An equal endeavour? Maternity Acon’s vision for replacing Shared Parental Leave with a more equitable system of maternity & parental leave

Summary

The COVID19 pandemic and economic lockdown has cast a harsh light on deep structural inequalies in UK society. And, amid broad consensus that the Shared Parental Leave & Pay scheme introduced in 2015 is an inequitable and chronically failing policy in desperate need of an overhaul, this presents a serious challenge to the Government’s laudable ambion to “give working parents the choice and flexibility they need to combine work with family life”.

In short, the Shared Parental Leave scheme relies on robbing Petra to pay Paul.

Major reform is urgently needed. So this briefing papers sets out Maternity Acon’s vision for replacing both the Shared Parental Leave scheme and the exisng statutory maternity and paternity leave provisions with a new system of maternity, birth and parental leave, based on individual, non-transferable (i.e. ‘use it or lose it’) rights to flexible and beer paid leave for both parents. 2

Introducon

“Is the coronavirus crisis taking women back to the 1950s?” Financial Times, June 2020

“Is the pandemic sending us back to the 1950s when it comes to taking care of the home?” Observer, June 2020

“Lockdown sent working mothers like me back to the 1950s” Telegraph, August 2020

Three newspapers, three very similar headlines. And the similarity is not just a coincidence. As Sonia Sodha explained in the Observer in June:

“The [COVID19] lockdown has put the vicious cycle that is the Gender Pay Gap on steroids. The Gap exists from the moment men and women start work, but it gets progressively wider once people become parents: women are more comprehensively compensated to take me off work and – because they already earn less than men – it makes more financial sense for mothers to work part-me aer having children, stymying their career progression. This effect is being replicated in the lockdown: it is mothers who are cung back their hours to pick up the slack at home.

The result is that women [have been] doing less paid work and more domesc labour. Mothers are 47% more likely to have lost their job, quit or been furloughed than fathers. What’s more, the proporon of mothers who report being responsible for 90-100% of childcare has risen from 27% to 45% during the lockdown, with seven in 10 mothers saying they are completely or mostly responsible for home schooling.”

In short, such impacts of the pandemic and economic lockdown pose a serious challenge to the Government’s stated ambion to “give working parents the choice and flexibility they need to combine work with family life”. And, as the Government notes, such flexibility “not only helps individual parents, it also helps the people that they work for: employers have access to a wider pool of talent and are beer able to culvate and retain that talent”. Furthermore:

“This maers for the wider economy too. People are at the heart of our modern Industrial Strategy and the government is clear that boosng labour market parcipaon among underrepresented groups such as women, and parcularly mothers, supports economic growth and helps narrow the employment and gender pay gaps.”

However, as Sonia Sodha went on to note in the Observer in June, “the lockdown could also offer a sliver of opportunity. Many men who have been furloughed [have spent] more me with their children; though men sll do less childcare, it has significantly increased during lockdown”:

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“That’s the thing about this pandemic: it has revealed deep structural inequalies that we have long swept under the carpet, and without concerted and radical acon it will undoubtedly make them worse. But the very act of exposure provides an opportunity for change if only we had the imaginaon.”

Maternity Acon very much agrees. And a key area for such imaginave reform is the deeply flawed and chronically failing Shared Parental Leave & Pay scheme, created by the Conservave and Liberal Democrat Coalion Government under the Children and Families Act 2014.

Since the relevant provisions came into force in April 2015, new mothers are sll legally required to take the first two weeks of maternity leave. But they can then exchange their maternity leave for Shared Parental Leave, and transfer up to 50 weeks of that leave (up to 37 weeks of it paid) to the father or other parent.

In 2014 and 2015, the TUC and others warned that many new parents would not qualify for Shared Parental Leave, leaving hundreds of thousands of new fathers with no statutory right to me off work in the year following the birth of their child, other than two weeks of paternity leave. Employers expressed understandable concern about the complexity of the Regulaons governing the transfer of leave. And many groups, including Maternity Acon, feared that this toxic combinaon of transferability, administrave complexity and limited eligibility would greatly undermine the value and impact of the new policy.

