Select Committee on Social Security Appendices to the Minutes of Evidence


Memorandum submitted by the Engineering Employers' Federation (PL 21)


  1.  The EEF (Engineering Employers' Federation) is the representative voice of engineering in the UK. It is a nationwide federation of 13 regional Associations and ECIA, the Engineering Construction Industry Association. It has a growing membership of over 5,600 companies of all sizes, employing over 900,000 people from every sector of engineering, manufacturing, engineering construction and technology-based industries.

  2.  The attached paper is based on two consultations with the EEF's regional Associations and member companies on the implementation of the Parental Leave Directive. It addresses the issue of pay for parental leave, as well as providing some background information on the EEF's views on other issues relating to the implementation of the Parental Leave Directive.

  3.  The EEF is opposed to employers being made responsible for payments for parental leave either from their own resources or as agents/administrators of the Government as this would impose additional financial and administrative burdens on employers in the engineering industry.

  4.  It also considers that the Parental Leave Directive should be implemented in the UK in a way that does not involve any "gold-plating" of the provisions that are set out in the original Directive.

  5.  The EEF believes that these views are consistent with both the Prime Minister's stated position on payment for parental leave and the Department of Trade & Industry's views on the need to avoid burdensome record keeping obligations for employers and its recent initiative to reduce "red-tape" for business.


  1.  The EEF has recently carried out two consultations with its regional Associations and member companies on the implementation of the Parental Leave Directive ("the Directive"). The first was a general consultation and the second was specifically related to the DTI proposals, circulated in March 1999, on four possible fallback options to implement the Directive where agreement cannot be reached between the workforce and the employer (copy attached). These consultations addressed the issue of pay during parental leave, but also dealt with many other issues.

  2.  This paper sets out the EEF's views on payment for parental leave, arising out of these consultations. It also addresses some of the other issues relating to the implementation of the parental leave provisions of the Directive, by way of background for the Committee.


  3.  The EEF considers that employers should not be responsible for making any payments for parental leave, either from their own resources or as agents or administrators of Government benefits or tax credits; to do so would place additional financial and administrative burdens on business.

  4.  The EEF's view that employers should not be obliged to pay workers from their own resources whilst they are on parental leave is also consistent with the well-publicised views of the Government that parental leave should be unpaid. Indeed, in his Foreword to the "Fairness at Work" White Paper, the Prime Minister stated that `it cannot be just to deny British Citizens basic canons of fairness—rights to claim unfair dismissal, rights against discrimination for making a free choice of being a union member, rights to unpaid parental leave' [emphasis added].

  5.  Furthermore, there is no requirement in the Parental Leave Directive for parental leave to be paid and therefore to do so would amount to a significant "gold-plating" of this Directive.

  6.  It is also the EEF's view that employers should not be made responsible for administering the payment of any Government benefit or the operation of any tax credits whilst workers are on parental leave. This would place an unacceptable administrative burden on employers.

  7.  It would inevitably result in employers being obliged to keep detailed records of the parental leave that has been taken by workers which would then need to be passed between employers and to the relevant Government agency. These records would need to be very complicated if they were to be accurate as they would have to distinguish between statutory entitlement to parental leave and any additional contractual leave taken, given that some employers might permit workers to take parental leave when they were not entitled to statutory parental leave. They would also have to take into account leave taken part-time, leave taken with former or other concurrent employers and, potentially, the transferring of the right to parental leave between parents (see 31 below). To further complicate matters, the ways in which workers take parental leave are likely to vary greatly, particularly as the EEF understands that the Government wishes to encourage workers and employers to agree on how leave is taken. It is therefore difficult to envisage how, in practice, a simple record keeping system could be devised to deal with all of these factors.

  8.  The EEF is opposed to any statutory record-keeping obligations for employers in relation to unpaid parental leave, let alone any obligation to keep extremely complex records. Employers are already overburdened with time-consuming and expensive administrative obligations, particularly in relation to the Working Time Regulations 1998. However, if employers were made responsible for paying for parental leave out of their own resources, the EEF would want to review its position on record keeping requirements.

