Select Committee on Social Security Appendices to the Minutes of Evidence


Memorandum submitted by GMB (PL 10)

  1.  GMB—Britain's General Union—has over 700,000 members, of whom over 36 per cent are women. Half of those recruited into our union last year were women. Our members are employed in areas as diverse as local government, retail, hotel and catering, administration, call centres and manufacturing.


  2.  GMB supports statutory payment for parental leave because:

    —  It would enjoy substantial popular support.

    —  Take-up would increase.

    —  Most employers will not pay. The effect of leaving payment to employers is that the benefit would reach some employees and not others (eg temporary staff, lower skilled/graded staff). This will be unfair on both employees and employers who are not able to pay, but wish to attract and retain staff.

    —  Families will find it hard to make ends meet if parental leave remains unpaid.

    Those women who could afford to take unpaid leave, or those who had no option given their domestic circumstances would suffer from a fall in earnings will fall and this will add to gender inequality.

    —  Fathers' take-up depends heavily on payment.

    —  Paying for parental leave is a sign of a modern, forward looking government. It would put the UK in step with the approach adopted by our European partners.

    —  Payment is worthy of government investment as an integral part of the National Childcare Strategy: sometimes parents are the most appropriate carers, and they should be helped in this role.

  1.  Any system of pay should be government financed. We would oppose a statutory system for parental leave where employers were not reimbursed for payment. Payment should reach a good proportion of working mothers and fathers. The low paid must be covered. It should be simple to understand and have a good fit with existing benefits especially maternity pay. Our preference is for payment at a high proportion of average individual earnings, if necessary limited by an upper earnings limit.

  2.  We feel strongly that parental leave should be introduced in such a way as to open the door to future payment.


  3.  A 1995 survey of GMB members by the Industrial Relations Research Unit at Warwick University found that nearly half of our women members and a quarter of male members thought that better maternity leave and pay was a very important collective bargaining priority. Thirty per cent of men and 34 per cent of women members thought that paid paternity leave was an important collective bargaining priority. Paid parental leave would enjoy popular support which is necessary to make parental leave a practical proposition.

  4.  Parental leave has been part of GMB's negotiating agenda for many years. As we fed into the social partnership negotiations at European level, we gave information to our workplace representatives and negotiators, to increase understanding of the new entitlement and to influence negotiated leave. At the same time, we have continued to call for more paid maternity, paternity and special leave.


  5.  Various surveys show that between thirty and fifty per cent of workplaces have agreements covering paid paternity leave. These tend to be large union organised workplaces, often in the public sector. Paternity leave usually lasts for 3-5 days, but can last for two weeks, which is the GMB target length. It is usually paid at full average or basic pay and provided to those on all grades.

  6.  Paternity leave has a high take-up and is popular among new fathers (and mothers). There is no backlash from members without children. The culture has certainly changed since Michael Portillo's comments in September 1994 during the negotiations over parental leave, when he said "I would take a bit of my paid holiday at that time [to be with a new baby]. I don't think even under those circumstances I would want to put my company in a difficult position." Even at that stage, when there was no statutory right to paid holiday, this did not reflect British culture and practice: paternity leave was widespread and popular.


  7.  Negotiating additional paid maternity leave can be more difficult. Many employers agree to provide extra leave. Some will top up higher rate Statutory Maternity Pay from 90 per cent of earnings to 100 per cent, and a few go further and top up lower level SMP as well. The 1997 PSI study "Maternity Rights and Benefits in Britain 1996" found that extra-statutory maternity benefits were offered by just 11 per cent of a representative sample of employers employing 30 per cent of women employees. These establishments tended to be larger, public sector, and trade union organised. Only six per cent of all establishments gave additional maternity pay.


  8.  We also have a number of agreements covering special leave, which is paid in certain circumstances. There is often a degree of management discretion in such agreements: pay is relatively common for bereavement and extreme emergencies, but is less likely to be paid for incidents which are not seen as emergencies. Where it is discretionary, the possibility of unfair treatment creeps in.


  9.  GMB has long had a negotiating target of three months paid parental leave. We have had some success in negotiating parental and adoption leave schemes, particularly in local government, but also in the private sector, eg in ASDA stores where it has proved useful in reducing turnover amongst a female dominated workforce. However negotiating payment during this leave has proved extremely difficult.