Sadly, those warnings and concerns have proven to be well-founded, with evidently dire levels of take-up by parents leading the Fatherhood Instute to conclude that the Shared Parental Leave & Pay scheme is “an inequitable and failed policy”. The TUC agrees that, five years on, the policy “has had very lile impact” and “needs a total overhaul”. And Working Families notes that “the case for improving leave entlements for fathers and partners is now more urgent than ever”.

Similarly, in October 2020 the Commission on a Gender-Equal Economy noted:

“At the root of women’s disadvantage in the labour market is inequality in unpaid work. A crucial point for the development of the Gender Pay Gap is having children. 75% of mothers face pregnancy or maternity-related discriminaon, and the overall gender pay gap is most pronounced for the over-40s. Implemenng equal parental and caring leave policies is a crucial step to addressing this.”

The failure of Shared Parental Leave

It is important to recognise that Shared Parental Leave has not failed due to any lack of promoon or awareness, or a lack of demand on the part of parents. The scheme has failed as a policy because of its inherent design flaws and complexity. Even the name is faulty: Shared Parental Leave is really ‘transferable maternity leave’, as the scheme creates no addional parental leave entlement, and simply ‘enables’ mothers to transfer all but two weeks of their leave to the father or other co-parent.

An equal endeavour? October 2020 4

In short, the scheme relies on robbing Petra to pay Paul.

The principal flaws in the design of the Shared Parental Leave scheme are:

• The transferable nature of the scheme means that, if the mother (not unreasonably) wants to use most or all of her maternity leave entlement, there is lile or no leave available to the father (or other co-parent). Yet the designers of the scheme knew that the average number of weeks of statutory maternity leave taken by mothers was then 39 weeks – that is, the full entlement of paid leave. And 45% of mothers took more than 39 weeks of maternity leave.

• This transferability also makes the scheme extremely complex, and as a result it is very poorly understood by both employers and parents. A constant complaint from employers is that employment law is too complex and difficult to administer, especially for smaller employers without a human resources specialist, and Shared Parental Leave is one of the worst examples.

• The scheme fails to protect a reasonable period of maternity leave (beyond a minimal two weeks) for the mother. While in theory mothers are supposed to be the ‘gatekeepers’ under the scheme, in pracce some women who have contacted Maternity Acon’s advice lines say they had no opon but to transfer the majority of their maternity leave to the father or co-parent, because the laer had access to higher paid leave.

• The complex eligibility provisions depend on the employment status and earnings of two parents, which reduces the likelihood that a couple will between them meet the eligibility criteria. Fathers and other co-parents have felt parcularly aggrieved that no new rights have been created for them to take leave, and that they can only access leave by taking it away from the mother.

• The transferable nature of Shared Parental Leave has resulted in the adopon of parcularly complex enhanced contractual leave and pay policies by some employers, parcularly in the public sector. These include: sliding scales of pay, higher rates of pay for leave taken close to the birth, and deducons of paid leave in respect of the maternity leave and pay taken by the mother. This has prevented many parents from taking leave in the way they would like to – for example, the mother taking six months of leave while breaseeding, then the father taking three months of paid leave when the mother returns to work.

Unfortunately, robust data on take-up of Shared Parental Leave is prey much non- existent, with the key problem being that no one knows exactly how many new fathers are eligible for Shared Parental Leave each year. But we do know that that number is most likely in the range of 250,000 to 300,000 (in 2013, the Coalion Government esmated there would be some 285,000 eligible fathers each year).

We also know, from various Freedom of Informaon requests to HMRC, that only 8,500 fathers received Shared Parental Pay in 2018/19. So, five years aer implementaon, few believe that take-up of Shared Parental Leave has reached

An equal endeavour? October 2020 5 beyond the mid-point of the Coalion Government’s somewhat gloomy 2013 predicon of 2-8% of eligible fathers.

In November 2017, when pressed by MPs on the Women & Equalies Commiee on the level of take-up of Shared Parental Leave that the Government would like to see, the then business minister, Margot James stated: “I would regard 25% as successful [and] anything over 20% as very encouraging. We are not going to see those figures.”

Worse sll, there were 640,000 births in 2019. So, only about 1% of all new fathers are accessing Shared Parental Leave to spend me off work in the first year of their new child’s life. No wonder, then, that the UK is ranked only 34th out of 41 OECD countries for its family-friendly policies by UNICEF.