  9.  The Secretary of State for Trade & Industry now appears to have recognised the pressures of excessive regulation on employers and has recently launched an initiative to reduce the burden of "red tape" and regulation on business which the EEF actively supports.

  10.  The DTI's fallback options also recognise the benefits of avoiding all record-keeping obligations. One of the DTI's proposals in its fallback options was for employers to have the right to demand a declaration from workers of the amount of parental leave that they had taken in the past. However, we do not believe that such a system would be sufficient for the purpose of maintaining records relating to the payment of benefits.

  11.  Any entitlement to State benefits whilst a worker is on parental leave also raises the issue of potential fraud within the benefits system. It will be extremely difficult for employers to determine whether a worker has exhausted his or her entitlement to parental leave given the complexity of many family relationships which may make it difficult to establish whether an individual has the right to take parental leave (see 18 and 25 below), the frequency with which workers move between jobs, the number of workers who have more than one job and problems arising when workers are given contractual parental leave although they are not entitled to statutory parental leave. If employers are given the task of administering Government benefits or tax credits, they should not be put in the invidious position of having to police potential fraud on behalf of the Government. Not only will it be an almost impossible task but investigations into workers' personal relationships and arrangements are likely to cause employee relations problems.

  12.  If employers are made responsible for making payments for parental leave on behalf of the Government, it is likely that many employees will perceive these payments as payments that are being made by their employer rather than by the Government. This could therefore also create employee relations problems if an employer refuses legitimately to make a payment or, as is more likely, there are any disparities in the level of payments made to individuals under a means based or tax-credit based system.

  13.  The EEF is also concerned that, if employers are given the responsibility for administering Government benefits for parental leave, they will in the future gradually be made responsible for meeting the payments themselves from their own resources as has happened in the past with other employment related benefits, such as statutory redundancy payments.


Fall-Back Provisions

  14.  The EEF understands that the Government is keen, wherever possible, to encourage employers to agree with their workforce how to implement the Directive, with Regulations prescribing fallback options where no agreement has been possible.

  15.  The EEF's consultation on the DTI's four proposed fallback options resulted in a divergence of views amongst the EEF's member companies with the preferred fallback option seeming to depend very much on the type and size of business. However, the predominant preference was either for Option 1, with workers being obliged to take a continuous three-month period of leave by the time the child is aged two or three, or for Option 2, with the worker being entitled to take one month's parental leave per year for each of three consecutive years before the child is five years old. Under Option 2, if a worker did not take advantage of the right to leave in any one year, the worker would lose the entitlement to that month of leave. The EEF has a marginal preference for Option 2.

  16.  The EEF considers Options 3 and 4 to be too complex. The fallback provisions should be clear and should provide certainty to both parties. If employers and workers wish to operate parental leave in a more complicated or flexible manner, this should be a matter for agreement. Furthermore, the fallback provisions should not entitle workers to take leave on a part-time basis (see 20 below).

Qualifying Period

  17.  Workers should not have the right to parental leave until they have had one year's continuous service. Continuous service should be defined in the same way as in the Employment Rights Act 1996.

Who Should be Entitled to Take Parental Leave?

  18.  The legislation should clearly define who is entitled to take parental leave. Employers need to have certainty about this and should not be put in the position of having to decide whether or not a particular relationship is sufficiently close to entitle an individual to parental leave. We believe that there should be strict eligibility requirements. It will then be open for employers to exercise their discretion to grant leave to those who are ineligible. We understand that the DTI favours an approach whereby only natural parents and those who have parental responsibility for a child, as defined in the Children Act, will be permitted to take parental leave. We support such an approach.

Multiple Births

  19.  Just as for maternity leave, there should not be a right to three months' parental leave for each child where there are multiple births. For instance, an individual should only be entitled to a total of three months' parental leave for twins.

The Position of Part-time Workers.

  20.  Whilst recognising that employers should consider permitting workers to take parental leave on a part-time basis, the EEF strongly objects to workers having a statutory entitlement to take parental leave by working part-time. The right to work reduced hours should not form part of the fallback provisions and should be a matter for agreement only.

