3Parental and Carers’ Leave Directive
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Committee’s assessment |
Legally and politically important |
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Not cleared from scrutiny; further information requested; drawn to the attention of the Business, Energy & Industrial Strategy Committee, the Women & Equalities Committee, and the Work & Pensions Committee |
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Document details |
Proposal for a Directive on work-life balance for parents and carers, and repealing Council Directive 2010/18/EU. |
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Legal base |
(a) Article 153(1)(i) and (2)(b) TFEU; ordinary legislative procedure; QMV |
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Department |
Business, Energy and Industrial Strategy |
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Document Number |
(38689), 8633/17 + ADDs 1–3, COM(17) 253 |
Summary and Committee’s conclusions
3.1In April 2017, as part of a new push to modernise the EU’s social policy framework,8 the European Commission published a proposed Directive on statutory entitlements to parental and carers’ leave for workers.9 The draft legislation would establish EU-wide statutory minimum requirements for paid paternity, parental and carers’ leave for workers with an employment contract. The Commission has proposed that Member States should compensate workers who make use of any of the leave entitlements under the Directive by at least the same amount as national sick pay.
3.2The Government has told us that the proposal would make substantial changes to existing UK law on statutory rights for workers, for example by creating an entirely new entitlement to paid carers’ leave, and that the full cost of the new Directive to the Exchequer and to businesses could run into hundreds of millions of pounds annually.10 The Minister has not shared the Government’s position about the legal base for the proposal, Article 153 TFEU, which gives the EU a supporting competence to adopt minimum-harmonising Directives in the field of social policy.
3.3The Committee first considered the proposal when it was reconstituted following the 2017 general election, in November 2017.11 We took note of the changes the draft legislation would require within UK employment law, since it creates employees’ entitlements that do not currently exist. We also considered that the potential impact of the proposal should not be understated despite the UK’s scheduled exit from the EU, as it could have force of law under the terms of a post-Brexit transitional arrangement.12 Accordingly, we retained the document under scrutiny as politically and legally important.
3.4By letter of 16 January 2018, the new Minister for Small Businesses (Andrew Griffiths) provided the Committee with more detail on the Government’s position on the proposal.13
3.5The Minister emphasised the UK’s commitment to “facilitating the balance of work with family and other commitments”. However, the Government is not yet convinced that legislation at EU-level is the best way of achieving this objective and will seek to “retain as much flexibility as possible for Member States to maintain or develop their own systems of leave and pay for workers with caring responsibilities”. With respect to Brexit, he states the Government cannot yet “provide certainty at this stage on whether the UK will be obliged to continue implementing EU Social and Employment legislation”. Given this remains a possibility, the Government will continue to “actively engage on current EU legislative proposals, assessing policies on their merits”.
3.6Based on a progress report prepared by the Estonian Presidency in December 2017,14 we have summarised the broad direction of travel within the Council—especially on the controversial issue of setting the level of pay for carers’ and paternal leave via EU legislation—in paragraph 3.18 below. This shows Member States are likely to press for caps on the level of pay below the limits foreseen by the Commission, or even removing the requirement to provide compensation for loss of salary altogether. The Council also looks set to recommend changes to the scope of the carer’s leave entitlement by defining the conditions under which the Directive would apply more strictly.
3.7The Minister confirmed that Bulgarian Presidency of the Council hopes to broker a general approach on the proposal at the meeting of the EPSCO Council on 15 March. As the Employment & Social Affairs Committee of the European Parliament has provisionally scheduled a vote on the proposal for July 2018, trilogue negotiations on the final text of the Directive could take place in the second half of 2018.
3.8We thank the Minister for his update on the Government’s position on the proposed Directive, which now appears ready for endorsement at ministerial level during the EPSCO Council on 15 March.
3.9The information at our disposal on the position taken by Member States in the Council indicates that the final Directive may require less drastic changes to existing statutory leave entitlements for workers in the UK compared to the original Commission proposal. This would of course also be subject to the views of the European Parliament as co-legislator on EU employment law. We ask the Minister to keep us informed of further developments in the negotiations on the Directive, and to provide us with the draft general approach in good time before the March EPSCO Council to allow us to consider its contents before deciding whether to grant a scrutiny waiver.
