The
Committee consisted of the following
Members:Chairman:
Mr.
David Wilshire †
Atkins,
Charlotte (Staffordshire, Moorlands)
(Lab) †
Blunt,
Mr. Crispin (Reigate)
(Con) †
Burrowes,
Mr. David (Enfield, Southgate)
(Con) †
Burt,
Lorely (Solihull)
(LD) †
Clark,
Greg (Tunbridge Wells)
(Con) †
Coffey,
Ann (Stockport)
(Lab) †
Davey,
Mr. Edward (Kingston and Surbiton)
(LD) †
Fitzpatrick,
Jim (Parliamentary Under-Secretary of State for Trade and
Industry)†
Hepburn,
Mr. Stephen (Jarrow)
(Lab) †
Jones,
Mr. Kevan (North Durham)
(Lab) Kirkbride,
Miss Julie (Bromsgrove)
(Con) †
Laing,
Mrs. Eleanor (Epping Forest)
(Con) †
McCabe,
Steve (Birmingham, Hall Green)
(Lab) †
McDonnell,
John (Hayes and Harlington)
(Lab) †
Milburn,
Mr. Alan (Darlington)
(Lab) †
Prosser,
Gwyn (Dover)
(Lab) Wyatt,
Derek (Sittingbourne and Sheppey)
(Lab) Glenn McKee, Committee
Clerk † attended the
Committee First
Standing Committeeon Delegated
LegislationMonday 17
July
2006[Mr.
David Wilshire in the
Chair]Draft Adoption and Children Act 2002 (Consequential Amendment to Statutory Adoption Pay) Order 20064.30
pm
The
Parliamentary Under-Secretary of State for Trade and Industry (Jim
Fitzpatrick): I beg to
move, That the
Committee has considered the draft Adoption and Children Act 2002
(Consequential Amendment to Statutory Adoption Pay) Order
2006.
The
Chairman: With this it will be convenient to consider the
draft Maternity and Parental Leave etc. and the Paternity and Adoption
Leave (Amendment) Regulations
2006.
Jim
Fitzpatrick: It is a pleasure to see you in the Chair, Mr.
Wilshire. Following the
Work and Families Act 2006 receiving Royal Assent last month, the
regulations deliver on a number of the Government’s commitments
set out in the pre-Budget report of 2004 and in the Government response
to the 2005 work and families consultation. I am delighted to be able
to discuss the regulations with hon. Members here today, a number of
whom playeda significant part in the Bill’s progress
through Parliament and who made many valuable and helpful interventions
during its
passage. Before turning
to the detail of the regulations, I shall say a few words about the
work and families legislation—the Act and consequential
regulations, including these. It is a significant package of
legislation, which not only will give additional support to working
families, but can enhance Britain’s economic success. Families
today face real challenges in balancing their home and work life. Given
parents’ desire to give their children the best start in life,
coupled with the demands of an increasingly competitive economy, many
of them struggle to balance their work and caring responsibilities.
Also, as time goes by, an increasing number of men and women are likely
to want to take time out of the labour market to care for children or
elderly relatives or
both. At the same time,
every business knows that, to succeed, it must find, develop and keep
the best people possible. Many employers now recognise that helping
employees to strike the right balance between work and family life can
enhance their business performance, too. It gives them access to a
wider pool of talent from which to recruit, and the evidence shows that
a healthy work-life balance reduces staff turnover, raises morale and
reduces absenteeism. The regulations respond to those changing patterns
of employment and ensure that parents and adopters have genuine choices
about how they balance work and family life.
The Government’s record on
supporting working families was a good one, even before the new
legislation. Since 1997, we have created more than 1 million additional
child care places, guaranteed all three and four-year-olds a free
part-time nursery place and improved financial support through
increased child benefit and working tax credits. Working parents have
benefited from improved maternity leave and pay, new rights to
paternity and adoption leave and the right to request flexible
working. The
regulations will deliver a number of measures for working families and
their employers. They are the product of close consultation with a wide
variety of interested parties, including parents’ groups, trade
unions, businesses and their representative organisations and
individuals. They have received a good measure of support from hon.
Members on both sides of the House and from stakeholders more
generally. As well as a
formal consultation launched in February last year, we have had and
continue to have discussions with key players. We worked with an
advisory group of human resource experts set up to consider how we
could introduce these changes while easing the administration for
employers. We were clear from the start that we wanted to establish a
framework of rights and responsibilities for employers and employees,
in line with the Government’s better regulation agenda. Some of
the regulations derive from powers in the Work and Families Act 2006;
others depend on prior primary
legislation. The
regulations are due to come into force in October 2006, given our
commitment to common commencement dates for new employment legislation,
and will apply to parents if the expected week of childbirth or
placement for adoption is on or after 1 April
2007. The first main
effect of the regulations is to enable all pregnant employees to
benefit from up to a full year’s maternity leave. Under the
current rules, all pregnant employees are entitled to 26 weeks’
ordinary maternity leave, and most to a further 26 weeks’
additional maternity leave. About 20,000 women a year, however, have
not worked for their employer for long enough to qualify for the extra
six months’ leave.
