Making parental leave too expensive?

In April, the Equality and Human Rights Commission (EHRC) published "Working Better" a report calling for significant changes to the statutory maternity, paternity and parental rights regime. 


The report states that the UK's current parental leave policies are the worst in Europe.

The EHRC proposes that family friendly rights are improved in the following way:-

• The removal of any length of service requirement for entitlement to maternity pay or paternity rights;

• SMP to be payable for 26 weeks at 90% of salary;

• A new 52 week period of parental leave with 4 months to be taken by the mother and 4 months by the father and the remainder to be taken by either parent and this to be in addition to existing maternity and paternity leave;

• The pay for this new parental leave to be either 26 weeks pay at 90% of salary or 52 weeks at 50% of salary.

The current statutory maternity, paternity and parental leave provisions in the UK provide that:-

• Women are entitled to 1 year's maternity leave, regardless of service, which comprises 6 months' ordinary maternity leave (OML) and 6 months' additional maternity leave (AML). They are entitled to return to the same or similar job after this period, depending on how much leave is taken;

• In addition, those with 26 weeks' continuous employment prior to the fourteenth week before the expected week of childbirth (EWC) are entitled to up to 39 weeks' statutory maternity pay (SMP). SMP is payable for the first 6 weeks at 90% of salary and for the remaining 33 weeks at the prescribed rate of either £123.06 per week or 90% of salary, whichever is lower;

• Fathers (or partners) with 26 weeks' continuous employment prior to the fourteenth week before the expected week of childbirth (EWC) are entitled to 2 weeks paternity leave and statutory paternity pay (SPP) which is either £123.06 per week or 90% of salary, whichever is lower;

• Parents with a year's continuous service are entitled to take 13 weeks unpaid leave before each child's fifth birthday. These rights are supplemented by the flexible working rights for employees who care for children and have recently been extended to those employees who care for adult dependents.

The current parental policies cost the Government £2.07 billion a year and the EHRC estimates that the proposed changes to the regime would cost a further £5.26 billion a year. 


Disregarding the tax consequences, the effect on small to medium businesses of employees taking lengthy periods of leave is a further argument against extending parental leave rights, particularly in the current economic climate.