  10.  In British Gas, a 1991 agreement provided for an unpaid career break for family reasons for both men and women. In Transco and British Gas Service, both male-dominated, our activists report a low take-up by women but were unable to find any significant take-up by men.

  11.  We shall continue to press for payment, and anticipate that the commencement of statutory parental leave will provide us with good opportunities to raise the issue. But we conclude that most employers will not pay. The effect of leaving payment to employers is that the benefit would reach some employees and not others and this will be unfair on both employees and employers who are not able to pay, but wish to attract and retain staff. Larger employers are more likely to pay. Some of these may be attempting to attract or retain women in key jobs, and will therefore not provide the benefit across all grades, adding to inequality. Temporary, contract and possibly part time staff will lose out. We are also aware that there will be more pressure for payment in female dominated workplaces, and that employers may feel that this is an unfair burden.

  12.  Because of the danger of increasing discrimination against women and against parents of young children, we would oppose a statutory system for parental leave where employers were not reimbursed for payment, even if their national insurance payments were reduced. We have experience of very harsh absenteeism policies introduced as a result of the change to this method for statutory sick pay. We agree with the aim if not the methods of reducing sickness and resulting absenteeism. In contrast, parental leave taking should be increased. However we would wish to consider further the implications of such a system for domestic incidents/family emergency leave.

  13.  As a general union, we represent members across all grades. Some are in skilled, supervisory or management occupations, but most are relatively low paid. They may receive in-work benefits and/or the new Working Families Tax Credit (WFTC).

  14.  We are concerned that if our low paid members take unpaid leave, then families will find it hard to make ends meet. These are often the families who are working longest hours, receive shorter periods of annual leave, are less able to afford childcare and are most in need of the flexibility that parental leave brings. If leave is taken during the calculation period for WFTC, then earnings will be topped up. However if unpaid leave is taken at the wrong time, then there are disbenefits: mothers taking leave during the calculation period for Statutory Maternity Pay may lose their entitlement as the unpaid period will reduce their average earnings. But surely, in agreement with employers, parents should be able take leave to suit the needs of their families, not the benefits system.

  15.  Some of our members will take unpaid parental leave, because there are times when children take priority. Parental leave will give them the ability to be with their children during difficult times like serious, but non-emergency illness, or simply for childcare. We are concerned that if parental leave is unpaid, then fathers will have the economic arguments to encourage their lower paid partners to take leave, when the need arises. During this time, the women's earnings will fall and this will add to gender inequality. It will also add to employer perceptions that female workers take leave and male workers do not, and could lead to sex discrimination.

  16.  We have received enquiries from male members who want to take parental leave, but we are concerned that these good intentions may be overridden by financial considerations. We would like to see men taking parental leave, and are concerned at the DTI estimate that only two per cent of fathers will do so. We believe this low estimate to be directly the result of a lack of payment. The international evidence (eg the work of the European Commission Network on Childcare and the OECD) suggests that fathers' take-up depends heavily on payment.

  17.  Clearly take-up would improve if leave was paid. As stated above, paid paternity leave is extremely popular. The PSI study of Maternity Rights and Benefits also indicates that women return from unpaid extended maternity absence early and even return early from paid maternity leave because of the low rate of lower level SMP. "Care in Europe" a Joint Report of the Gender and Employment and Gender and Law Groups of Experts of the European Commission Directorate for Employment and Social Affairs reports very low female take-up of parental leave and almost zero male take-up.

  18.  GMB analysis of European data shows that the UK is the lowest payer of maternity and parental leave in Europe:

Maternity plus parental leave
Member State
Total leave
Equivalent weeks paid at 100 per cent


  19.  Paying for parental leave (and increasing the rate of pay for maternity leave) would be a sign of a modern, forward looking government. We welcome the National Childcare Strategy. As part of our approach to meeting the needs of working parents, we negotiate for parental leave alongside employer help towards childcare. Similarly, we believe that paying for parental leave is worthy of government investment as an integral part of the National Childcare Strategy. Sometimes parents are the most appropriate carers. They should be helped in this role.

