The Green Paper - Work and Parents: Competitiveness and Choice

Background

The Green Paper entitled "Work and Parents: Competitiveness and Choice" was published in December 2000. It is a consultation paper which sets out various options to make it easier for working parents to balance their responsibilities towards their employer and their family. In theory, the consultation period lasted until 7th March 2001, but this was also the date that the Government made several Budget announcements implementing some of the measures suggested in the Green Paper.

The consultation paper highlights the Government's belief that flexibility is the key to modern working arrangements. It seems that they would like to achieve this primarily by increasing the availability of part-time and variable hours working and by giving women more options in the first year after childbirth. In general, the Government seems to favour amending existing statutory provisions and gentle persuasion over radical new legislation. There is a clear attempt to appease business by emphasising that costs and red tape need to be minimised, and that there could be exceptions for small businesses. However, the paper nevertheless includes some controversial suggestions which have been widely criticised by employers.

The various options are divided into five areas, each of which is discussed further below.

• Maternity rights
• Paternity rights
• Supporting parents in the workplace
• Supporting businesses
• Encouraging flexible businesses

Maternity Rights

The background to the suggestions for improved maternity rights is research which indicates that women entitled to longer periods of maternity leave and more generous maternity pay are more likely to return to work. Options set out in the Green Paper include the following:

• Extending unpaid maternity leave so that women can stay at home for a year.
• Allowing any extension of unpaid leave to be split between the mother and father.
• Increasing the level of statutory maternity pay ("SMP").
• Increasing the period for which SMP is payable.

The last two options have already been taken up. SMP is currently paid for a period of 18 weeks at the rate of £60.20 a week (increasing to £62.20 from April this year). It was announced in the Budget that SMP will increase to £75 a week from April 2002 and £100 a week from April 2003. The period for which SMP is payable will increase to 26 weeks from April 2003.

Paternity Rights

The Government has already rejected giving fathers the same entitlement to leave and pay as women. However, the Green Paper suggests introducing a right for fathers to take paternity leave paid at the SMP rate, and this has now been implemented through the Budget. Working fathers will have the right to two weeks paid paternity leave from 2003, paid at the same rate as SMP.

Supporting Parents in the Workplace

There are a number of suggestions in the Green paper aimed at helping parents balance their work and family life more effectively. These include:

Introducing a right for mothers who return early to work reduced hours during their remaining period of maternity leave.

• Extending this right to work reduced hours during the maternity leave period to fathers (but small employers would probably be exempt from this obligation).
• Allowing women to have training whilst on maternity leave without losing SMP or maternity allowance.
• Increasing the list of emergencies for which parents can take time off (for example, to include children's routine hospital appointments).
• Increasing and improving childcare facilities.

Supporting Businesses

This section of the Green Paper looks at measures to alleviate the additional cost and administration involved in implementing any new proposals. Suggestions include:

• Simplifying the legislation on maternity leave and maternity pay.
• Changing the way SMP is paid, for example, by refunding more SMP to small employers or by the state paying SMP direct to mothers.
• Improving the information available to employers.

One of these suggestions has already been implemented in the Budget. Currently employers whose national insurance contributions payments do not exceed £20,000 can claim a Small Employer Relief when recouping SMP payments. This threshold has been doubled to £40,000, which means that many more small employers will be able to reclaim SMP costs in full.

Encouraging Flexible Businesses

The Green Paper emphasises the fact that demand for flexible working is similar for employees with and without caring responsibilities. It is argued that a backlash is therefore more likely if businesses do not offer opportunities for flexible working to everyone. Some organisations (notably the TUC and the Maternity Alliance) are pushing for a statutory right to flexible and part-time working, and officially this is still an option. However, it is unlikely that this will happen in the near future. Instead, the Government hopes to persuade employers that employees who achieve a "work-life" balance will ultimately contribute to increased profitability and competitiveness. The options set out in this section include:-

• Introducing incentives for employers to increase the spread of flexible working patterns.
• Giving employers the right to refuse a request to work reduced hours if it would harm the business.
• Introducing a voluntary code on flexi-practices which would be implemented through a kitemark scheme.
• Offering grants for small businesses to offset the costs of implementing changes.

Final Comment

There are about 50 proposals in the Green Paper aimed at helping working parents. Some have already been implemented in the Budget, and no doubt others will follow. However, in the current climate it is likely that only the options which are perceived as vote - winners will see the light of day.

For further information, please contact Amanda Sheridan by e-mail at [email protected] or by telephone on +44 (0)20 7367 2173.