That is simply not good enough, if the aim is to tackle the widespread pregnancy and maternity discriminaon in our workplaces, and the Gender Pay Gap, by enabling a societal shi towards more equal parenng. And five years is long enough to tell us that we cannot expect much more from Shared Parental Leave. In March 2018, the Women & Equalies Commiee of MPs concluded:

“The Government’s objecve is for mothers and fathers to share the task of caring for their children more equally. The current Shared Parental Leave policy will not achieve this on a large scale, as the Government’s own esmates of take-up show.

The maternal transfer design of the current policy of shared parental leave and the low rate of pay militate against fathers, likely to be the higher earner, taking it up in significant numbers. The policy reinforces rather than challenges tradional gender roles and therefore undermines government objecves on fathers sharing care and mothers being supported back into the workplace if they wish.”

Principles for reform

The good news is that five years’ experience of Shared Parental Leave confirms the lessons we could and should have learnt from the impact of parental leave policies in other countries. In short, the most successful approaches in other countries – such as those in Sweden, Norway and Iceland – are based on individual, non- transferable rights for each parent, and on all leave being moderately well paid.

In April 2019, the TUC suggested that the Shared Parental Leave & Pay scheme “needs a complete overhaul in line with the following core principles”:

• All workers must have the right to access parental leave and spend me with their newborn children, regardless of employment status.

• Financial support for those accessing leave must be increased.

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• Parents should be entled to access parental leave from day one in their jobs.

Furthermore, the TUC said, “we want to see parents other than the mother/adopter get the right to a longer period of leave following the birth of their child, to be used at any point in the year following the birth. These parents should be eligible for this leave in their own right. Currently, access to Shared Parental Leave depends upon a mother giving up part of her maternity leave. The new leave entlement must not affect mothers’ exisng entlements to maternity leave and pay: it should be accessible to all, available from day one and offer a level of financial support that doesn't put off people looking to take advantage of it.”

The Government’s own evaluaon of the Shared Parental Leave & Pay scheme is now somewhat overdue. In 2017, the then business minister told the Women & Equalies Commiee of MPs that the evaluaon would be completed in 2018. And in 2019 ministers stated that it would be completed and published by the end of the year.

However, ministers have acknowledged that “we are only seeing gradual increases in parents taking Shared Parental Leave and Pay”, and that “we need to do more to tackle gender inequality at home and in wider society”. And, in July 2019, the Government launched a consultaon intended to “explore opons for enabling more women to combine having a family with pursuing their career, and enabling more men to play a greater part in childcare”.

In November 2019, for their responses to that consultaon, Maternity Acon and other key stakeholders in the sector – including the Fatherhood Instute, the Fawce Society, the Women’s Budget Group and Working Families – agreed some further principles for reform, including:

• The [new] system must be simple and easy to understand for both parents and employers while enabling flexibility for parents, including some me off together if that’s what they want.

• Maternity leave is important because mothers need to recover from childbirth, and may breaseed their new baby.

• Leave for fathers to care for their infant alone is important to lay the ground for fathers’ role in caring for children.

• Time off and pay should be available to all working parents – including those classified as ‘workers’, and the self-employed – from the start of their employment as an individual right. As the Commission on a Gender-Equal Economy noted in October 2020, “the number of self-employed women has increased at almost double the rate of self-employed men in the past ten years. While self-employment remains a posive opon for those who are established and have personal assets, almost one-third of the self-employed, disproporonately women, are low-paid and insecure.”

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• The [new] system should ensure that parents have the right to return to the same job aer taking leave and are protected by law from losing their job during their leave or when they return to work, through discriminaon or unfair redundancy.

• Parental leave and pay policies should work alongside a ‘part-me and flexible by default’ UK labour market and a more affordable childcare system that ensures work pays from the day parents return to work.

In line with these principles, Maternity Acon has proposed a simple, 6+6+6 model of statutory maternity and parental leave, to replace both the exisng statutory maternity and paternity leave provisions, and the chronically failing Shared Parental Leave scheme. This would consist of six months of statutory maternity leave and pay reserved for the mother, and six months of non-transferable (‘use it or lose it’) parental leave for each parent.

