Select Committee on Education and Employment Minutes of Evidence

Examination of Witnesses (Questions 20 - 30)




  20. Can we turn now to maternity and parental leave? What impact do you think the introduction of parental leave has had on the workforce? How widely has it been taken up, would you say?
  (Ms Carberry) Very little impact so far. The take-up as far as we can gauge has been very low. We think that is for one reason: that is because it is unpaid. It is very difficult for people to take chunks of time off work if they do not get any income replacement.

  21. My next question was going to be, how could the current arrangements be improved and you have just told me "pay". Is that the only way it can be improved?
  (Ms Carberry) No.
  (Ms Holland) I just wanted to talk about flexibility. The opportunity to take parental leave on a flexible basis will help and in particular changing the current default scheme which has the one most punitive thing that does not apply anywhere else in the workplace, that if you take a day's instead of a week's leave you lose your entitlement to a week. It is very unfair and anyone that has tried to take half a day and then discovered they lose a week's entitlement has been absolutely shocked, the people that we have represented. There is a father who wanted to take time off around the time of the birth of his child and he wanted to take the full three months. He could afford it but he was not allowed to because the default scheme that the employer was using meant he could only take a month. There are things like that which, even in the current scheme, with the lack of flexibility and choice, are restricting even those who are prepared to take it unpaid.

  22. Presumably all these points have been made to Government, have they?
  (Ms Holland) Yes.

  23. To what extent are employers aware of and implementing the changes that the Government has already made to regulations regarding maternity leave, maternity allowance and parental leave?
  (Ms Holland) Certainly where there is a union they are aware of them and they are proposing policies, or we are working with them on that. I think there have been some positive examples where the fact that there has been new rights has led to improvements beyond what is in the legislation, which is very helpful, and sometimes the employer has made a big effort to introduce improvements before the rights have come in to show that they are not just doing it because the legislation is there but because they want to show they are doing it out of a genuine commitment to the people at work, so we have got some positive examples of that. I think it is true to say there are many people who are not aware and who are not acting unless somebody asks for the new rights, and I have come across cases still where there is not even a basic understanding that when you become pregnant it does not mean you are resigning. You do still find cases where we have to enlighten the employer that people do have rights to carry on working when they have a baby.
  (Ms Anderson) The DTI research showed that one of the key problem areas was the new right to time off for dependants. A lot of employers do not know about that. There was an Employment Tribunal case recently where a mother working as a secretary for some firm was sacked and she successfully claimed unfair dismissal on the basis of the right, and the employers clearly had no clue that there was this new right. Obviously we have done as much promotion of that as we can but I think there is quite a lot of further work that needs to be done.
  (Mr Gates) I think the whole question of promotional work is quite important. Diana made the point about unionised workplaces. I think where businesses are part of employers' associations and federations there is more awareness of it. I think there is scope for the Government to promote, even if they do it sectorally, partnership work between trade unions and employers' associations to disseminate not only the legislation but best practice within their sectors based on the experiences of companies where there is an awareness and it is operating effectively and efficiently.

  24. That would deal with what the Government can do where trade unions are operating, but what can the Government do where trade unions are not operating? Presumably the Government ought to do more, you would feel, to publicise these changes. What more should they be doing?
  (Ms Anderson) They had a major promotional campaign in relation to the national minimum wage. I know there have been recent criticisms about how much money they are spending on advertising but nevertheless I think that was thought to be a very effective campaign and something along those lines could be done.
  (Ms Holland) There is also the possibility of linking up with the Department of Health with people who attend parentcraft classes and antenatal classes and there are very useful information leaflets that have been produced but in my experience they are not very widely known about or being used either by employers or people at work. That would be one way of putting them into the hands of those people that are providing the support, whether it is health visitors, midwives or others who could give that information at that time.
  (Mr Gates) In terms of the non-unionised workplace, it is a partnership arrangement between unions and employers' associations on a sectoral basis. Quite often that does encompass businesses that may not be formally unionised but they are part of the association and therefore information will spill down when they participate in seminars and information gathering.

  25. The TUC has proposed that earnings related maternity pay should be extended to 90 per cent for 26 weeks. You tell us I think that that will cost £1.7 billion annually. Would you say that the benefits that would accrue justify such expenditure?
  (Ms Anderson) Obviously that does sound like a very substantial amount of money and it is, but bear in mind that we already spend quite a lot of money on statutory maternity pay, so it is a maximum extra of, say, a billion. Bear in mind also that not enough analysis has been done on what is recouped so in terms of extra tax and national insurance that would be got back from mothers and also from employers, that would be quite a significant factor as well as other savings, keeping women in employment and that type of issue. We really do feel that it is justified because, although we very much welcome what the Government has done in terms of increases to maternity pay, we did some research and looked particularly at low and medium paid women. They said to us that even increasing the flat rate by the amount that it has been increased would give them severe difficulties in taking it because the flat rate still involved a big drop, even for not very well paid women, and if you look at the average pay of manual working women, for example, it is still a big drop. We did think that earnings related pay was justified in the circumstances, particularly given the Government's pledge to eradicate child poverty and the emphasis that they have given on child welfare. Yes, it is a lot of money but we do feel it is justified.
  (Mr Gates) To add to that on the whole question of maternity leave, quite often businesses do not seek to take cover for the period of time. They use extended hours, they use other people to cover the jobs. In terms of attracting people back they could not continue that cover long term. If you look at this money as an investment in UK PLC, because this is right across the country, what you are talking about is, is investment in training new people, is investment in equipping employees with the knowledge of the business and knowledge of the business's customers, worth the cost of investment? It is almost the old adage: is training a cost or is training an investment? Is the maintenance of your key employees an investment in your business long term as opposed to a short term period of 26 weeks, and that is a justification for yes, it is a lot of money maybe but it is an investment spread across the whole of UK PLC that will recoup itself in improved performance and productivity.