  21.  The EEF does not believe that it would be possible to devise a fallback provision relating to reduced hours of work that would avoid significant burdens on business and enormous complexity. Such provisions may also be unsatisfactory to workers, given the variations in their specific needs. Any such fall-back provision would have to deal with exactly how a worker would be entitled to take the part-time leave. Regulations would have to include provisions to settle matters such as whether a worker could leave early for three days a week or could work from Monday to Wednesday rather than from Wednesday to Friday. This is not a viable proposition given the varying circumstances and requirements of employers and workers.

  22.  Part-time workers should be entitled to pro rata amounts of parental leave. A procedure similar to that used in relation to the entitlement to statutory leave in the Working Time Regulations 1998 would be appropriate. Therefore, if workers are entitled to 13 weeks of parental leave, a week for a full-time employee would normally amount to five days and a week for someone who works three days a week would amount to three days.

  23.  The period of leave equivalent to a week of leave would be dependent upon the hours worked by the worker at the time the leave was taken. For example, if a full-time worker takes the first four weeks of his or her entitlement to parental leave and then starts to work a three day week, his or her remaining entitlement to parental leave would be nine weeks' leave, with each week consisting of three days.

  24.  The legislation should also specify what happens where individuals work varying hours each week. This issue was not dealt with satisfactorily in relation to statutory annual leave in the Working Time Regulations 1998.

Purpose of the Leave

  25.  The legislation should reflect the wording of the Directive and specify that parental leave must be taken in order to care for the child.

Notice of Parental Leave and Postponement

  26.  Employers will need time to plan for absences due to parental leave. In our view, the amount of notice that employers will require from workers who wish to take parental leave will depend upon the circumstances in which the Regulations permit employers to postpone leave. The more difficult it is for employers to postpone leave, the more notice they will require from workers.

  27.  Subject to this and provided that the position in relation to employers is not made too difficult, notice equivalent to that required to take annual leave under the Working Time Regulations 1998 would seem to be appropriate in most cases. As a result, workers would be required to give twice as much notice as the periods of parental leave that they wish to take. This also has the advantage of consistency in obligations between the Regulations dealing with parental leave and the Working Time Regulations 1998.

  28.  Employers will have the right to postpone parental leave in certain circumstances. Assuming that they will exercise this right by serving a counter notice on the worker, again in our view periods of notice equivalent to those required in relation to statutory annual leave in the Working time Regulations 1998 would be appropriate. Employers should therefore be able to postpone parental leave by giving the worker as much notice as the period of leave requested.

  29.  The EEF is concerned that the Government may move away from the wording of the Directive which permits postponement for "justifiable reasons related to the operation of the undertaking" and introduce the need for an employer to balance the needs of the business against the need of the employee to take the leave at a particular time. The EEF believes that it is important for the Regulations to follow the wording of the Directive in this respect and that any "gold-plating" of the Directive should be avoided. It seems to us to be impossible for an employer to make a value judgment of its needs as compared to the totally different, and often subjective, needs of the employee. Furthermore, it will be difficult for an employer to satisfy itself of the genuineness of a worker's need, especially given that the same set of circumstances may be perceived by one worker as serious but not so by another worker. Any disparity in treatment of employees could lead to claims of discrimination and/or detriment.

  30.  Employers may encounter difficulties where entitlement to parental leave relates to a parental leave year and the request for leave is made at the end of a leave year. The employer should be permitted to postpone leave until the end of the current parental leave year or by six months, whichever is the longer period. This would then take into account the fact that the end of one parental leave year and the beginning of the next may coincide with a time when it is especially difficult for an employer to cope with any absence.

Transferable Rights

  31.  The Employment Relations Bill opens the possibility of the Regulations permitting leave to be transferred between those who have "responsibility" for a child. The EEF considers that, as the Directive states, the right to parental leave should not be transferable. In other words, the father of a child should not be permitted to transfer his entitlement to leave for that child to its mother. Transferring rights would also complicate any record-keeping obligations that were imposed and would have an impact on the payment of any benefits or tax credits.

