APPENDIX 12
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.
SUMMARY
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.
THE CASE
FOR PARENTAL
LEAVE BEING
PAID
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.
PATERNITY PAY
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.
MATERNITY PAY
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.
SPECIAL LEAVE
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.
PARENTAL AND
ADOPTION LEAVE
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
|
|
| UK | 40 |
8.6 |
| Ireland | 18
| 9.8 |
| France | 162
| 13.5 |
| Portugal | 118
| 14 |
| Iceland | 26
| 14.6 |
| Belgium | 41
| 15.7 |
| Greece | 46.6
| 16 |
| Netherlands | 42
| 16 |
| Spain | 166
| 16 |
| Denmark | 28
| 20.8 |
| Italy | 47.7
| 25.1 |
| Finland | 43.8
| 29 |
| Germany | 162
| 31.7 |
| Sweden | 65
| 42 |
| Norway | 42
| 42 |
| Austria | 112
| 47.7 |
|
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).
WORKING FAMILY
TAX CREDIT
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
— 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.
EARNINGS RELATED
PAYMENT
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
Italy
30 per cent
Norway
80-100 per cent
Sweden
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.
FLAT RATES
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:
Belgium
£84
Denmark
£148 plus local authority top-up
France
£78 after first child
Luxembourg
£250
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.
INDIVIDUAL PARENTAL
ACCOUNT
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
| 
