Recommendation 3

HM Government Acknowledged

The government recognises the importance of equality in parenting, and this is reflected in the terms of reference for the parental leave and pay review. The Employment Rights Bill will make Paternity Leave and Unpaid Parental Leave day one rights, bringing them in line with Maternity Leave and Adoption Leave. This will bring an extra 32,000 fathers or partners into scope of Paternity Leave and an extra 1.5 million parents into scope of Unpaid Parental Leave. We are also removing the requirement that Paternity Leave and Pay must be taken before Shared Parental Leave and Pay so that parents have more flexibility in how they take their leave. It is standard across the parental pay system that statutory pay is conditional on an average earnings test and not available from day one of employment. The only exception is Maternity Allowance, which is a benefit designed to support health and recovery following childbirth for those who don’t qualify for Maternity Pay. Making statutory Paternity Pay or Maternity Pay a “day one” right would raise significant practical and financial challenges as employers would have no earnings data for newly hired employees and may struggle to administer payments fairly and efficiently. We also want to avoid introducing complexity or unintended burdens on business – especially small employers. However, the government recognises that the current system needs to change. The recently launched parental leave and pay review provides an opportunity to consider all parental leave and pay entitlements holistically, rather than introducing piecemeal changes that increase complexities and burdens for employers and employees. Through the review we will reset our approach to parental leave and pay, whilst giving due consideration to balancing costs and benefits to families, businesses and the Exchequer. The government will be engaging with a range of stakeholders, including employers, as part of the review. Recommendations 4 and 5 – Increasing the length and flexibility of Paternity Leave There is very strong evidence from around the world and from UK employers’ gender equal schemes that providing fathers and other parents with an extended period of sustainably paid statutory leave typically transforms take up. Extending paternity leave therefore has the potential to shift the dial on gendered allocation of parental responsibilities. Addressing the stark gendered disparity in our statutory leave periods should therefore be considered fundamental to fixing our broken system and a key priority of the Government’s forthcoming review. The Government’s review must consider a feasible plan to incrementally increase the period of paid paternity leave, drawing on lessons from recent reform programmes overseas, for example in Spain. As an initial medium term objective, it should set out a pathway to increasing paid statutory paternity leave to six weeks over the course of this Parliament. It should aim to ensure maximum flexibility in the number of blocks the leave can be taken in during the first year after a baby’s birth or adoption. The Government must also assess the likely benefits of making a portion of the extended period of paternity leave compulsory, to drive culture change and normalise fathers taking a greater role in caring responsibilities. The government recognises that more can be done to support working families and facilitate the best start in life for babies and young children. We know that the system needs to reflect the required flexibility for the realities of modern work and childcare needs, which is why through the Employment Rights Bill we are enabling Paternity Leave to be taken after Shared Parental Leave. The flexibility this gives rise to will enable employees to move towards better paid employment without fear of losing their right to protected time away to be with their families. We have also launched the parental leave and pay review to ensure parental leave and pay best supports working families, and this will include looking at Paternity Leave and Pay. The government recognises the committee’s recommendation to increase the length of paid Paternity Leave; however, it is important that these kinds of proposals are considered through the parental leave review so that we are able to look at the system as a whole. The review will look at how we can promote economic growth through the parental leave system by enabling more parents to stay in work and advance their careers after starting a family, with a particular focus on improving both women’s labour market outcomes, tacking gender pay gap, and supporting parents’ ability to make balanced childcare choices that work for their family. By allowing the review to conclude and inform our approach on Paternity Leave we will be able to look at the system overall to ensure it best delivers for working families.