Maternity Acon’s proposed model

Maternity leave

Pregnancy and childbirth is not an equal endeavour on the part of two parents: fathers simply do not play an equal part in the biological and physical endeavours of pregnancy, childbirth and breaseeding. So any new system of statutory parental leave needs to protect women’s exisng rights to me off work in late pregnancy, and to have me at home to recover from the oen considerable physical and/or mental impact of childbirth. As the TUC noted in its response to the July 2019 consultaon, “exisng maternity rights and protecons must not be diminished in any way.”

Maternity Acon’s advice lines hear from all too many women pressurised back to work from maternity leave too early, out of fear of losing their job. And, as much as we want to see more equal parenng, the boom line is that fathers’ and other co- parents’ experience of pregnancy, miscarriage and sllbirth, childbirth and the early care of a new baby is not the same – and not as demanding – as that of the mother.

So our proposed 6+6+6 model includes six months of non-transferable (and beer paid) maternity leave reserved for the mother. Plus, as now, all new fathers (and other co-parents) would get two weeks of non-transferable (and beer paid) paternity leave, available to be taken at or soon aer the me of birth. Accordingly, under our model, paternity leave would be renamed as birth leave.

Parental leave

In addion to the six months of maternity leave reserved for the mother, and two weeks of birth (paternity) leave reserved for the father or other co-parent, our proposed 6+6+6 model includes six months of non-transferable parental leave for each parent. This would give mothers a combined leave entlement of up to 12 months – that is, the same as now. And it would give fathers and other co-parents a total leave entlement of up to 28 weeks – that is, 26 weeks more than now.

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This six months of parental leave could be taken together or separately by the two parents, giving a combined maximum of up to 18 months, if all leave is taken consecuvely. And the leave could be taken all in one go, or in smaller blocks of weeks or months at different mes, up to 18 months aer the birth.

Providing more paid parental leave for fathers and other co-parents is more likely to incenvise men to take periods of separate, solo leave for childcare reasons, rather than taking a longer period of leave immediately or soon aer the birth, to support the mother.

Maternity, birth and parental leave pay

At least as important as the amount of statutory parental leave, however, is the rate at which it is paid. The current, ludicrously-low standard rate of statutory maternity, paternity and shared parental pay – £151.20 per week – equates to just 49% of the Naonal Living Wage (for someone aged 25 or over, working a 35-hour week), and to only 40% of the Living Wage Foundaon’s living wage (outside London), which is independently-calculated as the minimum that people need to get by.

Indeed, it is principally this very low rate of pay that leads to the UK being ranked only 34th out of 41 OECD countries for its family-friendly policies by UNICEF. As the TUC noted in November 2019, “if a poron of leave is not specifically designated for [fathers] and remunerated at a rate they and their families can afford to live on, few men will take it, placing the responsibility for caregiving overwhelmingly on women and thereby reinforcing inequalies at home and at work.”

Maternity Acon suggests that, at the very least, the standard rate of pay needs to be doubled, to £300 per week – equivalent to working full-me on the Naonal Living Wage (i.e. the legal minimum wage). But, in the longer run, we believe it needs to go higher sll, towards eventual party with the real living wage.

So, under our 6+6+6 model, the first six weeks of maternity leave would be paid at 100% of average earnings (rather than 90% as now), with the remaining 20 weeks paid at a flat rate of £300 per week (or at 100% of average earnings, if that is lower).

The two weeks of birth (paternity) leave would also be paid at 100% of average earnings, rather than at the current flat rate of £151.20 per week, to encourage take- up, while all parental leave would be paid at the flat rate of £300 per week (or at 100% of average earnings, if that is lower).

The origins of paternity leave are grounded in health and safety, and are linked to the father’s (or co-parent’s) need to take me off work to support the mother as she recovers from childbirth. Accordingly, Maternity Acon believes the priority for reform is to enhance the rate at which such birth (paternity) leave is paid, rather than to extend its duraon – fathers (and other co-parents) should not be deterred from taking birth (paternity) leave by the impact on family income.

