Workplace Report September 2014


What new parents can expect in best pay and practice policies

The introduction of a new right in 2015 to Shared Parental Leave means that paternity and maternity policies will need to be modified in the coming months. Workplace Report examines what the best policies offer in the way of entitlements.

The present statutory entitlement to maternity leave is 52 weeks, regardless of length of service. Employees with 26 weeks service are entitled to six weeks, paid at 90% of earnings, followed by 33 weeks paid at £138.18 a week (or 90% of average weekly earnings if lower) in 2014-15.

Occupational Maternity Pay

According to a 2013 TUC analysis, only about one in four mothers receive extra occupational maternity pay from their employer. Labour Research Department’s (LRD) Payline database has about 280 collective agreements with recent maternity information — half of which are public sector.

The great majority of these agreements (84%) offer occupational maternity pay. However, very few agreements give any occupational maternity pay to employees with less than 26 weeks’ service.

Two that do are Queen’s University Belfast and defence manufacturer BAE Systems, both of which pay 18 weeks at full pay with no service qualification. BP Oil Drivers (logistics contracts) with less than 26 weeks’ service get 16 weeks at full pay – this increases to six months at full pay for staff with five years’ service.

Enhanced occupational pay was only available to employees with a full year of service in 35% of agreements. Reducing the service requirement will be particularly beneficial in sectors with high staff turnover.

Almost four out of five maternity agreements offered more than six weeks of enhanced pay. The most generous entitlements are at Ford and Rolls-Royce Motors which offer 52 weeks at full pay. The median (midpoint) is 18 weeks of enhanced pay.

About two-thirds of the agreements (63%) pay the first six weeks at 100% of pay, rather than the statutory 90%. Half the agreements (50%) offered more than six weeks paid at 100% — the median (midpoint) period was 12 weeks paid at 100%.

Relatively few improved entitlements to maternity pay have been reported since the start of 2013. The Usdaw retail union negotiated improved maternity pay with Tesco, a very significant employer of female staff. Occupational maternity pay was increased in stages between October 2013 and April 2014 from eight weeks up to 12 weeks and will increase up to 13 weeks in October this year and then to 14 weeks in April 2015.

At rail group Greater Anglia, occupational maternity pay increased from 6 weeks full pay and 20 weeks half pay to 12 weeks full pay and 14 weeks half pay. Meanwhile, home delivery group Expert Logistics, which previously had no occupational maternity pay, introduced it for staff with three years’ service (six weeks at full pay, followed by 12 weeks at half pay).

In the public sector, the NHS Agenda for Change occupational maternity entitlement for staff with one year’s service is eight weeks at full pay followed by 18 weeks at half pay.

The Local Government Green Book occupational maternity entitlement is six weeks at 90%, followed by 12 weeks at 50%, for staff with one year’s service.

Fire Service (Grey Book) entitlement is the same as the local authority Green Book. School teachers with one year’s service, are entitled to four weeks at 100%, followed by two weeks at 90%, then 12 weeks at 50%. Police officers with 63 weeks’ service are entitled to 18 weeks at full pay.

These are minimum entitlements. A good example of an agreement which improves on the Green Book entitlement is Edinburgh City Council where staff with 26 weeks’ service can take up to 63 weeks maternity leave, the first 14 weeks of which are paid at 100%.

At Shropshire Fire and Rescue the occupational maternity entitlement for staff with one year’s service is 26 weeks at full pay, followed by six weeks at half pay.

In higher education, occupational maternity pay varies — Birkbeck, University of Manchester, University of Oxford and the University of Southampton have 26 weeks paid at 100%. Many universities offer staff flexibility between taking a period of leave paid at full pay or taking a period twice the length paid at half pay.

Entitlements to occupational maternity pay also vary in the civil service — the best entitlement on LRD’s Payline is at the Department for Culture, Media and Sport, where staff with one year’s service get 39 weeks at full pay.

In further education, the best paid entitlement on Payline is at Weymouth College, which pays four weeks at 100%, followed by two weeks at 90%, then 12 weeks at 50%.

Elsewhere in the public sector, employment relations service Acas, the Bank of England, National Assembly for Wales and Network Rail all give 26 weeks paid at 100%.

Occupational maternity pay varies greatly in the private sector. On Payline just over a quarter (27%) of private sector agreements do not offer any occupational maternity pay. Half (51%) pay the first six weeks at 100% of pay. The table below shows the private sector agreements paying 14 weeks or more at 100% of pay.

