Draft Maternity and Parental Leave (Amendment) Regulations 2002
Draft Paternity and Adoption Leave Regulations 2002
Draft Statutory Paternity Pay and Statutory Adoption Pay (Weekly Rates) Regulations 2002

[back to previous text]

Mr. Henry Bellingham (North-West Norfolk): I am grateful to the Minister for his explanation. The Opposition support any measures to improve industrial relations and to create a more positive and harmonious atmosphere in the workplace. Obviously, we want Britain to become a still better place to do business, and I certainly concur that it is important that we value the family role of employees. That is good for business, as contented employees who are treated fairly are more likely to be motivated and loyal and more likely to treat other employees fairly.

We also believe that 90 per cent. of businesses support fully the regulations. They are good employers, and any good employer in a modern, industrial workplace is probably following most of the recommendations anyway.

However, we have some concerns about the regulations. I shall deal with one or two specific points in a moment, but, first, on a more general note, the Opposition are very worried about the burden that is being put on small businesses. The Minister has demonstrated considerable concern for and interest in

Column Number: 7

the small-firm sector, although he is not actually the Minister with responsibility for small firms.

Mr. Mark Simmonds (Boston and Skegness): It may assist my hon. Friend if I mention that in the Committee considering the Employment Bill—along with the Minister, I was fortunate to sit on the Committee and go through the Bill line by line—there was a tremendous amount of debate about the effect of these and other provisions on small businesses. The Opposition suggested that all small businesses with fewer than five employees should be excluded, in the same way that such businesses are excluded from the stakeholder pension requirements.

Mr. Bellingham: I am grateful to my hon. Friend for that suggestion, because I was about to come to that point, which goes to the nub of a very important issue. Taken individually, the regulations that are piling up on small firms may not be showstoppers, but their combined weight is doing a substantial amount of harm to small firms.

I know, and the Minister will almost certainly say, that the economy is still robust and that unemployment is still coming down. However, I think that he will agree that that actually hides several big variations in the economy. In manufacturing, engineering, farming and commercial fishing, the downturn has started to bite quite hard. In any downturn, small firms are hit disproportionately hard. There is no question but that small firms are beginning to suffer substantially. The other day, we heard from a number of small firms organisations, which included the Forum of Private Business, the Federation of Small Businesses and the Small Business Bureau. They estimate that small business men spend in the region of 12 hours a week on dealing with paperwork, Government agencies and form filling.

Dr. Nick Palmer (Broxtowe): Is the hon. Gentleman suggesting that the length of a parent's maternity or paternity leave should depend on the size of the firm for which he or she works? We have all heard of postcode prescribing, but that would be employer-code maternity leave.

Mr. Bellingham: I will come to that point in a moment.

The Minister has said several times that he supports small businesses. The Secretary of State said in the House last week that small businesses are vital for job and wealth creation. In a recent Department of Trade and Industry stakeholder seminar at 10 Downing street on 16 October, the Minister with responsibility for small firms undertook to set up a better regulation panel under the chairmanship of Stephen Haddrill, a senior DTI civil servant. The Minister also undertook to set up the small firms impact test. Has a regulatory impact assessment been carried out on the regulations, with specific reference to small firms?

Have the Government thought again about bringing in some form of de minimis principle? If a key employee working for a very small firm that employs perhaps two or three people benefits under

Column Number: 8

the proposals to increase maternity leave from 18 weeks to 26 weeks, or under the proposals relating to adoptive parents, that will have a particularly onerous impact on the firm in question. The proposals will have a disproportionate effect on very small firms. In Committee, we proposed that there should be a de minimis principle and I believe that there was a vote on that. Has the Minister considered the issue again? Will he focus again on the very small employer, perhaps in the light of a regulatory impact assessment?

We want small firms to take on different employees and we do not want them to be influenced against taking on particular categories of people. We are concerned that these regulations, and others, may well result in a built-in disincentive to make certain employment decisions. That is not fair on employees.

On notification, the Minister will be aware that, under current maternity leave procedures, there is a statutory presumption that if a woman is entitled to both ordinary and additional maternity leave, she will take both. If she wants to return before the end of ordinary or additional maternity leave, she must give notice. That makes sense and is something with which we all agree. She is not required to give notice if she wants to return at the end of her ordinary maternity leave, which does not seem to make sense. Above all, businesses need a degree of certainty, so that they can provide the relevant cover.

Employees entitled to both ordinary and additional maternity leave should be required to give 28 days' notice of their intention to return to work before the end of their additional maternity leave period. Surely that makes sense. Will the Minister consider that suggestion? Giving employers a degree of certainty would be a good way of improving the regulations.

