth (or the week a match for adoption is notified); and

• still be employed the week before any period of shared parental leave.

Both parents must:

• have, or expect to have, the main responsibility for care of the child together with their partner; and

• at least be an employed or self-employed earner in 26 of the 66 weeks immediately before the expected week of childbirth (or placement for adoption), earning not less than £30 per week on average. (This is the same as the test of economic activity for maternity allowance).

This means that only one of the parents needs to be an employee. For example, where a father is an employee, but the mother is self-employed or recently unemployed, the mother has no maternity leave or shared parental leave entitlement herself, but will qualify for maternity allowance. By curtailing her entitlement to maternity allowance (see below), the mother will be able to give the father access to the shared parental leave scheme, meaning he can take a period or periods of shared parental leave.

If only one parent in a couple is eligible to take shared parental leave, they will not be able to share the leave with their partner.

Even if both parents are eligible, in some cases a parent may take shared parental leave and choose not to share it with their partner. For example, a mother may choose to do so as an alternative to maternity leave as shared parental leave would allow her to take leave in blocks rather than as one continuous period of maternity leave.

Shared parental leave can be taken by both partners at the same time. It can also be taken by a partner at the same time that the mother is on maternity leave provided that she has given notice to curtail her maternity leave in the future.

How does shared parental leave work?

If an employee is eligible for shared parental leave then they can access their entitlement as follows:

1. Cut short Maternity Leave and Pay: The mother must curtail her maternity leave and commit to sharing the untaken balance of her maternity leave and pay with her partner. She can do this by:

• returning to work
• giving at least eight weeks’ written notice to curtail her maternity leave and pay at a specified point in the future (‘curtailment notice’); or
• if she is not entitled to maternity leave (for example she is self-employed) ending her maternity pay or allowance.

2. Notice of entitlement: Both parents need to give their employer a ‘notice of entitlement’ and intention to take shared parental leave. However, this is non-binding at this stage and is to enable employees to start discussing their intentions with their employer. In practice, the mother will likely give her employer this notice at the same time as any ‘curtailment notice’ under point 1 above.

The notice provided should include:

• the names of both parents who wish to use shared parental leave
• the start date and end date of maternity leave;
• the balance of maternity leave and pay which remains, and the date the baby was born (or is due);
• how much shared parental leave each partner proposes to take;
• a non-binding indication of when the employee intends to take their portion of the leave; and
• a declaration by both parents that they meet the qualifying conditions, agree to the division of leave and pay, and agree to information being processed by the employer.

Once an employer has received the notice, there is no obligation for the employers of each parent to liaise with one another in relation to the leave. However, the employers can request further evidential information from their employee, including a copy of the baby’s birth certificate and the name and address of the mother’s/partner’s employer, which the employee must then provide.

Both parents can vary this notice of entitlement and intention to take shared parental leave as many times as they like. This could include changing the proportion of leave each parent intends to take.

3. Period of leave notice: In order to take shared parental leave, an employee must give notice that he/she wishes to take a period of leave at least eight weeks before the first period of leave set out in that notice is due to start. An employee can book more than one period of shared parental leave in one notice. However, there will be a cap of three notices to book or vary shared parental leave (with some exceptions) unless the employer agrees to more.

Both parents must sign and give their employers the following specified information within the notice:

• proposed leave dates;
• a declaration of eligibility to shared parental pay;
• the full amount of shared parental pay available;
• how shared parental pay will be split between the parents; and
• the period(s) during which the employee giving the notice intends to claim shared parental pay.

If the employee requests just one continuous period of leave in their notice then they can take that period of leave as of right. However, if the notice specifies that the employee wishes to take a discontinuous block of leave, the employer has two weeks to accept, propose alternatives or refuse it. If refused the employee may either a) withdraw the notice within the following two days and the request will not count towards the cap of three notices to book, or b) choose to take the total amount of leave requested as a continuous block.

Ultimately, however, it is in the employee’s gift to take leave in up to three discontinuous blocks even without the employer’s agreement. All they have to do is serve separate notices in respect of each discrete block of leave.

Employees can vary or cancel a period of leave. They can:

• change the start and/or end date; or
• request to change from a continuous period of leave to a discontinuous pattern.

Generally, notice to vary or cancel a period of leave must be given at least eight weeks prior to both the original start date of the leave and any varied start date.

How much money?

In order to qualify for shared parental pay, the employee must satisfy the same normal weekly earnings test applicable to statutory maternity/paternity pay.

The rate of statutory shared parental pay will be the same as statutory maternity/paternity pay – currently a maximum of £138.18 per week or 90% of the employee’s average weekly earnings, whichever is lower.

If, however, you pay enhanced maternity pay during any period of maternity leave you need to carefully consider how you will deal with periods of shared parental leave and pay. If you do not pay employees taking shared parental leave the same enhanced rate of pay, it is possible that male employees may bring Tribunal proceedings complaining that this unequal approach is discriminatory.

What happens during shared parental leave?

• Shared Parental Leave in Touch (€œSPLiT€) Days: Both parents will be allowed up to 20 optional ‘keeping in touch’ days each during shared parental leave. This is in addition to the 10 KIT days allowed during maternity and adoption leave. The SPLiT days will enable employees to work on up to 20 days (per employer if a parent has multiple employers) without bringing to an end their shared parental leave or pay.

• Terms and Conditions: Similar to maternity, adoption and paternity leave, during shared parental leave, an employee will be entitled to the benefit of all of their existing terms and conditions of employment other than terms relating to pay. Therefore employers will need to continue to provide non-cash benefits during shared parental leave.

• Protection in redundancy situations: If an employee’s role is made redundant while they are on shared parental leave, then that employee must be given a right of first refusal on any suitable alternative vacancy. This rule could potentially be open to abuse as employees could time shared parental leave to gain greater protection in a redundancy situation.

What should employers be doing now?

The most important task is for employers to become familiar with how shared parental leave works and consider how this impacts your organisation and how you will roll it out.

Employers should:

1. Develop and roll-out a shared parental leave and pay policy, including:

• considering any enhancements to the statutory leave and pay; and
• precedent forms for notice of entitlement and period of leave (as described above);

2. Review and update other policies and procedures impacted by the change. These could include:

• Maternity Leave;
• Paternity Leave;
• Adoption Leave; and/or
• Disciplinary Policy (to cover the provision of fraudulent information regarding shared parental leave);

3. In particular employers should review any enhanced maternity pay policy you may have, to decide whether you are also going to offer it to the partner of a mother who takes shared parental leave and, if not, whether you have thought through the sex discrimination risks of not doing so (as described above).

We would strongly recommend that you contact us for advice on any enhanced maternity pay policy you may have and how it needs to be reviewed at this time.

4. Train managers on the changes, employee rights and employer obligations.