Will the new radical Work-Life Balance Directive help UK parents and carers?

Blog

25 Jun

Introduction

On 13 June 2019, the Council of the European Union formally adopted a Directive on work-life balance for parents and carers.

The Directive will enter into force on the 20th day following the publication in the Official Journal of the EU.

Member States will then have three years to adopt laws, regulations and administrative provisions necessary to comply with the Directive.

We don’t as yet know if EU law will be applicable in the UK by 2022. It may be that the UK government never has to adopt the provisions we analyse below. That depends on the outcome of Brexit and the nature and length of any transitional period.

The reasons why we suggest adopting the provisions would be a positive step for the UK are not because of any position on Brexit per se, but because to do so would have a significant impact upon the current low take-up of both paternity and parental leave by fathers.

Such an impact would arise since this new Work-Life Balance Directive offers a broader scope of protection than anything which has previously existed. If this Directive becomes binding in the UK, it will enable many thousands of additional workers to gain access to paternity and parental leave, if they can bring themselves within the EU concept of an “employment relationship.”

Furthermore the Directive aims to support the area of “equality between men and women with regard to labour market opportunities and treatment at work,”[1]contributing “to the achievement of gender equality by promoting the participation of women in the labour market, the equal sharing of caring responsibilities between men and women, and the closing of the gender gaps in earnings and pay.”[2]These aims firmly align with many manifesto claims of the major UK political parties as well existing recommendations from MPs and the EHRC.

Scope

Both recital 17 and article 2 of the Directive provide that all those who work under an employment relationship are within scope of protection, including “all workers who have employment contracts or other employment relationships, including contracts relating to the employment or the employment relationships of part-time workers, fixed-term contract workers or persons with a contract of employment or employment relationship with a temporary agency, as previously provided for by Directive2010/18/EU”

We have recent UK Supreme Courtcase law in DCA v O’Brien[3]taking into account CJEU jurisprudence on an “employment relationship”. The Supreme Court said there the “distinctionas to whether a person is in an employment relationship is between those whowork for themselves and those who work for others, regardless of the nature ofthe contract under which they are employed” [40]. So where EU law offers protection to those inan employment relationship, a far wider range of workers than merely employeesare protected, be they office holders such as MPs or judges or those in thegig- economy frequently denied the status of employee.

Currently in UK law only employees i.e. those working under a contract of employment are able to access maternity leave or pay, paternity leave or pay, parental leave or pay including adoption leave and only employees have the right to request to work flexibly. So it is clear that this Directive truly shakes up the status quo.

Looking to greater detail, how does the Directive impact on existing UK provisions about paternity andparental leave?

Paternity leave

The Directive provides for at least 10 working days of paternity leave around the birth of the child, to be compensated at least at the level of sick pay.[4]So far, no better than the current UK provision, where the 2 week ordinary paternity leave entitlement is compensated at the statutory paternity pay rate (currently£148.68 per week or 90% of average weekly pay whichever is lower) approximately58% higher than the statutory sick pay (SSP) rate (currently £94.25 per week).

Where UK fathers (or equivalent second carers) would benefit under the Directive is that the leave becomes a day one right (like maternity leave),[5]and the pay subject to a qualifying period of no more than 6 months immediately prior to the expected date of the birth of the child.[6]Presently both the rights to leave and pay are subject to the father having been continuously employed for at least 26 weeks prior to the 14th week before the expected week of childbirth. According to a TUC analysis, this precluded 44,000 fathers from the entitlements in 2016. This qualifying period is a matter the Parliamentary Women and Equalities Committee (WEC) have already urged the Government to reconsider.[7]The adoption of the new Directive would enhance the momentum towards change in this area.

Paragraph 30 of the Directive’s Recitalalso encourages Member States to provide for a payment or an allowance forpaternity leave that is equal to that provided for statutory maternity pay(SMP) - this would benefit fathers because the first 6 weeks of SMP are paid at90% of average weekly earnings. Figures obtained from HMRC by law firm EMW lastyear showed only around a third as many men taking paternity leave as womentaking maternity leave.[8]The low level of SPP is likely to be a contributory factor to thisdifferential. The maximum level of weekly SPP is equivalent to less than £8,000per annum. Many cannot afford to take leave at the rate of SPP at a time oflife when there is a sudden increased demand on household expenses. If the UKgovernment heeded the EU’s encouragement to match maternity pay, and providedfor 90% pay for fathers in the initial period, as for SMP, the take up amongstnew fathers would be much higher. We note the WEC has already urged this uponGovernment, subject to a cap for high earners.[9]

Theresa May announced this weekthat she wants to extend paternity leave as part of her legacy plans. Sheproposes that fathers should be entitled to 12 weeks’ leave, the first 4 ofwhich would be paid at 90% salary and the remainder at current SPP rates. Therehas been some initial resistance to the proposal; the business secretary hasraised concerns about the impact that the policy could have on businesses,particularly those with many high earners. Whitehall estimates suggest that thepolicy could cost £550 million. A consultation document due to be publishedshortly will reportedly suggest that those earning more than £100,000 shouldnot benefit from the extended paternity leave.

The above developments togetherwith the broader range of protection as described above would make a reallysignificant impact on uptake of paternity leave.

Parental leave

The Directive stipulates thateach parent will have an individual right to parental leave of four months tobe taken before the child reaches a specified age, up to the age of 8, twomonths of which are non-transferrable between parents.

Again, on first reading, UK lawappears already to be more generous (save for the limited scope to employeesonly): an employee who has been continuously employed for a year (a qualifyingperiod reflected in the Directive) with responsibility for a child is permittedto 18 week’s leave in respect of any individual child until the child’s 18thbirthday.[10]None of this leave is transferrable, so there is arguably an even greater “useit or lose it” incentive on fathers than envisaged by the Directive.

