Select Committee on Social Security Appendices to the Minutes of Evidence


Letter to Clerk of the Committee from Penguin UK (PL 32)


  I recently met with Harriet Harman MP to discuss the implementation of the forthcoming Parental Leave legislation and agreed to let the Committee know of Penguin's experience as an employer with more than twenty years experience of operating a range of family friendly policies. I have enclosed a summary of our benefits for your information. We employ 750 employees in the London area, operating out of two sites—a publishing office in Kensington, and a distribution centre near Heathrow Airport. We are owned by the Pearson Group

  As you will see, amongst the benefits we make available to our employees is maternity leave of one year, six months of which is paid, six months unpaid. We also give two weeks paid paternity leave for "new" fathers and operate a compassionate leave policy which enable our people to take paid leave to help with domestic emergencies, childcare breakdown, family illness etc. All of these are operating successfully in helping our employees to better achieve the work/life balance.

  We particularly want to draw the Committee's attention to our experience with the unpaid element of our maternity leave. The vast majority of employees return to work after the birth of their child—since January 1998, 5 per cent of our total workforce availed themselves of maternity leave. Of these, the majority took the paid portion of leave only, with just 5 people taking any unpaid leave—only one person took the full year's leave.

  To ensure any statutory Parental Leave entitlement is fully utilised and realises the philosophy of aiding the majority of families to balance their work/life responsibilities, taking the leave should not detrimentally affect them financially.

  From the employer's perspective, the answer is not simply to transfer the burden to the employer by imposing an obligation to pay employees for this leave. The overhead costs of employing people are steadily increasing, with the increase in NI costs earlier this year just one example. Certainly for Penguin, if there were to be an obligation on us to pay employees for the new parental leave, it is likely we would reconsider our package of family friendly policies to ensure the overhead costs on our business associated with these benefits did not escalate. For instance, the salary cost of our compassionate leave policy alone in the last 18 months is approximately 0.5 per cent of our payroll, with 10 per cent of our workforce availing themselves of the benefit. Our maternity leave cost Penguin around 3 per cent before taking account of the costs associated with covering the jobs of the maternity absentees.

  I hope the experience we have had at Penguin is of interest to the Committee in its work on the Parental Leave inquiry.

14 July 1999

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