Methods of Payment

  20.  There are a number of ways in which parental leave may be paid. We believe that it makes most sense to pay in a way which fits in with existing methods. We therefore address our remarks largely to three methods: the working family tax credit (WFTC) and pay linked to individual earnings or a flat rate like higher and lower level Statutory Maternity Pay (SMP).


  21.  GMB is a strong but critical supporter of the contributory principle. We are opposed to increasing reliance on means tested benefits because:

    —  There is a stigma attached

    —  Eligibility rules are often complicated, bureaucratic and lead to wrong payments

    —  Take-up can be poor

    —  The most vulnerable may lose out

    —  They are paid at inadequate levels

    —  They create poverty traps

    —  They penalise those who have saved for the future.

  22.  In the context of WFTC, the government has taken steps to reduce the stigma attached and to improve the take-up rate and level. We agree that the switch from Family Credit to WFTC has strengthened the link with the workplace of recipients because it is paid by the employer rather than by the benefits agency.

  23.  We accept that a WFTC top-up, (or a new claim, depending on previous earnings levels) would be well targeted to ward against poverty in families during a period of leave and would be well targeted at lone parents.

  24.  However we are concerned that there may be "purse to wallet" considerations if the man received the WFTC and the top-up, while the woman took unpaid leave. Despite the increased coverage of WFTC, we feel that it would not reach enough workers, particularly those in dual earner households. Apart from lone parents, this group is most in need of parental leave. There would be limited encouragement of take-up among fathers in this group. Low paid women with highly paid partners would still be encouraged to take leave and suffer the consequential inequality. There could be resentment from parents who suffered financial loss when they went on leave towards others who had no partner or a lower paid partner and thus were in receipt of WFTC.


  25.  GMB would support a payment of 90-100 per cent of average individual earnings, paid by the employer and reimbursed by the government, as is higher level SMP. We would prefer full reimbursement to the employer, and would support a higher rate of reimbursement for small firms as for SMP. We believe that most firms would cope better with the administration if the payment used is that already used for annual leave under the Working Time Directive, or that used for Statutory Maternity Pay. (Although the former excludes overtime and the latter includes in its average periods when pay falls due to unpaid leave or sickness.)

  26.  We accept that the cost of full earnings replacement may be considered high, particularly as it would have the intended effect of increasing take-up among women and men. We believe that workers would be willing to pay for this through tax or national insurance, and that employers should also pay their part through the same route.

  27.  We would be sceptical of a limit to this cost by paying, say, only for the first few weeks. As for maternity this would limit the use of leave to those few weeks. We would be sceptical about claims of a future intention to increase pay to cover a longer period.

  28.  Several EU countries offer earnings related payments:

  Finland Income related, average 566 per cent


30 per cent


80-100 per cent


80 per cent

  Information provided by Peter Moss, Thomas Coram Research Unit.

  29.  In many of these countries leave lasts for longer than three months. For example Italian leave lasts for six months, so the equivalent for three months is 60 per cent of pay.

  30.  We would oppose a limit to the cost by imposing a lower earnings limit. The existing lower earnings limit has cut out several million workers from contributory benefits, 95 per cent of whom are women. We have campaigned against this result of the lower earnings limit, and welcomed the Chancellor's announcement in the Budget that its effects would be alleviated for SMP.

  31.  We would accept an upper earnings limit to payments. We are confident that the existing upper earnings limit to contributions would continue to be uprated, and our judgement is that employers may be more willing to concentrate additional benefits on higher paid key employees.


  32.  We would not be confident that a flat rate payment would be uprated. At £60 a week, lower level SMP and Statutory Six Pay have not kept pace with average earnings and are low compared with flat rates for parental leave abroad, for example:




£148 plus local authority top-up


£78 after first child



  Calculated from figures provided by Peter Moss, using February 1999 exchange rates. Rounded.

  33.  Commenting on the above figures, although it is more difficult for parents to take unpaid leave when they have a larger family, we would not suggest linking payment to the size of the family. We would not recommend a regional element of payment. It is also worth noting as above that many of these countries pay for periods of parental leave longer than three months.


  34.  There has been some discussion of the idea of an individual parental account, where parents are encouraged to save towards time off with matched government funds, or fiscal incentives. We are unconvinced that this is the best method for such a limited amount of leave, and are concerned that such a system might prove difficult for lone parents, young parents and low paid parents, who will all find it difficult to save.

May 1999

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