Second Standing Committee
on Delegated Legislation
Monday 4 November 2002
[Mr. Roger Gale in the Chair]
Draft Maternity and Parental Leave
(Amendment) Regulations 2002
The Minister for Employment Relations, Industry and the Regions (Alan Johnson): I beg to move,
That the Committee has considered the draft Maternity and Parental Leave (Amendment) Regulations 2002.
The Chairman: With this it will be convenient to consider the draft Paternity and Adoption Leave Regulations 2002 and the draft Statutory Paternity Pay and Statutory Adoption Pay (Weekly Rates) Regulations 2002.
Alan Johnson: It is a pleasure to serve under your chairmanship for the first time, Mr. Gale. I welcome the hon. Member for North-West Norfolk (Mr. Bellingham) to our first exchange in Committee, which I am sure will be extremely constructive.
The regulations are only part, albeit a key part, of the full package of measures that we are introducing to provide more support and choice for parents in the workplace. In a minute, I propose to take the Committee through the substance of specific regulations in detail, but first I should like to put them in the context of the Government's employment policies, and our policies to help families more generally.
The Government start from the premise that a company's biggest asset is its people, which means that its biggest asset walks out of the door and goes home at the end of working time. However, such people may have family responsibilities, childcare needs or may be planning, or about to have, a family.
If an organisation can value its human assets and provide employment that recognises working parents' needs, it will be able to recruit from a wider labour pool, to retain and to motivate staff—their morale and commitment will be improved—to reduce stress, absenteeism and staff turnover, and to increase productivity. In short, valuing the family role of working parents is good for business as well as employees. Although the regulations are in many ways about giving rights to employees, I make no apologies for claiming that they are also about helping UK business maximise its performance; productivity and fairness at work go hand in hand.
Of course, the prime responsibility for ensuring that the workplace provides a fair and flexible environment for working parents rests with employers themselves, but there is a role for the Government in ensuring common measures of fairness and setting a framework of minimum standards within which employers and employees can flourish. That approach will help to underwrite the activities of those employers who already offer choices to their employees.
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For many years, all Governments have recognised the special needs of women who are pregnant or who have recently given birth, but as society changes and family and working patterns evolve we perhaps come to a different and better understanding of the needs of working mothers, and also of the needs of others with parental responsibilities. The others could be fathers, who have traditionally—and wrongly—been considered far less likely to have childcare responsibilities, or adopters, who have been considered to be second-class parents for too long.
The regulations did not come about simply because Ministers sat down one day and thought that their provisions would be good. They have come about as the result of one of the most open, comprehensive and participative consultation processes that the Government have ever undertaken. That process was important in ensuring that we understood exactly the needs of working parents in today's workplace, and exactly how best we could cater for those needs without imposing unnecessary burdens on business. Although the regulations may not satisfy everyone in every last particular—that is never possible—they have the broad endorsement of those we have consulted.
In December 2000, the Department of Trade and Industry published a Green Paper, ''Work and Parents: Competitiveness and Choice''. That publication put forward a range of options to balance improved choice for parents with enhanced competitiveness for business. We received more than 600 formal responses to the consultation, which included representations from organisations representing 500,000 employers and 7 million employees. In addition, members of the ministerial group and officials from the review team met almost 300 individuals face to face.
In the light of the consultation, we established people's priorities, including new rights to paternity and adoption leave, and enhanced and simplified maternity rights. We produced framework documents setting out how the schemes might work in detail and in practice, and we consulted again. Once we had the further responses—from around 100 organisations this time—we finalised the schemes and introduced the main provisions in the Employment Bill at the end of last year.
We had many good debates on those provisions and I am happy to record that, following the points raised by Standing Committee members on both sides, we made several amendments and improvements either to the Bill or to our plans for today's detailed regulations. I am grateful to all those who assisted that process of scrutiny, including the hon. Members for Boston and Skegness (Mr. Simmonds) and for Weston-super-Mare (Brian Cotter), and my hon. Friend the Member for Derby, North (Mr. Laxton), who, by tradition, is adopting the Trappist monk stance. I thank them for their contributions in Committee.