3.10Continued scrutiny of this proposal remains important, because the post-Brexit transitional arrangement offered by the EU—during which the UK effectively retains its current position within the EU’s internal market—would require the continued application of EU law in the UK. The other Member States have explicitly referred to the obligation to implement EU law which takes effect only during that post-Brexit period. That may include this new Directive on leave entitlements, if it takes effect before or during the transition.
3.11We draw these latest developments to the attention of the Business, Energy and Industrial Strategy Committee, the Work and Pensions Committee and the Women and Equalities Committee. They may wish to consider how these proposed EU statutory requirements for paid and unpaid leave might affect workers and businesses in the UK.
Full details of the documents
Proposal for a Directive on work-life balance for parents and carers, and repealing Council Directive 2010/18/EU: (38689), 8633/17 + ADDs 1–3, COM(17) 253.
Background
3.12In April 2017, nearly ten years after a failed attempt to update the EU’s Maternity Rights Directive, the European Commission proposed a new EU Directive on statutory entitlements to parental and carers’ leave.15 It is part of a wider effort by the European Commission to revise and update the EU’s corpus of employment and social law, in line with the ambitions set out in the European Pillar of Social Rights as adopted in November 2017.16
3.13The draft legislation aims to improve access to work-life balance arrangements such as leave and flexible working arrangements, in particular by men, by introducing new entitlements for paternity and carers’ leave, but leaving the current EU minimum requirements for maternity leave unamended. The Directive as proposed by the Commission would establish the following minimum statutory requirements for paid paternity, parental and carers’ leave for workers with an employment contract:
- a right to paid paternity leave for fathers for at least 10 days at the time of the birth of their child;
- a right to four months of paid parental leave for both mothers and fathers during the first twelve years of each of their children’s lives. This leave entitlement cannot be transferred to the other parent, but can be taken flexibly (e.g. full-time, part-time or in separate blocks) to encourage take-up by men; and
- a carer’s entitlement to five days’ paid leave annually for the purposes of providing care.
3.14The proposal would also require EU countries to ensure that workers who take leave under any of the above entitlements “receive a payment or an adequate allowance at least equivalent to what the worker concerned would receive in case of sick leave”. This leaves individual Member States free to legislate for higher pay during periods of leave under the Directive, for example by linking it to a worker’s normal salary.
3.15The Minister for Small Business (Margot James) submitted an Explanatory Memorandum on the proposal in July 2017.17 She noted that that the entitlement to paid carers’ leave would be a “completely new entitlement” in the UK from which workers could benefit. In addition, the Minister explained that the provisions of the proposed Directive dealing with paid paternity and parental leave would cut across existing domestic legislation to a lesser or greater extent, in particular in respect of paid parental leave.18 She added that the full cost of the new Directive to the Exchequer and to businesses were difficult to predict, but could run into hundreds of millions of pounds annually.
3.16The Committee first considered the proposal when it was reconstituted following the 2017 general election, in November 2017.19 While noting that the draft legislation would make “substantial changes to the current entitlements to leave for working parents and carers in the UK”, we were disappointed that that the Minister did not provide an assessment of the merits of the Commission proposal, nor make explicit the Government’s position on it. We asked the Minister to provide such an assessment.
3.17In the context of the UK’s withdrawal from the EU, the Committee also considered that the legal and political importance of the new Directive should not be understated. During the proposed post-Brexit transitional period, UK will most likely continue to be bound by EU employment law.20 The Parental and Carers’ Leave Directive may have to be transposed into UK law if it takes effect during the transition, the length of which is yet to be determined in negotiations between the Government and the EU.
