IMploy | Is your organisation ready for shared parental leave and pay?

Is your organisation ready for shared parental leave and pay?

From April next year, new parents and adopters will have an opportunity to share up to 52 weeks’ leave between them and up to 37 weeks’ pay, in a way which best suits their families, via a new right called shared parental leave (“ShPL”) and shared parental pay (“ShPP”).

Eligible parents will be able to take time off together to care for their child, transfer leave to their partner, and return to work in between leave periods during the child’s first year. The scheme will potentially offer parents a huge amount of flexibility, but to achieve this, the rules are highly complex and are likely to create a headache for most HR departments. 

Employers must understand this new regime otherwise they will not be able to respond to requests from their staff to take ShPL which can be made from 1 December this year. 

Shared parental leave is optional

It is important to understand that parents do not have to take ShPL. It is entirely optional and those who do not ‘opt in’ will still benefit from existing family friendly rights such as maternity, adoption and paternity leave (although additional paternity leave is being abolished and will only be available for those whose babies are due before 5 April 2015). Employers are required to offer and to run parallel systems.

Employees do not have to make a decision about whether they wish to take ShPL before their baby is born or their adoption takes effect. Instead, they can start maternity or adoption leave and then decide to convert any remaining leave to ShPL at a later date. 

ShPL is only available to eligible parents whose babies are due on or after 5 April 2015, or to adoptive parents who have a child placed with them on or after this date. With regard to birth, parents can still take ShPL even if their baby is born before 5 April as the trigger for eligibility is the due date, not the actual birth date. 

Who is eligible?

Only employees can apply for ShPL. To qualify, your employee must have been continuously employed for at least 26 weeks before the 15th week before the baby is due and must remain so. The co-parent must also be ‘economically active’ which means that they must have worked (although not necessarily as an employee) and earned a minimum amount over a qualifying period. So, if your employee is the sole bread winner, he/she will not be eligible for ShPL.

Your employee may also be eligible to receive Shared Parental Pay (“ShPP”) for up to 37 weeks, provided she has earned not less than the lower earnings limit in the relevant period. However, ShPP will only be paid if there is any remaining statutory maternity or adoption pay that would otherwise be available which can, subject to certain rules, be transferred to the other parent or utilised by the primary carer. 

Statutory maternity pay is currently 90% of pay for the first 6 weeks of maternity leave and then 33 weeks at a flat rate (currently £138.18 per week). Note, however, that ShPP is paid at the flat rate only. Therefore women requesting ShPL in the first 6 weeks of their maternity leave would lose out on the enhanced element of statutory maternity pay. 

Another point to consider is whether any contractual maternity pay would still be payable if an employee exercises their right to take ShPL. Employers should take specific legal advice on this issue as some employees may argue that withdrawing contractual maternity pay amounts to unlawful discrimination.

Notification requirements

An eligible mother who wants to take ShPL, or enable her eligible partner to take it, must end her maternity or adoption leave. She can do this by returning to work before the end of her maternity leave period, or by giving notice that she intends to end it at a future date. The employee will be bound by her notice unless it was served before the baby was born, or the child’s father has died. Once a mother has returned to work, she cannot revoke ShPL. 

Your employee must give you at least 8 weeks’ written notice when she wishes to book leave. This must be signed by the eligible co-parent. 

Your employee may only give you three notices to book leave or to vary a previously agreed pattern of leave, unless you agree to extend this. This means that employees must carefully consider the arrangements they need if they are to avoid ‘wasting’ a notice.

Do you have to agree to the leave periods requested?

Employees who ask to take a single block of leave are entitled to take it. However, if your employee asks in a single notice to take leave in different blocks (for example, two weeks in June, three weeks in September etc), you do not have to agree to it. Instead, you have two weeks to discuss the pattern of leave and suggest alternatives. If you refuse, your employee has the right to take the amount of leave as a continuous period, but is not obliged to do so. 

However, it appears that an employee will still be able to take leave in up to three discontinuous blocks by serving three separate notices in respect of each discrete block of leave, provided they have not already used up all of their three leave notices. 

Is there any help available to understand this?

The rules are a good example of how a simple and laudable concept (sharing the responsibility for child-rearing) can become fiendishly complex when put into practice. 

The Government has recently published guidance on ShPL and ACAS has also produced a guide which businesses may find useful. However, due to the complexities of the rules and the interaction with your own policies, specific legal advice is likely to be necessary to ensure your policies are compliant and you avoid discrimination claims arising from a misapplication of the new rules. 

Despite the complexities, however, with early planning and clear policies, businesses should be able to implement successful shared parental leave policies in time for 1 December 2014.