Finally, in early summer this year, we published a further consultation document outlining a handful of issues that were still unresolved, and we attached drafts of the regulations for any technical comments from people. We received about 60 responses to that—
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consultation fatigue had begun to set in—and, in the light of them, we produced the regulations under consideration today.
The regulations will improve maternity rights for up to 300,000 working mothers a year, and simplify the arrangements for them and their employers. We are increasing ordinary maternity leave, to which all employed women are entitled, from 18 to 26 weeks, and we are increasing additional maternity leave to a 26-week period immediately following ordinary maternity leave. That will give most mothers up to one year off work in total.
Separate regulations—negative in procedure, and thus not technically forming part of the package under consideration—increased the standard amount and duration of statutory maternity pay and maternity allowance to £100 for up to 26 weeks.
The regulation will benefit employers. They will be given earlier notice of a woman's planned leave and the period of that leave can be determined in advance, rather than, as it is now, calculated only once the woman has given birth. Employers told us that that should make it easier for them to arrange cover for the absent employee, and help the retention of women in the workplace, saving costs of recruitment and training. If just 10 per cent. of mothers who do not currently return to work are able to return because of increased maternity leave, employers could save up to £39 million each year in recruitment costs alone.
The regulations give new benefits for fathers. For the first time, eligible fathers will have the right to two weeks paid paternity leave in the time shortly following their child's birth, or, in the case of the partner of an adopter, after a child is placed with them for adoption. Pay will generally be at the same standard rate as statutory maternity pay. It will give fathers more time to care for and build a relationship with their new child and to offer support to the mother.
Paternity leave is only available where the employee in question will have responsibility for the upbringing of the child and is taking time off for the purposes of supporting the mother and caring for the child. In the majority of cases, that will be the child's natural father, but the regulations do not rule out a new partner of the mother, or, as the case may be, the adopter, if he or she satisfies fundamental tests. The introduction of paternity leave also rewards employers who already provide some paid paternity leave. They are set to benefit by up to £17 million a year.
We have made the system as easy as possible for employers to administer. With any new statutory scheme, there will always be uncertainties as to how exactly it will operate. That is why we have followed employers' suggestions and, wherever possible, designed the scheme to reflect the existing operation of statutory maternity pay, minimising the learning curve for those who must administer it. We have taken the opportunity to make some improvements, including an ability for firms to reclaim payments from the Inland Revenue in advance, thus easing cash flow difficulties. Recent changes to the threshold for small employers relief ensure that an ever increasing
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number of smaller firms qualify for reimbursement at a rate of more than 100 per cent. of the statutory payments that they make.
The regulations introduce for the first time a statutory right to paid time off work after a child is placed for adoption. The new right recognises the valuable contribution that adoptive parents make to society and allows them to take time off work to establish a relationship with their new child. One adoptive parent will be entitled to the full adoption leave; the other will be eligible for paternity leave, on the lines that I have just mentioned. We hope that that will reduce the rate of disrupted placements and thus ensure a better future for many children who are leaving the care system and seeking placement with a family.
Adoption leave is broadly equivalent to maternity leave and is set at six months' leave paid at the standard pay rate followed by six months' unpaid leave, giving up to 12 months in total. We expect it to benefit up to 4,000 adopters in 2003, and they will be up to £2,600 better off than before.
The new rights build on existing rights to maternity leave, parental leave and time off for dependants. They will be accompanied in April 2003 by a new right for working parents of young children to request flexible working and an obligation on employers to consider their request seriously. Regulations setting out that important new right will soon be laid for consideration by the House.
These regulations implement policies that have received the support of almost everyone with whom we have consulted. We have designed the schemes in the closest possible collaboration with interested parties, and I believe that we have framed proposals that are not only right in principle, but are sensible and practical in detail. I look forward to hearing the comments of hon. Members and I commend the regulations to the Committee.