One of the regulations releases employers from a contractual obligation to remunerate an employee who returns to work before she should have, but does not release employers from their statutory obligations under the National Minimum Wage Act 1998. An employer should not be obliged to pay an employee the national minimum wage if she has not given proper notice of her intention to return to work early. I hope that the Minister will look at that. We are not trying to discriminate against employees on low wages; we are simply making a practical point that is not, I think, properly covered in the regulations.

A further point concerns the Employment Rights Act 1996. Does the Minister not think it sensible for the Government to provide in the regulations, or in future legislation, that a failure to comply with the notification requirements is potentially a fair reason for dismissal, pursuant to section 98 of the 1996 Act? There is an anomaly here, because there does not seem to be such provision, as the legislation currently stands.

Will the Minister look at the obligation to preserve seniority, pension and similar rights? It is not at all clear what is meant by ''similar'' and ''seniority'' rights. We are not talking about rights that flow from the ordinary period of maternity leave, but those that

Column Number: 9

could flow from additional maternity or adoption leave. For example, does the provision on seniority rights mean that employees continue to accrue annual leave during their absence on maternity leave, or that continuous service for the purposes of contractual benefits is preserved? Will the Minister comment on that?

What does remuneration actually include? Does it include shift allowances, attendance allowances, bonuses, commission, holiday pay and so on? Obviously, in asking for that clarification, I am referring to the additional family leave. The point about bonuses is especially pertinent. What is the position if a mother, or father under the adoption leave regulation, decides to take the additional leave, and their pay is largely dependent on bonuses? The legislation should clarify that, rather than leaving it purely to chance.

Turning to the paternity and adoption leave regulations, regulation 2(1) defines ''partner''. However, because the regulations do not define ''enduring family relationship'', ''partner'' could include individuals whom the Government probably do not intend to cover. A parent of a mother or adopter would clearly not be entitled to take paternity leave, because he would be a blood relative, but a step-parent could meet the conditions of continuous service, expect to have responsibility for the upbringing of the child and not be a blood relative. If that step-parent also lived with the mother or adopter in an enduring family relationship, he would be entitled to paternity leave under the current definition. I suggest that there should be an additional requirement that the partner and mother, or partner and adopter, are actually a couple. That would make sense and clarify that point.

I have an important practical point on the general statutory paternity pay and statutory adoption pay regulations, concerning regulations 17(2) and 26(2). Those should require the employee to notify the employer immediately upon starting work for another employer during the statutory pay period. Otherwise, the employee is likely to receive statutory paternity or adoption pay to which he or she is not entitled. We recommend that the regulations make clear that payment of statutory paternity or adoption pay when the employee is not entitled to it is an overpayment of wages for the purposes of section 14 of the Employment Rights Act 1996. Alternatively, a penalty could be imposed on an employee for failing to notify his employer when starting work for another employer while claiming paid paternity leave. Perhaps the Minister can clarify that point, and put our minds at rest on it.

I have a more general point, although it is not hugely important. I do not really understand the logic behind the different rules for maternity, paternity and adoption leave on the one hand, and statutory maternity, paternity and adoption pay on the other. Although the rules generally mirror each other, they do not in some areas. I also spotted some quite important differences in the drafting. In most people's experience, employees want to know what they have to do to get paid leave, not what they have to do to get

Column Number: 10

leave for which they would then be paid. The Government and the Minister did not devote enough attention to how the regime could be made simpler by logically combining in the regulations the same rules for the two different types of regime. I hope that the Minister will answer those points, and I am sorry to have gone on at such length.

There is obviously a great deal of meat in the regulations; there is a lot of substance. I entirely take on board what the Minister says about consultation. Every organisation to which I have spoken has made it clear that the Government have gone out of their way to consult as many people as possible. I accept that I have come to the issue late in the day, as the primary legislation has gone through and there have been many votes on different amendments and new clauses.

I have had discussions with bigger employers, and I was talking to such an employer in my constituency last weekend. Campbell's is a very large American company with a plant in King's Lynn—it is the second biggest employer in King's Lynn—and made it clear that with the resources and the amount of technical back-up that it has in its headquarters, the regulations do not really bother the company too much. The company said that it was already carrying out most of what was in the regulations anyway. It is the small firms and micro-businesses that are going to find it very difficult to cope with the additional burdens in the areas that I have mentioned. Will the Minister agree to a proper regulatory impact assessment, even if he is not prepared to agree to a de minimis principle? Is he prepared to keep a reasonably open mind on the position of small firms and micro-businesses? If we want to help employers and the general business climate, we should not curtail wealth creation and employment.

4.57 pm

Previous Contents Continue

House of Commons home page Parliament home page House of Lords home page search page enquiries ordering index

©Parliamentary copyright 2002
Prepared 4 November 2002