Furthermore, fathers and co-parents should have choice and flexibility over when to take parental leave, rather than having a longer period of higher-paid leave that is

An equal endeavour? October 2020 9 restricted to near the me of birth. Under our 6+6+6 model, fathers and co-parents would have the flexibility to take up to six months of paid leave – all in one go or in blocks of weeks or months – at any point between the end of birth (paternity) leave and 18 months aer the birth.

However, under our model, the higher (average earnings) rate of pay for the first six weeks of maternity leave, and for the two weeks of birth (paternity) leave, would be capped at the weekly equivalent of £100,000 per year, which is the maximum taxable income for eligibility for tax-free childcare.

Access to maternity, paternity & parental leave

Under our 6+6+6 model, access to maternity, birth (paternity) and parental leave and pay would all be ‘day one’ rights, available to all workers irrespecve of employment status and length of service, including agency workers, those on zero-hours contracts, and the self-employed. And the rights to leave would be underpinned by a clearer and stronger right to return to the same job.

The only excepons to the right to return to the same job should be situaons of genuine redundancy, or the closure of a business or part of the business. This would beer protect parents and help to remove sgma around the taking of parental leave, by sending the message to employers that taking parental leave is not an opportunity to replace employees, alter responsibilies or demote staff who are taking leave.

Under our proposed model, a single mother would be entled to the same amount of leave and pay as a mother in a couple relaonship. Our model does not allow for any transferability so, in cases where the father is absent and does not wish to take his birth or parental leave entlement, his leave would not be transferable to anyone else. Instead, we would like to see greater government investment in childcare to ensure that single mothers have unrestricted access to affordable childcare from the point at which they return to work.

Conclusions

There is now no real disagreement that the Shared Parental Leave scheme is a failed policy that will never achieve its aim of facilitang more equal parenng. The scheme is complex and widely misunderstood. It has not transformed or even significantly increased take-up of leave by fathers, and has therefore had negligible if any impact on equal parenng and gender equality. It does not adequately protect maternity leave for mothers, and the implementaon of enhanced contractual leave pay policies by employers has added further complexity, restricng the ability of parents to take Shared Parental Leave in the way many wish to.

Accordingly, Maternity Acon believes the government should abolish the Shared Parental Leave and Pay scheme at the earliest opportunity, and replace both the scheme and the exisng maternity leave and pay provisions with our proposed 6+6+6 model. In the words of the TUC:

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“A reformed parental leave system that enshrines the individual, non- transferable rights of both parents, rebalancing childcare responsibilies between [mothers and fathers] and protecng parents from discriminaon would ensure [the Government] beer meets its objecves of reducing pregnancy and maternity discriminaon, and achieving gender equality in the workplace.”

The obvious legislave vehicle for this reform is the Employment Bill that the Government included in the Queen’s Speech in December 2019. Prior to the onset of the COVID19 pandemic, this was set to be introduced to Parliament in 2020, but is now not expected unl 2021. Such a meframe affords ample opportunity for the Government to develop and consult on the details of our proposed 6+6+6 model.

However, as much as we need to scrap the Shared Parental Leave scheme and replace it with a simpler, more equitable statutory system based on individual, non- transferable rights to leave and pay, such reform is unlikely to deliver more equal parenng unless it is accompanied by robust acon to increase the supply of good quality, affordable childcare, a shi to a ‘flexible by default’ approach to job design and recruitment, and a major effort by polical and business leaders to drive a change in parenng culture. UNICEF recommends that, as a minimum, naonal family-friendly policies should:

▪ Provide statutory, naonwide paid parental leave of at least six months for parents.

▪ Enable all children to access high quality, age-appropriate and affordable childcare, irrespecve of family circumstances.

▪ Ensure there is no gap between the end of parental leave and the start of affordable childcare so that children can connue their development without interrupon.

▪ Ensure that mothers can breaseed both before and aer they return to work by providing lengthy-enough paid parental leave, guaranteed breaks at work and safe and appropriate locaons to breaseed and pump.

▪ Collect more and beer data on all aspects of family-friendly policies so that programmes and policies can be monitored, and countries compared.

Published October 2020, by Maternity Acon maternityacon.org.uk Contact: richarddunstan@maternityacon.org.uk

An equal endeavour? October 2020