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The Work and Families Bill was introduced in the House of Commons on 18th October 2005. The Bill's main purposes are to:
- make it possible for regulations to be made extending the maximum period for which statutory maternity pay, maternity allowance and statutory adoption pay are payable from 26 weeks to 52 weeks
- introduce a new scheme that will allow employees (generally fathers) to take paid leave to care for a child, if certain conditions are met
- extend the existing law on flexible working to enable more people with caring responsibilities to request to work flexibly
- allow a one-off increase to be made to the maximum amount of a week's pay which may be taken into account in the calculation of such payments as redundancy payments
- provide a new power to make provision about annual leave.
The following notes explain the contents of the Bill in more detail. It must be understood that the provisions of the Bill are subject to the normal Parliamentary processes and may therefore change to varying extents before becoming law. The measures contained in the Bill are expected to take effect from April 2007.
Maternity and adoption leave and pay
Current legislation defines the maximum period for which maternity and adoption pay may be paid as 26 weeks. As the Government's intention is to extend the period of paid maternity and adoption leave to 39 weeks from 1st April 2007 and, in due course, to a full year, the legislation will be amended to fix the maximum period for which maternity and adoption pay may be paid as 52 weeks. The increase in the maximum also applies for state maternity allowance.
A number of other changes are to be made to the maternity and adoption leave and pay rules to make their administration easier for employers:
- To bring maternity pay into line with adoption and paternity pay, the maternity pay period will start on any day of the week, instead of a Sunday
- A woman or adoptive parent will be permitted to undertake a few days' training or work, in prescribed cases, during part of a week without losing entitlement to SMP or SAP for the entire week or having to end her leave. These days are known as "Keeping in Touch Days". (See also Maternity allowance, below)
- The weekly rate of SMP, SPP and SAP will also be defined as a daily rate, allowing employees whose pay periods are not a week or a multiple of a week to be paid more precisely. For example, a monthly-paid employee will be able to be paid an amount that reflects the number of days in each month.
These changes are expected to come into effect for women whose expected week of
confinement is 1 April 2007 or later - some of whom will have commenced their SMP
period during 2006/07. For individuals claiming SAP, entitlement under the new provisions will commence where the date the child is placed is 1 April 2007 or later.
Entitlement to additional maternity leave
Entitlement to 12 months of maternity leave is to be extended to all women. Currently, only those with six months' service are entitled to additional maternity leave. To provide entitlement to 12 months' leave to all women will mean removing that condition. No reference is made to this measure in the Bill as published and it will be introduced by future changes to regulations.
Notice of return to work
The notice period that an employee must give to return from leave early is to be increased from 28 days to 8 weeks. No reference is made to this measure in the Bill as published and it will be introduced by future changes to regulations.
Maternity allowance
Maternity allowance is paid to women who do not qualify for statutory maternity pay with their employers. The current maternity allowance rules mean that a woman loses maternity allowance for any day on which she works for her employer. The Bill will allow regulations to be made that will permit a woman to undertake the occasional day of training, appraisal or work without losing her maternity allowance for that day. The object is to allow better contact and communication between the woman and her employer during her maternity absence and to ease the woman's eventual return to work.
Additional paternity leave and pay
The existing right to paternity leave allows fathers, or adoptive fathers and mothers, to take up to two weeks' paid leave around the time of a birth or adoption. The new Bill will make it possible for a new right to paid additional paternity leave to be introduced. At the same time, "paternity leave" will be renamed "ordinary paternity leave".
The Bill defines only the framework of the new right and the conditions that must be met for entitlement; the detail will be provided in future regulations. The Government's intention is to allow some or all of the additional 13 weeks of maternity and adoption leave, i.e. the period following the first 26-week period, to be taken by the father instead of the mother, or by the other adoptive parent. Additional paternity leave would be conditional on the mother or other adoptive parent returning to work after the first 26 weeks. Payment would be at the standard weekly rate.
However, the Bill sets the maximum period for paid additional paternity leave at 26 weeks, so the intention is presumably that, when paid maternity and adoption leave are eventually extended to a whole year, the father or other adoptive parent will eventually be able to choose to take all of the second 26-week period as paid additional paternity leave.
Regulations will also define the terms and conditions that will apply during and after additional paternity leave and the obligations on the employee that arise under those terms and conditions.
Additional statutory paternity pay will be administered in the same way as the other statutory payments and employers will be able to recover most or all of their payments, as at present.
Flexible working
The right to apply for a contract variation in order to care for a child under the age of 18 were introduced in April 2003. The regulations currently provide that the employee must have been continuously employed for no less than 26 weeks and must be the mother, father, adopter, guardian or foster parent (or the partner of, or married to, one of those people) of the child concerned.
The new Bill will widen the scope of the existing law by allowing applications to be made by persons who have caring responsibilities for adults aged 18 or over. The relationship that will have to exist between the employee making the application and the person receiving the care will be defined in regulations.
Annual leave
The current right to four weeks' paid annual leave, as set out in the Working Time Regulations 1998, meets the UK's obligations under the European Working Time Directive. The Government has no current statutory authority of its own that allows the annual leave provisions to be improved. In particular, the Government wishes to change the rules so that any bank and public holidays to which employees are entitled do not count towards the four weeks.
To make this and any other change possible, the Bill introduces a new domestic power to make provision about holiday pay entitlements. This will allow the Government to change any aspect of statutory holiday pay, as long as the minimum requirements of the Working Time Directive are still maintained. Areas of potential change include
- the annual period of leave
- the level of pay that must be paid
- the employee's choice as to when to take leave, subject to and the employer's right to say when leave may or may not be taken
- payment of compensation to employees who have not taken leave to which they are entitled
- the relationship between statutory holiday and contractual holiday entitlements
- the right to make a complaint to an employment tribunal for breaches of the rules
- who is a "worker" and who is a worker's employer.
The maximum amount of a week's pay
The Employment Rights Act 1996 imposes a limit of £;280 on the amount of a week's pay that may be paid in respect of
- payment made by the State in the event of the insolvency of an employer, e.g. arrears of pay and holiday pay
- compensation payments awarded by employment tribunals, and
- statutory redundancy payments.
The limit is reviewed annually using a formula set out in the Employment Relations Act 1999. This provides that the limit must be increased or decreased each year to reflect the increase or decrease in the retail prices index at the previous September, with the result rounded to the nearest £;10. In recent year, this formula has prompted increases in the limit of £;10 each year. It is likely that the limit will increase to £;290 from April 2006.
The measure introduced by the Bill will allow the Government to increase the limit on a single occasion by a higher amount than would otherwise apply, and for that increase to replace the statutory review rules for that year.
...back to 27 October 2005
Source:
Work and Families Bill
Work And Families Bill
Work and Families
Work and Families: Choice and Flexibility
Work and Families
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For Payroll and Human Resource Professionals