If the qualifying requirement
for the second six months of maternity leave were to remain unchanged
when pay is extended to nine months in April 2007, those women would be
entitled to the extended pay, but not the leave that would allow them
to take it. The regulations therefore remove the qualifying criteria
for additional maternity leave, so that all women will be able to take
up to 52 weeks, if they so wish, and to make use of the 39 weeks of
maternity
allowance. The
extension of maternity adoption pay from 26 to 39 weeks will be done
via maternity and adoption pay regulations, which are subject to
negative resolution, and will be laid before the House shortly. The
likely effect of those measures will be that more employees will choose
to spend longer periods away from work on maternity or adoption
leave. Although that
additional flexibility will obviously be of huge benefit to working
families, we recognise correspondingly that employers will need to
manage those longer periods of time away from the workplace. The
regulations therefore introduce a number of positive measures for
employers. Before 2003, a woman
could give as little as 21 days notice to her employer before starting
her maternity leave. Employers told us that that was too little and
that it caused difficulties when arranging and managing cover, so we
extended the notice period to 15 weeks before the baby is
due. In the same
way, during last year’s consultation on working families, we
heard from employers that the 28 days’ notice that an employee
needed to give when changing her date of return from maternity or
adoption leave was simply not enough to allow them to plan ahead
properly, particularly given the extension to the pay period that I
mentioned a few moments ago. The regulations therefore extend the
period of notice that the employee must give from 28 days to eight
weeks, if she wishes to return to work earlier or later than previously
agreed. Research shows
that the more planning employees do before leave, and the more support
that they receive in the workplace, the more likely they are to return
to work at the end of that
leave. Greg
Clark (Tunbridge Wells) (Con): We all know that babies can
come unexpectedly and prematurely. Do the regulations provide for such
eventualities?
Jim
Fitzpatrick: Yes. The extension of the leave means that
mothers will have more time in which to accommodate an early or late
arrival. The flexibility that we have incorporated into the general
request for leave should be able to deal with that—most
employers are accommodating in that
regard. During the
consultation, we heard that some employers were sometimes unable to
contact employees on maternity leave and that a stronger framework was
needed to support communication between parents and their employers
during those periods. In response to that, the regulations introduce
the concept of “keeping in touch” days, which might well
deal with the point that the hon. Gentleman
raised. Such days will
allow employers and employees to agree that a certain amount of
work—up to 10 days’ work—may be done under the
contract of service during maternity leave. The corresponding pay
regulations will also provide that up to 10 of those days may be worked
without the employee losing a week’s statutory maternity pay, as
she would do under the current
rules. Those
“keeping in touch” days will of course be entirely
voluntary and may only take place by mutual agreement. Essentially,
that will be a permissive measure allowing employers and employees to
arrive at their own decisions about whether “keeping in
touch” days are for them and, if so, what they would be used
for. During consultation, we heard that “keeping in
touch” days are likely to be of particular use for things such
as training events and important annual
conferences. We
appreciate that “keeping in touch” days will not be for
everyone. In many cases, employers and employees will wish simply to
make contact with one and other, without the employee actually doing
any work—for example, to talk about plans for returning to work,
including, where appropriate, changing work patterns, or simply for an
update on developments at work during the time away. For that reason,
the
regulations allow that type of reasonable conduct during the maternity
leave to continue—indeed, the Government encourage
it. Legislation
is only one way of approaching that matter, of course, and we are
committed to providing clear and helpful guidance to accompany the new
legislation when it comes into force, and have accepted the Equal
Opportunities Commission’s recommendation that we produce a
written statement on maternity rights and responsibilities for
employers and employees. Further measures to support employers,
particularly with regard to the administration of statutory maternity
and adoption pay, will be delivered by the pay regulations to
which I
referred. The
regulations will remove the small employers’ exemption,
clarifying the rules on the right of return after additional maternity
leave, so that it is clear that a woman cannot be selected for
redundancy or dismissed—regardless of the size of the
organisation—simply because she is pregnant or on maternity
leave. As I said, the measures will directly benefit employees; they
will also benefit business and the labour market as a whole.
