Use Of Annual Leave Will Continue To Be Most Attractive Option

Labour’s plans to  double the paid paternity time fathers can take off to four weeks will have little impact on moderate and high earners says a leading employment lawyer.

The boost is Dubbed ‘Father's Month’ , the proposals would allow working dads to take up to four weeks of paternity leave after up to 56 days after the birth of their child.

In addition to the four weeks, fathers will be paid £260 a week rather than the current £138.18 a week.

The initiative is expected to cost the taxpayer at least £150 million a year and Labour say this will be offset by savings in tax credits from extending free childcare.

British Chamber of Commerce Director General John Longworth said: "Although well-meaning, proposals such as this create very real costs for businesses, which can in turn lead to reduced productivity, reduced growth and fewer jobs.  Businesses have already had to absorb over half a dozen changes to parental leave in the last decade - with one, shared parental leave, not even fully in place yet. This constant instability raises costs for business and generates uncertainty when it comes to taking on new staff."

The National Chairman of the Federation of Small Businesses, John Allan, said: "Businesses will have legitimate concerns about these proposals and it's important political parties understand the practical implications of policy changes. The reality is that for small businesses in particular, extending paternity leave from two to four weeks makes it much more likely that they will have to buy in replacement staff as they will struggle with absences. That's a cost that some firms will struggle to afford."

Expert Opinion

“This proposal certainly has the potential to increase the uptake of paternity leave, but for modest and high earners it is unlikely to make much of a difference. If paternity pay doesn’t mirror the existing statutory maternity pay arrangements, the evidence suggests that the father's use of his annual leave allowance to care for his child will be more attractive.

“Although some businesses will be concerned about the impact, it should be remembered that the increase in paternity pay to £260 a week will be paid for by the Government. Companies could potentially be without staff for longer, but typically employees who feel that they have been treated fairly after the birth of their children tend to be more loyal. The longer term financial benefits therefore could be greater.”
Glenn Hayes - Partner & National Head of Employment Law