Transitional Provisions

  32.  The right to parental leave should only apply to children born or adopted on or after the date when the legislation is enacted as the Directive refers to leave being taken on the grounds of the birth of a child. If parental leave was to be available in respect of children who were born or adopted before the legislation is enacted, employers would inevitably be faced with large numbers of workers attempting to take parental leave within a very short period of time.

Status of the Employment Contract during Parental Leave

  33.  Given the problems that have been encountered with maternity leave, the legislation should be very specific about the status of the contract during parental leave.

  34.  The EEF does not agree with the suggestion in the Employment Relations Bill that the contract (to the exclusion of the remuneration provisions) should continue in place during the period of parental leave. In Halfpenny—v—IGE Medical Systems Ltd (1998), the Court of Appeal held that the contract of employment is effectively suspended during maternity leave. It is revived once a woman correctly exercises her right to return. The same principles should apply to parental leave so that the contract of employment should effectively be suspended during parental leave, although continuity of employment should be preserved.

The Right to Return

  35.  The right to return to the same or a similar job (with no diminution of status or terms and conditions) should be the same as for that at the end of extended maternity leave.

  36.  However, unlike for extended maternity leave (described as additional maternity leave in the Employment Relations Bill), the date of return should be fixed prior to the commencement of parental leave to enable employers to make proper arrangements. Employers should also be entitled to ask for confirmation of return to work at a specified time during the parental leave. This will be particularly important if a worker takes parental leave at the end of their maternity leave. If a worker and employer agree that a worker may take less than three months' parental leave at one time and the worker were to decide that he or she wanted to stay on parental leave after the expiry of the agreed period, he or she would have to give notice that he or she wished to take additional parental leave, in the same way as when asking for the initial period of parental leave. Similarly, the employer would have to treat the request in the same way as the original request; it would be able to refuse the request for a justifiable reason.

  37.  If the worker wished to return earlier than agreed, he or she should be obliged to give a minimum period of notice, such as a week. However, just as when a woman returns early from maternity leave, he or she would lose his or her entitlement to the remainder of the period of leave that had been agreed. For instance, a worker agrees with his employer that he or she will take four weeks' parental leave. If at the end of the first two week period of the parental leave, the worker gives notice to the employer that he or she wants to return, the employer would be obliged to permit the worker to return at the end of the third week of the parental leave period. The worker would not then be permitted to take the remaining week of that period of parental leave later on. However, if the worker and the employer had agreed at the outset that the worker would take three weeks' parental leave and the worker returned at the end of the period of three weeks, that worker would not be precluded from taking the fourth week (as well as any other remaining entitlement to parental leave) in the future.

  38.  If a worker does not return on the date agreed or the date for which he or she gave notice to return, the EEF considers that he or she should lose the right to return, although there should also be specific provisions as to what happens if a worker is unable to return on the specified day because of illness.

Small Employers

  39.  Small employers with fewer than 20 workers should be given the maximum amount of flexibility in relation to each and every part of the Directive.

Workforce Agreements

  40.  The EEF is concerned about the operation of workforce agreements in respect of the implementation of the Parental Leave Directive. Many employers have only just gone through the process of electing workforce representatives for the purpose of the Working Time Regulations 1998 and will find it burdensome to have to undertake a similar process again after such a short period.

  41.  Furthermore, the Employment Relations Bill provides that workforce agreements will only be effective in modifying the Regulations where the terms of the agreement are incorporated into each worker's contract. Workforce agreements are not automatically incorporated into workers' contracts of employment. Therefore, employers would have to obtain express agreement from each employee to incorporate the terms of the workforce agreement into his or her contract. Existing employees may be reluctant to agree to this, particularly given that individual workers' preferences in relation to parental leave will inevitably vary widely. The EEF believes that there is no need for the terms of workforce agreements to be expressly incorporated into workers' contracts in order for the terms of a workforce agreement to be enforceable. This view is reinforced by the fact that there is no such provision in the Working Time Regulations 1998.

3 June 1999

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