However, under current UK law,parental leave is unpaid. The TUC has told the WEC that only a minority ofparents use this right because it is unpaid and there is little awareness ofit.[11]The Government has recognised that pay inequalities between mothers and fathersmean there is financial pressure on men not to take unpaid time off work andthat this “reinforces the obligations of mothers to take the greater amount ofparental leave.” They are supposedly already looking at this issue.[12]

Significantly, the Directiveprovides that the two months of non-transferrable leave per parent should bepaid, such payment to be determined by the Member State and “set in such a wayas to facilitate the take-up of parental leave by both parents,”[13]taking into account that “first earners in a family are able to make use oftheir right to parental leave only if it is sufficiently well remunerated, witha view to allowing for a decent living standard.”[14]

Fathers and non-birth partnerswould be eligible for this kind of parental leave in their own right, unlikeShared Parental Leave (SPL), where a mother has to curtail part of hermaternity leave in order for her partner to be able to take SPL of his or herown. Furthermore the current rate ofShared Parental Pay (ShPP) is the same as SMP, except that during the first 6weeks SMP is paid at 90% of whatever the mother has earned (with no maximum).

Carers’ leave

A new concept under both EU andUK law is an allowance of 5 working days per year of carers’ leave.

The new Directive emphasises how anageing population along with pressure on public expenditure in some MemberStates, means that the need for informal care is likely to increase. The latestfigures published by Carers UK show that almost 5 million people already jugglepaid work and unpaid care – around 15% of the UK population. Their researchreveals that 2.6 million have quit their job to care for a loved one who isolder, disabled or seriously ill, with nearly half a million (468,000) leavingtheir job in the last two years alone. The cost to the economy of carers beingforced to give up work to care is estimated at £5.3 billion in lost taxrevenues and earnings and additional benefit payments.[15]

There is no requirement under theDirective that carers’ leave should be paid. However, Member States areencouraged to introduce such a payment or allowance in order to guaranteeeffective take-up, especially by men.[16]If it is unpaid, for the reasons set out in respect of unpaid parental leaveabove, we think it is likely to result in more women than men doing unpaid carework. It is important that unpaid carers’ leave is not perceived by theGovernment as a solution to the current care crisis. As noted in the Directive,“the equal uptake of family-related leavebetween men and women also depends on other appropriate measures, such as theprovision of accessible and affordable childcare and long-term care services,which are crucial for the purpose of allowing parents, and other persons withcaring responsibilities to enter, remain in, or return to the labour market.”[17]

Flexible working arrangements

The Directive provides that allworking parents with children up to at least 8 years old and carers have theright to request flexible working arrangements.[18]

UK law goes further than theDirective in some respects, since it applies to all employees, not only workingparents. Since 2014, all employees who have worked for the same employer for atleast 26 weeks have had the legal right to request flexible working: see ss80F-80I, Employment Rights Act 1996 (ERA). This right has been graduallyextended since it was originally introduced in 2003 and applied only to parentsof children under the age of six and disabled children up to the age of 17.[19]

Section 80F(8) ERA provides thisright to an employee who has been continuously employed for a period of atleast 26 weeks. The Directive endorsesthe 26-week qualifying period and leaves the ultimate decision as to whether togrant the request with the employer, so long as they have considered andresponded within a reasonable timescale, and provided reasons for any refusals.[20]The employer’s resources and operational capacity to offer such arrangementsremain key considerations. However a farwider range of workers would benefit from these arrangements if the newDirective comes into force in the UK.

Another new element of protectionintroduced by this Directive is a formal“right to return” to the original working pattern at the end of an agreedperiod where the flexible working arrangements are limited in duration, and aright to request to return to the original pattern earlier in the event of achange of circumstances. In 2009, the EHRC had recommend introducing a formalright to request a return to full-time work after a previous change in workinghours, to be negotiated subject to business needs, which was not taken up bythe Government at the time.[21]

UK campaigners have long beentrying to increase the uptake of flexible working. For a wider scope of workersto benefit from such arrangements would surely go some way to modifyattitudinal changes, although it remains vital that more jobs be advertised as flexible as the defaultoption for a real cultural shift to occur.

The future

The Directive clearly does not have any immediate direct legal effect in UK law, but it has worth as a lobbying document and may be persuasive in strategic litigation. Working fathers in Ali and Hextall have just lost their claims for parity of pay for parental leave in the Court of Appeal.[22] By the time their cases reach the Supreme Court, the UK might have even voluntarily adopted the Directive’s provisions. That is, if there is Parliamentary time available for anything other than Brexit….

By Rachel Crasnow QC & Chesca Lord, Cloisters Chambers

Forinquiries regarding parental rights please contact Rachel or Chesca on rc@cloisters.com 020 7827 4054 and cl@cloisters.com 020 7827 4057 or contactour clerks on clerks@cloisters.com 020 78274000.

[1]Recital para 1

[2]Recital para 4

[3] [2013] ICR 499

[4]Art 4(1) & 8(2)

[5]Art 4(2)

[6]Art 8(2)

[7] https://publications.parliament.uk/pa/cm201719/cmselect/cmwomeq/358/358.pdfparas 41-45

[8] https://www.personneltoday.com/hr/fathers-taking-paternity-leave-fall-for-the-first-time-in-five-years/

[9]Ibid, para 50

[10]MAPLE 1999 Regs 13 to 15

[11] https://publications.parliament.uk/pa/cm201719/cmselect/cmwomeq/358/358.pdfpara 101

[12] https://publications.parliament.uk/pa/cm201719/cmselect/cmwomeq/358/358.pdfpara 103