I turn briefly
to the other statutory instrument, which makes a technical amendment to
statutory adoption pay legislation, bringing the provisions for
unmarried couples who jointly adopt a child into line with existing
provisions for married couples and civil partners, and ensuring that
only one member of an unmarried adopting couple can receive statutory
adoption pay.
The order will
apply to adopters whose child is expected to be placed with them for
adoption on or after 1 October 2006. The number of adopters and
employers affected is expected to be very small: about 4,000 adopters
in total are eligible for statutory adoption pay each year, and only a
very small number will be affected by the order. Although the order is
not part of the working families package, we have laid it before the
House, alongside the other regulations that we are discussing, to make
more efficient use of time and ease implementation for that very small
number of people and the employers who might be affected. I commend
both the order and the regulations to the
Committee.
4.41
pm Mrs.
Eleanor Laing (Epping Forest) (Con): On behalf of
Conservative Members, I should like to say what a pleasure it is to
serve under your chairmanship, Mr.
Wilshire. For
the past year or so, we have been debating such legislation in the
Chamber and during the very long consideration in Committee of the Work
and Families Bill. All those who served on that Committee or took part
in our debates in the House on that Bill will appreciate that there is
a great deal of consensus across the political divide about what needs
to be done.
“We
have problems with the work-life balance” is one of the
expressions of modern times, and it is indeed the case. The
regulations, very reasonably, go some way towards helping that balance.
As ever, I have reservations about imposing too many regulations and
too much red tape on businesses—particularly small businesses,
which find it more difficult to deal with the rules that come out of
Whitehall; that is not surprising, given that they do not have large
human resources departments to deal with them. Despite those
reservations, I nevertheless
agree in principle with most of what the Minister has said. We shall not
oppose the
regulations. We
Conservatives recognise that getting the most out of the work force is
good for the economy and society as a whole, as well as for employers
and employees. That does not mean making everyone work from nine till
five from Monday to Friday; flexibility is key to allowing employees to
balance their family duties, which include not only child care, but
looking after elderly or sick relatives or disabled older children. We
are not talking only about producing babies, although that is the main
part of what we are considering this afternoon.
I welcome much
of what is in the orders. Some hon. Members may not have heard what I
often say in such debates, so I shall delight the Committee by saying
it again: mothers with small children who also work in the general
economy—earning money and contributing to the
economy—effectively do two jobs. We must recognise that, not
tell them that giving birth is some kind of added-on luxury. It is not;
it is necessary. We need the next generation; we need small children to
be properly cared for and nurtured, which involves improving the
work-life balance.
Maternity
leave is essential, but I continued to be concerned, throughout the
passage of the Work and Families Act 2006, about the extra regulations
being placed upon business. Again, I repeat my concerns and those of my
right hon. and hon. Friends about businesses having to cope with
regulation and red tape. We are concerned not only because of the harm
that might be done to business, but—even more
importantly—because if too many regulations are placed on
businesses in connection with maternity leave and pay, they will simply
find excuses not to employ women of child-bearing age. If that happens
and the pendulum swings too far, all that we are trying to do will be
negated. I am totally in favour of getting the right balance between
the needs of the employer and the needs of the employee and the family;
but if we go too far, businesses will not employ women and what we are
trying to do will therefore backfire, and I do not want that to
happen.
Having
expressed my concerns, I find the proposals generally welcome,
particularly regulation 8, which introduces longer periods of notice
for expectant mothers and new mothers, to make the balance between
employer and employee rather more reasonable. The Minister explained
that well and I agree with everything that he said. Likewise,
regulation 9 addresses what is colloquially known as the
“keeping in touch” issue. The previous rules were too
rigid. It was quite wrong for a woman on maternity leave not to be
allowed to go in for training days, go to the staff Christmas party or
keep in touch. It is vital that women who take maternity leave should
keep in touch with what is happening in their workplace, so that when
they are ready to return and when the employer is ready to welcome them
back, they can return at the same level as before. That is a vital
point, but it is often forgotten.
I picked up a
statistic from the Minister for Women and Equality that is such a
stunning statistic that I now repeat it more than she does. If all the
women in the UK work force were given the flexibility to work and
contribute at the level for which they had been trained and were
capable, and were thereby to fulfil their duties to their
families, rather than returning to work at a lower level after giving
birth and therefore not earning or contributing as much, our gross
domestic product would rise by 3 per cent., which is the equivalent of
our annual trade with Germany. That is a huge amount. We are talking
not about a marginal issue, but about an important social and economic
issue. Only
when the economic necessity of helping women to balance childbirth and
child care with their working lives is properly recognised will
employers and business in general accept how important it is to
understand maternity leave and be flexible about it. Women also have to
produce the next generation. That is not an added luxury. Having a baby
has sometimes brought the comment, “Well, if that’s what
she chooses to do, she can’t expect to be treated in the same
way when she comes back to work.” That is not fair or reasonable
and does not consider the issue in the round.