Some of the most generous entitlements are in male-dominated industries, where good maternity pay is seen as a way of getting a better gender balance in the workforce.

Occupational maternity pay

Agreement Service requirement Weeks at 100% of pay
Ford (manual) 26 weeks 52
Rolls-Royce Motor Cars n/k 52
Babcock Intn’l Marine & Tech Div (Rosyth) 26 weeks 26
BP Oil Drivers (Logistics contract)* 5 years 26
Eaton Electric 26 weeks 26
Rolls-Royce Submarines (Derby) 26 weeks 26
Amnesty International UK 26 weeks 26
AXA UK 26 weeks 24
First Capital Connect 1 year 22
Save The Children Fund 26 weeks 21
British Psychological Society (BPS) n/k 20
Meggitt Aircraft Braking Systems 26 weeks 20
Atradius 1 year 18
BAE Systems none 18
BASF (Bradford) 1 year 18
Spirit Aerosystems (Europe) 26 weeks 18
EMAP Public Sector 1 year 16
Chiltern Railways n/k 15
Prudential (UKIO) 26 weeks 15
Association of Chartered Certified Accountants 26 weeks 14
Heathrow Express 26 weeks 14
Nationwide Building Society 26 weeks 14
Thames Water n/k 14

* Also pays 16 weeks with no service requirement

Paternity Leave

The statutory entitlement to paternity leave is one or two weeks paid at £138.18 a week (or 90% of average weekly earnings if lower), for employees with 26 weeks’ service (Ordinary Paternity Leave).

Unfortunately, many fathers do not take any paternity leave. In a recent survey of employers by Norton Rose Fulbright, a quarter (26%) of respondents reported that in their organisation the vast majority of employees eligible for ordinary paternity leave do not take it — less than two in five (38%) of respondents paid occupational paternity pay.

On the other hand, a recent survey by XpertHR found that over half (52%) of respondents did pay occupational paternity pay.

While there may be issues of organisational culture which can discourage men from taking paternity leave, the low rate of statutory paternity pay is the most obvious cause for the low take-up of paternity leave. According to the 2013 TUC analysis, better paid fathers are 50% more likely to take paternity leave than those on lower incomes, so getting good occupational paternity pay is particularly important in lower paying sectors.

Occupational Paternity Pay

Payline has about 280 agreements with recent paternity information — three-quarters (75%) pay occupational paternity pay. Occupational paternity pay is mostly paid at 100% of pay, but the number of days of enhanced pay varies.

The most generous entitlement is at the City and Guilds of London Institute, which pays 20 days at 100%. The Homes and Communities Agency, National Assembly for Wales, Natural England, Queen’s University Belfast, and Serco (Docklands Light Railway) all pay 15 days at 100%.

Over a third (36%) of agreements paid 10 days at full pay and three in 10 (29%) paid five days at full day.

The majority (72%) of agreements for which service requirement is known required 26 weeks’ service to qualify for occupational paternity pay. Most of the agreements which do not have a service requirement were in higher education.

Relatively few improved entitlements to paternity pay have been reported since the start of 2013. At Greater Anglia, Expert Logistics and Scottish Midland Co-op occupational paternity pay has been increased to two weeks at full pay.

Negotiators wanting to compare entitlements to maternity and paternity pay will find LRD’s Payline dabase a useful resource. For information on how readers to access the Payline, see the back page of the magazine.

Additional Paternity Leave

Since 2011 mothers have been able to share between two and 26 weeks of their statutory maternity leave with their partner — known as Additional Paternity Leave (APL).

APL cannot start until the 20th week after the child’s birth and the mother has to return to work before their partner can take APL. The employee taking APL is required to have 26 weeks’ service.

APL is paid at the same low rate as statutory maternity and paternity pay, £138.18 a week (or 90% of average weekly earnings if lower) for 2014-15. Pay stops when the mother’s maternity (or adoption pay) would have ended.

Take-up of Additional Paternal Leave has been very low. In 2011-12, only 0.6% of eligible fathers took any APL. Take-up has only increased slightly since then — in 2013 1.4% of eligible fathers took some APL.

A recent XpertHR survey found that three-quarters of employers had not had any employees take APL. And a recent Norton Rose Fulbright survey similarly found that no employees at two-thirds (67%) of respondent organisations had taken APL and a further one in five (22%) said that only a very small number had done so.

Government advice is that it is not necessary to enhance the pay for APL to the same level as maternity pay. A recent tribunal case at Ford Motor Company where occupational maternity pay is full pay for 52 weeks and APL is only paid at the statutory rate considered whether this was discriminatory (see box below).

