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Employers uneasy over changes to shared parental leave

New Government plans will see an overhaul of the regulations governing parental leave following the birth of a baby.

Business groups, however, have voiced concerns over the proposed changes.

At the moment, mothers are allowed six weeks of maternity leave at 90 per cent of their earnings. They can then take another 33 weeks off work at the statutory maternity leave pay of £128.73 a week. If they so choose, they can add another three months of unpaid leave.

Fathers, on the other hand, can take two weeks of paid leave. Since April, men have been allowed to assume home care responsibilities for six months of any unused maternity leave should the mother opt to return to work after the baby is 20 weeks old. But that leave can only be taken as a single block.

The new plans mean that the mother will be entitled to 18 weeks of paid maternity leave following the birth of the baby.

However, a subsequent 30 weeks' leave, of which 17 weeks would be paid, can then be divided between the two parents and, if it is requested, the leave could be segmented into blocks of weeks and months rather than taken as a continuous period of time.

What's more, both parents will be granted an extra four weeks of paid parental leave, taking the father's automatic entitlement to six weeks in total.

One consequence is that fathers could have five and a half months of paternity leave available to them.

Commenting on the planned changes, which are due to come into effect in 2015 but first go out to consultation, Vince Cable, the Business Secretary, said: "Our proposals will encourage greater choice by giving employees and their employers the flexibility to find arrangements to suit them both.

"New parents should be able to choose their childcare arrangements for themselves, rather than being dictated to by rigid Government regulation as is currently the case. And employers should be encouraged to come to agreement with employees on how work and family responsibilities can be met simultaneously.

"These measures are fairer for fathers and maintain the existing entitlements for mothers - but crucially give parents much greater choice over how to balance their work and family commitments."

Mr Cable emphasised that the Government has been mindful of minimising the costs and bureaucracy to business. As a result, employers will still be able to take into account their needs when agreeing how leave can be taken.

But the Minister added: "I'm also confident that we have a good case to make on the wider benefits to business - not least from a motivated and flexible workforce and we will be making this case to employers over the next few years before these changes are introduced."

Business groups, though, expressed anxieties over the impact of the changes, particularly in the case of smaller firms.

Katja Hall, the CBI's chief policy director, argued that any reforms need to be judged in the context of job creation and economic recovery.

Ms Hall commented: "Employees and employers often informally agree working patterns that suit both parties, and the Government is right to look at ways of encouraging this by removing unnecessary bureaucracy.

"Parental leave should be open to both parents, be simple to administer and allow employers to reject complex patterns of leave."

She added a caveat: "We are concerned by proposals to increase the total period of parental leave by another four weeks, given the UK already offers some of the most generous provisions in the world."

John Walker, national chairman of the Federation of Small Businesses, was more outspoken in his worries: "The Government has committed to reducing the amount of red tape that small firms have to wade through in running their businesses. Yet, it wants to introduce additional complexity and new legislation, making it even more complicated and time consuming in the process.

"For a small firm, organising cover and workloads for a member of staff that has decided to take chunks of parental leave from work - not a continuous period of time - will be extremely burdensome and difficult to administer.

"Small businesses already provide flexible working for their employees and so we would urge the Government not to formalise this process as it would just add to the red tape burden on small firms.

"The Government is looking towards the private sector to lead the recovery but with many businesses already wary about taking on staff, there is a danger that changes to these rules could add to their concerns."

David Frost, the director general of the British Chambers of Commerce, echoed the unease that the changes would create among the small business community.

Mr Frost said: "For months, the government has promised a war on red tape and a focus on creating the right conditions for business growth. Yet the proposed changes to parental leave are at odds with the growth agenda.

"Lengthening the amount of time parents can take as paid leave, and inviting them to negotiate time off with employers, just creates more confusion and costs for business owners. The proposals look to allow more flexible parental leave, but will lead to uncertainty and expose employers to endless appeals, legal challenges and grievances.

"While businesses try to get to grips with the changes to parental leave introduced just last month, the government is already consulting on a new system. When will it stop?"

Jackie Orme, chief executive of the CIPD, welcomed the proposals but voiced a warning about their workability: “We believe that parents should be required to take leave in reasonable blocks of time – no shorter than two weeks – if the employer is not to be subjected to unreasonable burdens.

“And we’ll be looking for reassurance about the adequacy of HM Revenue and Customs IT systems to eliminate unnecessary bureaucracy that might be associated with the administration of these proposals.”

The consultation can be found at http://discuss.bis.gov.uk/modernworkplaces/