In general, despite the
reservations that I have mentioned many times and reiterated this
afternoon about not making it too difficult for employers to employ
women of child-bearing age, I welcome the regulations and congratulate
the Minister on introducing
them. 4.50
pm Mr.
Edward Davey (Kingston and Surbiton) (LD): I welcome you
to the Chair, Mr. Wilshire. This is my first time serving under your
chairmanship and I am sure that you will call me to order if I step out
of
line. I
welcome the regulations on behalf of the Liberal Democrats. We broadly
believe that the Government have got the balance right between
regulating business, particularly small business, and moving forward an
important agenda. If anything, the Minister underplayed the importance
of the measures in progress on family
policy. Often
in the House, we wring our hands about the family, juvenile crime and,
in the phrase used by the hon. Member for Epping Forest (Mrs. Laing),
getting the work-life balance correct. These measures are practical,
will help us to make progress and should be warmly welcomed. To use
another phrase that is in common parlance at the moment, if we spent
more time hugging babies we would probably need to hug hoodies
less. I
particularly point to the significant proposal for “keeping in
touch” days. When I studied labour economics at university, we
examined the evidence of sex discrimination in the labour market and
the analysis that had been done over the years to try to explain why,
despite all the anti-discrimination legislation, women were still paid
less than men in the
workplace. One
of the main explanatory variables shown in econometric studies to
explain the difference in salaries is that many women leave the
workplace for several years to bring up children. We can naturally
understand why that might be: those women are out of touch with the
workplace and cannot take promotion opportunities that become available
while they are on maternity leave bringing up young children.
While the regulations are a
modest answer to the problem, they are also a very welcome step in the
right direction. We must ensure, as the hon. Lady said, that when
mothers return to the workplace they do not have to step down several
rungs, but can go back at least to
the rung they were on when they left, or, I would hope, even higher.
This is an important initiative, and the Government are to be
congratulated on
it. The hon. Lady
rightly mentioned the need when passing regulations to consider their
effect on business and whether they will present a barrier to doing
business. She put in too many caveats; the balance has been wrong for
too long and these proposals will shift it in the right way. Many
progressive businesses realise the importance of that.
I can give an example of the
problem from my own time in the workplace. Before being elected to this
place, I worked in a small management consultancy firm with about 40
members of staff. The consultants were all upstairs and the support
staff downstairs. A secretary became pregnant and the issue of her
future role in the company arose. The company was managed in a fairly
draconian way by the chief executive, and he gave the secretary her
notice just before the second year was up—in those days, people
got employment rights only after two years at
work. The chief
executive gave the secretary her notice the month before she would have
gained new rights. The effect was negative not only for that lady and
her family, but for the whole firm. If that chief executive were to
review that decision, he should regret its impact on the performance
and productivity of the company. For quite a while, there was huge bad
feeling among not just the support staff, but the consultants. We
thought that we were working for a company that valued us only as work
units, not as human beings. Our lives mattered only when we stepped
over the threshold, but not outside the firm. As a result, the company
performed badly for two or three
months. I hope that my
point is clear. By embracing good employment practices, companies can
be more productive and profitable and can help to get the work-life
balance right for the affected employees, and indeed for all employees,
because of the signals that are
sent. Further to the
hon. Lady’s comments, I would be interested in hearing from the
Minister a little more about the regulatory impact assessment that was
done on the regulations. I have read it—it appears to be par for
the course—but I am increasingly concerned about getting these
assessments right not just so that we take measures that are right in
principle, but so that we understand the true costs to the Government
and, particularly, to
businesses. I do not
disagree with the regulations, but I wonder whether we should not
progressively be moving towards—leaping
towards—independent assessment of the regulatory impact. That is
not meant in any way to disparage the Department or the officials, but
when the Department does the RIA itself, outside observers are likely
to question whether the methodology is right and whether the impacts
have been underestimated, or indeed overestimated. I hope the Minister
will say something about
that. I wonder whether
there is a case for the Government administering statutory maternity
pay and so on for employers, particularly small employers. That would
really get the balance right. It would say to employers, “We are
going the extra mile and taking the cost burden of administration from
you. Society says that
these measures are right for our children and the future work force. We
shall take the burden from you, but we ask you to adopt best
practice.” That would be a step forward, and I hope the Minister
indicates that he is at least willing to contemplate
it. 4.57
pm
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