Ford case over Additional Paternity Leave

The legality of paying Additional Paternity Leave (APL) at a lower rate than maternity leave was tested at a recent tribunal case (Shuter v Ford Motor Company). Ford pays women on maternity leave 52 weeks at 100% of basic pay, while paying men on APL at the statutory rate.

Ford argued that the policy was justified as a part of their long-term plan to increase the proportion of women in their workforce. The company presented detailed statistical evidence to back up its argument. The tribunal accepted Ford’s argument.

LRD contacted workplace reps about the impact of APL at their workplace — none thought that it had had much impact.

The government seems to share this assessment and is replacing the right to Additional Paternity Leave with a new right to Shared Paternity Leave.

Shared Parental Leave

Shared Parental Leave (SPL) will apply for babies due/adopted from 5 April 2015.

Shared Parental Leave allows more flexibility to couples in how leave is shared. The mother must take a minimum of two weeks’ maternity leave following the birth (four if she works in a factory) but the remainder (up to 50 weeks) can be taken as SPL by either or both partners.

Both partners can take SPL at the same time. Each partner can make three requests to their employer for a block of leave. They can request either a continuous block, or a discontinuous block of leave – an example of a request for a discontinuous block of leave would be an employee requesting to take six weeks of SPL by working every other week for a 12-week period. An employer must accept a request for a continuous block of leave, but can refuse a request for a discontinuous block of leave.

Statutory Shared Parental Pay (SPPL) will be paid at the same low rate as Statutory Maternity Pay (SMP) after the first six weeks. There is no entitlement to 90% of pay during SPL, so mothers in receipt of SMP will not be able to convert the first six weeks of maternity leave to SPL without financial loss.

The big unknown at the moment is to what extent employers will enhance Statutory Shared Parental Pay. More employers have said that they intend to pay SPL at a higher rate than they paid APL.

Almost a quarter (23%) of respondents to the Norton Rose Fulbright survey said that their organisation intended to pay SPL at the same level as they paid Occupational Maternity Pay. Three in 10 (30%) said that they would continue to pay Occupational Maternity Pay but would only pay SPL at the statutory rate. A few (2%) of respondents said that they would stop paying enhanced maternity pay.

The government view is that employers who pay maternity at above the statutory rate are not legally required to pay SPL at higher than the statutory rate. It seems inevitable that those employers who enhance maternity pay but do not enhance pay for SPL, will at some point face a legal challenge.

The government expects that around 285,000 couples will be eligible to share leave from April 2015. The changes to parental leave have not been well publicised as yet: a recent survey of 1,000 parents for Good Care Guide found that 65% of parents were unaware of the changes. And many employers are not yet prepared for SPL — three quarters (76%) of respondents to the Norton Rose Fulbright poll said their organisation had taken no actions to prepare for SPL.

New and prospective parents will not be in a position to decide whether to take advantage of SPL until they know how it will operate in their workplace and crucially at what rate it will be paid. LRD contacted reps and none reported that discussions had taken place with their employers on the rate at which SPL would be paid.

Workplace reps will want to ensure that employees are well informed about how SPL will work. The rules on notifying employers are quite complex. Information is available on the website and the emloyment relations service Acas website. LRD will also be publishing a new booklet on leave and pay for working parents this October.

The government estimates that take-up of SPL will be between 2% and 8% of those eligible to do so. Given the low statutory rate of pay for SPL, higher take-up SPL is likely to depend on negotiators’ success in getting a high rate of pay for occupational pay during SPL, as so many have done for both maternity and paternity leave.

How Nordic countries get men to take parental leave

The Tavistock Institute has compared the impact of different systems for transferable leave in many countries and concluded that the introduction of SPL will have little effect, as most men do not take paternity leave if it is poorly paid and transferable leave is generally taken by the mother

The countries that have been most successful in getting fathers to take parental leave have introduced a well-paid non-transferable allocation of leave for fathers.

In 1995, Sweden introduced a “daddy month” and the proportion of fathers taking a month or more of leave increased from 9% to 47% – parental leave is paid at 80% of previous earnings.

Iceland in 2000 introduced a system where each parent gets three months of non-transferable leave and the remaining three months are transferable. Parental leave was paid at 80% of previous earnings, although the financial crisis led to cuts in payment levels. Fathers on average take 100 days of leave. A 2012 report on gender equality in Iceland concluded that the policy resulted in closer father/child relationships and more equality between men and women at work.

Perhaps the government should take a look at how they cover parental leave in the Nordic countries (see box above).