APPENDIX 11
Memorandum submitted by The Fawcett Society
(PL 9)
SUMMARY
This memorandum covers the following issues:
— Parental Leave—why have parental
leave.
— Why pay parental leave?—the
case for paying parental leave.
— Unpaid Parental leave—the case
against.
— How should parental leave be paid?—why
it should be earnings related.
— How can parental leave be paid for?—why
it should be a three way partnership.
— How long should parental leave be?—why
it should be three months non-transferable and paid and up to
24/36 months at a reduced rate, and why it must be fully flexible.
— Other issues—those without
children, small employers and qualifying periods.
1. PARENTAL LEAVE
Fawcett welcomes the Government's intention
to adopt the European Directive on Parental Leave. We recognise
that the principles underpinning the adoption of such legislation
go hand in hand with the Government's commitment to work towards
more "family friendly" working policies. We would urge
the Government to ensure that Parental Leave is paid.
2. WHY PAY
PARENTAL LEAVE?
Evidence from European countries and other countries
where parental leave is already on offer suggests that take up
by mothers and fathers is greater when it is paid. Where parental
leave is not paid the take up is low. Parallels could be drawn
with unpaid maternity absence which in the UK has had a low take
up. Paying parental leave will give it more status in the eyes
of employers and in the eyes of parents, in particular in the
eyes of fathers. Fawcett recommends that the whole three month
period is paid.
3. UNPAID PARENTAL
LEAVE
Whilst unpaid parental leave might be useful
for those at crisis point, paid parental leave with the right
to return to your job is extremely important for women in vulnerable
or low-paid employment. Most women's incomes are now crucial to
the family income pool, even in households where both parents
are in employment.
4. HOW SHOULD
PARENTAL LEAVE
BE PAID?
Throughout Europe there are different methods
of calculating the amount that should be paid to cover parental
leave. Options include a flat-rate amount (sometimes means-tested),
a percentage of earnings, a proportion of earnings with a Government
top up, or a combination of a percentage of earnings followed
by a flat rate after a set amount of leave has been taken. Fawcett
recommends that paid parental leave should be earnings related.
We suggest that for the Directive's proposed period of parental
leave of three months (for other options see paragraph 6) the
first month should be calculated at 90 per cent of earnings and
the remaining period at 80 per cent of earnings. This makes more
sense than a flat-rate amount—which we have seen from other
"benefits" tend not to keep pace with earnings. Although
the Government would bear a substantial amount of the costs involved
it would be extremely popular with parents and would increase
take up. In practice parental leave could be paid through the
wage packet or like other tax-credits—although efforts would
have to be made to avoid a purse to the wallet transfer.
5. HOW CAN
PARENTAL LEAVE
BE PAID
FOR?
The options around suggest a number of different
ways of resourcing paid parental leave. These include parents
making contributions to a kind of "savings account",
the Government paying, employers paying or combinations of these.
Having looked at all the different options Fawcett strongly recommends
a combination approach that sees a real partnership between employers,
employees and the State. The simplest way of funding (and collecting)
this would be for employee NICs to be increased by 0.22 per cent,
employer contributions to be increased by 0.8 per cent, and for
Government to top this up with about 300.7 million( a not unreasonable
proportional increase in the Social Security Budget/Spending).
The "social savings" (and costs associated with social
exclusion and the parenting deficit) mean that the benefits of
paid parental leave would more than cover the "cost"
to the Government.
6. HOW LONG
SHOULD PARENTAL
LEAVE BE?
The directive allows for up to three months.
We would welcome the Government's comments on the possibility
of extending this further. In particular the Scandinavian models
which allow in some instances for up to three years leave over
the first eight to ten years of a child's life are worth investigating.
87 per cent of boys (MORI 1997) say they would like to be able
to spend more time with their dads. The opportunity to enable
fathers and mothers to spend more quality time with their children
especially when they are very young would mean that we would see
a gradual reversal in the effects of the parenting deficit. We
recommend that the ability to take parental leave is made as flexible
as possible for both parents.
7. OTHER ISSUES
For those without children the idea of increased
NICs to pay for parental leave they will never take may be problematic.
One possible solution to this is to enable these `credits' to
be used for a work-related or study sabbatical. This would be
in line with the government's commitment to life-long learning
and `credits' could be transferred to individual learning accounts
after set periods. One of the principle problems of parental leave
is the burden it places on small employers. A link between small
employers and the New Deal or other work experience schemes may
mitigate against this, in addition tax incentives may help. After
the introduction of the Employment Relations Bill, the qualifying
period for statutory protection in employment will be one year
(rather than the current two). Whilst we have argued elsewhere
that employment rights should start from day one, in line with
the ERB we recommend that there is a qualifying period of one
year for paid parental leave.
Elizabeth Roe
Policy Officer
May 1999
| 
