The parental leave system has come under a considerable amount of criticism in recent years. It has been called outdated, inequitable, and unsupportive of modern family dynamics. Criticisms include low rates of statutory pay and the leave system reinforcing traditional gender roles. This contributes to the gender pay gap and the gender participation gap, costing, it is suggested, the UK in the region of £5bn per annum in GDP.
Review of parental leave and pay
The UK Government's promised review of parental leave rights in Great Britain was launched on 1 July, including its terms of reference and a call for evidence, which is due to run until 25 August. The review itself is expected to run for a period of 18 months and includes all current and upcoming parental leave and pay entitlements. The review will be completed with a set of findings and a roadmap, including next steps for taking forward any potential reforms to implementation.
Aims and objectives
The review is intended to be evidence-based. Aims include expansion of the existing evidence base and understanding of the current system, enabling assessment of what is and is not currently working for families and employers. Options and principles for a system of parental leave and pay that better supports the UK Government's objectives can then be considered. This is specifically stated to include identifying options with low or no cost to business and the Exchequer.
The objectives against which the current system and the case for change will be considered are maternal health; economic growth through labour market participation; facilitating the best start in life for babies and ensuring sufficient resources and time away from work for new and expectant parents; and supporting parents to make balanced childcare choices.
The review will also focus on what the UK Government describes as three "cross-cutting" considerations. These are:
- fairness and equality between parents in a family, different types of parents, and different employment statuses;
- balancing of costs and benefits to both businesses and the Exchequer; and
- societal considerations, for example, shifting social and gender norms, including around paternal childcare.
What does this mean for the future?
With the Employment Rights Bill, employers are already looking at an unprecedented level of change to employment rights in the workplace over the next couple of years. While the wholesale review of the parental leave and pay system is unlikely to result in a wholesale revision of it, employers do need to expect that some changes will be made. The areas where that is most likely will be simplification of shared parental leave, which has a lower than 10% uptake, and steps to increase fathers' participation in childcare. That may include, for example, extending paid paternity leave and matching the 90% of earnings for the first six weeks that maternity and adoption leave currently provide. If, or when, any such changes are made, and whether they can be implemented in advance of the next general election, remains to be seen.