Developments since November 2017
3.18Within the Council, Member State representatives have discussed the draft Directive on a number of occasions since it was published in April 2017. EU Employment Ministers considered the proposal at the meeting of the EPSCO Council in Brussels on 7 December 2017.21 At that point, all Member States retained a general scrutiny reservation on the Directive, showing the level of controversy around the draft legislation. In particular, discussions within the Council working party had shown:
- while most countries supported the proposal for an EU-wide minimum standard for paternity leave, they sought clarification that the 10-day leave entitlement would be calculated pro-rata for part-time employees. There was no consensus on using a more “gender-neutral term” for this entitlement. There was no agreement yet on an EU-level requirement for paternity leave to be compensated by at least the same amount as sick pay;
- with respect to paid carers’ leave, many Member States were sceptical of the need for any EU legislation on this matter. They also questioned the scope of this provision (in relation to which family members, and the severity of their condition, which could trigger the entitlement), and whether an entitlement of five days could make any practical impact on the division of caring responsibilities between men and women. Most Member States did not want any minimum pay level for carers’ leave defined in the Directive;
- most national governments opposed the proposed changes to the length of, and compensation for, non-transferable parental leave. They expressed particular concern about the potential financial impact of having to compensate workers with the equivalent of sick pay during the proposed four-month period. As a result, the Estonian Presidency recommended reducing the non-transferable allowance of parental leave to three months, and allowing for the introduction of a cap on compensation during that period in line with the national ceiling for sick pay; and
- more generally, as can be seen, most EU Member States expressed concerns about requiring compensation at least equivalent to national sick pay during periods of leave under any of the entitlements proposed by the European Commission. The Presidency therefore suggested an amendment that would allow individual EU countries to cap entitlements equivalent to sick pay under the Directive (i.e. for paternity leave and non-transferable parental leave) to twice the “average national monthly gross wage”.22
The Government’s view
3.19On 18 January 2018, the new Parliamentary Under Secretary of State for Small Business (Andrew Griffiths) wrote with further information on the Government’s position on the proposal.23
3.20He emphasised the Government’s commitment to facilitating the balance of work with family and other commitments, but that the Directive should “not disrupt existing national systems unfavourably”. In addition, the UK is not yet convinced that legislation at EU-level is the best way of achieving this objective. As such, it will seek to “retain as much flexibility as possible for Member States to maintain or develop their own systems of leave and pay for workers with caring responsibilities”.
3.21The Minister confirmed that Bulgarian Presidency of the Council hopes to broker a general approach on the proposal at the meeting of the EPSCO Council on 15 March. As the Employment & Social Affairs Committee of the European Parliament has provisionally scheduled a vote on the proposal for July 2018, trilogue negotiations on the final text of the Directive could take place in the second half of 2018.
3.22With respect to Brexit, the Minister states he could not “provide certainty at this stage on whether the UK will be obliged to continue implementing EU Social and Employment legislation”. Given it remains a possibility, the Government will continue to “actively engage on current EU legislative proposals, assessing policies on their merits”. The Committee has kept the proposal under scrutiny and will report any further developments to the House.
Previous Committee Reports
See (38689), 8633/17: Third Report HC 301–iii (2017–19), chapter 1 (29 November 2017).
8 See for more information the Committee’s Report of 29 November 2017 on the “European Pillar of Social Rights”.
9 In July 2016, the Commission had asked the EU social partners (trade unions and employer’s organisations) if they wanted to negotiate an agreement among themselves on parental and carers’ leave entitlements, but no talks took place because the positions of the two sides were too far apart.
10 Explanatory Memorandum submitted by the Department for Business, Energy & Industrial Strategy (6 July 2017).
11 See Committee Report of 29 November 2017.
12 The position of the other EU Member States is that the transitional arrangement sought by the Government, to maintain current levels of market access to the EU after Brexit, would require the UK to continue applying all EU law—including new legislation which takes effect only during the transition.
14 Progress report prepared by the Estonian Presidency (Council document 14280/17).
15 In July 2016, the Commission had asked the EU social partners (trade unions and employer’s organisations) if they wanted to negotiate an agreement among themselves on parental and carers’ leave entitlements, but no talks took place because the positions of the two sides were too far apart.
16 See the Committee’s Report of 29 November 2017 for more information on the European Pillar of Social Rights.
17 Explanatory Memorandum submitted by the Department for Business, Energy & Industrial Strategy (6 July 2017).
18 Domestic UK law provides for unpaid parental leave for a period of up to 18 weeks for all parents for each child, which can be taken up until the child’s 18th birthday. The Commission went considerably further by proposing an entitlement to 4 months of non-transferable parental leave per parent, compensated at least at the level of sick pay, although the leave must be taken before the child turns 13 years old.
19 See Committee Report of 29 November 2017.
20 The other 27 EU Member States have offered a post-Brexit transitional period on the condition that the UK continue to accept the entire body of EU law, under the principles of supremacy and direct effect, for its duration.
21 See for more information the progress report prepared by the Estonian Presidency of the Council (Council document 14280/17).
22 It was unclear from the text of the Presidency’s report whether this overall ceiling would apply per month or for the duration of the entitlement cumulatively.
2 February 2018