  26. I can agree with the sentiments of all that. I am a little surprised that you have not done some research here yourselves on costing the benefits or quantifying the benefits, and if you are so confident that it is justified then presumably you can produce evidential statements based on research which can prove your confidence.
  (Ms Holland) I think the most important thing in terms of actual cost is the lack of need to replace people, and obviously that will vary, but the costs of advertising, training and replacing people and, depending on the job that they do and the level of training and experience required, that will vary. I know that Boots has done some research on its own workplace and identified savings of millions from the family friendly policies that they have introduced. In the bus industry we have done quite a lot of work around retention of employees which has not just been family friendly policies; it has been sexual harassment policies as well, but they had identified that they were training women in this area and they were not staying. Those two issues were the two reasons why they were not. They saw a very important benefit to themselves from that. The cost of training is obviously high but after that the people were not staying and so they wanted to make sure that they did and they felt that it was more than worth it.

  27. So bits of evidence exist to justify in those particular cases. Do you know of any research across the board which has been embarked upon either by Government or by academic institutions or even sponsored by the TUC or by one of the unions?
  (Ms Carberry) The Working Parents Green Paper cited research about women's propensity to come back to work which was linked to the level of earnings replacement that was available to them. It did show that those on higher salaries and professional women were more likely to come back into the workplace. If our objective is to retain women's attachment to the workplace there is an argument that the need is greatest at lower levels of income. We argue however that any drop in income from your normal earnings to a low flat rate is a financial shock and is something that a woman, in the few months following the birth, should not have to deal with and that is why we argue that everybody should be able to have a fair length of time when they get full earnings replacement. If the argument is that the cost is too great, there is another argument that we would put forward, which is that you can look at tapering arrangements as a second best and you can have an upper salary cut-off point beyond which you would not get full earnings replacement, or you could give a lower proportion of earnings replacement for some of the maternity leave below the 90 per cent. That would not be our ideal but that would be an alternative way of approaching it if the overall cost to the public purse were deemed to be excessive.

Mr Allan

  28. My assumption is that most of the people who currently get something closer to full earnings replacement as in well above the statutory minimum are women who are already in managerial and professional positions where they will get that as part of their terms of service as a bonus. Is that a correct assumption and does that therefore throw a question in that if you were to go for the universal right some of the winners would be the employers who are currently paying over the odds who would be able to get it from the Treasury rather than taking the cost themselves?
  (Ms Carberry) There would be some displacement. We have not quantified it. I do not know whether the Government research has. Nevertheless there is also an argument about justice and equity and those women having the same rights as other women have and not having those rights lessened just because they work in particular occupations.
  (Ms Anderson) There are also important demographic considerations and this is maybe not talked about as much as it could be. The recent population projections did show that the proportion of people above pensionable age by 2011 was going to increase at twice the rate of the numbers of people of working age. That was even given assumptions that the birth rate would not fall as much as it might do and that there would be a net inflow of migrants to this country. Even given those assumptions there was a really serious issue by 2011 about the working age population in relation to the pensionable age population and it is clear that these kinds of decisions around maternity rights issues have an impact on whether women are going to have children, and frankly we need children. For the Government there is that wider consideration too.


  29. Presumably there is quite an important consideration for skills shortages amongst public sector workers in particular in areas like inner and outer London where there would be substantial economic benefit for women returning there. Do you know whether anyone is quantifying that at the moment or focusing upon that?
  (Ms Carberry) There is the general question about skill shortages. I am not aware of anybody particularly looking at skill shortages in relation to women geographically.

  30. It just seems that everyone is talking about the problems of getting people to work in the public sector in London vis-a-vis the great cost of living in London, and I would have thought that Government would be focusing on ways of introducing flexible working arrangements to encourage women in particular but also others to take up those opportunities.
  (Ms Holland) There is certainly work going on within the Health Service in shortage areas. There is evidence that they are looking at a whole range of different family friendly practices and particularly working time choice. I know a number of examples of self-managed rosters where particularly nursing staff, when they want to work can do so, and they sort it out amongst themselves. There are positive examples like that. I am part of the joint employer/union group that is looking at work-life balance in local government and we are producing jointly guidance and best practice examples to go throughout local authorities in looking at that. There is that kind of work going on but I would not classify it as research in the sense that you mean. It is more trying to promote best practice and also pulling together all the examples of good practice that are going on and quite imaginative and innovative things that are going on, and identifying those that are being supported as being of benefit on a joint basis.

  Chairman: Thank you. I rather fear that we have only scratched the surface of this particular subject but I think we have come to the end of our time, if you will forgive us. Thank you very much indeed for that fascinating session. We are now going on to colleagues from the CBI and you are very welcome to stay if you want to; I think some of them have listened to your evidence.

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