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

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 Directive 2010/18/EU”

We have recent UK Supreme Court case law in DCA v O’Brien[3] taking into account CJEU jurisprudence on an “employment relationship”.  The Supreme Court said there the “distinction as to whether a person is in an employment relationship is between those who work for themselves and those who work for others, regardless of the nature of the contract under which they are employed” [40].  So where EU law offers protection to those in an employment relationship, a far wider range of workers than merely employees are protected, be they office holders such as MPs or judges or those in the gig- 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 and parental 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) approximately 58% 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 Recital also encourages Member States to provide for a payment or an allowance for paternity 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 at 90% of average weekly earnings. Figures obtained from HMRC by law firm EMW last year showed only around a third as many men taking paternity leave as women taking maternity leave.[8] The low level of SPP is likely to be a contributory factor to this differential. The maximum level of weekly SPP is equivalent to less than £8,000 per annum. Many cannot afford to take leave at the rate of SPP at a time of life when there is a sudden increased demand on household expenses. If the UK government heeded the EU’s encouragement to match maternity pay, and provided for 90% pay for fathers in the initial period, as for SMP, the take up amongst new fathers would be much higher. We note the WEC has already urged this upon Government, subject to a cap for high earners.[9]

Theresa May announced this week that she wants to extend paternity leave as part of her legacy plans. She proposes that fathers should be entitled to 12 weeks’ leave, the first 4 of which would be paid at 90% salary and the remainder at current SPP rates. There has been some initial resistance to the proposal; the business secretary has raised concerns about the impact that the policy could have on businesses, particularly those with many high earners. Whitehall estimates suggest that the policy could cost £550 million. A consultation document due to be published shortly will reportedly suggest that those earning more than £100,000 should not benefit from the extended paternity leave.

The above developments together with the broader range of protection as described above would make a really significant impact on uptake of paternity leave.

Parental leave

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

Again, on first reading, UK law appears already to be more generous (save for the limited scope to employees only): an employee who has been continuously employed for a year (a qualifying period reflected in the Directive) with responsibility for a child is permitted to 18 week’s leave in respect of any individual child until the child’s 18th birthday.[10] None of this leave is transferrable, so there is arguably an even greater “use it 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 of parents use this right because it is unpaid and there is little awareness of it.[11] The Government has recognised that pay inequalities between mothers and fathers mean there is financial pressure on men not to take unpaid time off work and that this “reinforces the obligations of mothers to take the greater amount of parental leave.” They are supposedly already looking at this issue.[12]

Significantly, the Directive provides that the two months of non-transferrable leave per parent should be paid, such payment to be determined by the Member State and “set in such a way as 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 of their right to parental leave only if it is sufficiently well remunerated, with a view to allowing for a decent living standard.”[14]

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

Carers’ leave

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

The new Directive emphasises how an ageing population along with pressure on public expenditure in some Member States, means that the need for informal care is likely to increase. The latest figures published by Carers UK show that almost 5 million people already juggle paid work and unpaid care – around 15% of the UK population. Their research reveals that 2.6 million have quit their job to care for a loved one who is older, disabled or seriously ill, with nearly half a million (468,000) leaving their job in the last two years alone. The cost to the economy of carers being forced to give up work to care is estimated at £5.3 billion in lost tax revenues and earnings and additional benefit payments.[15]

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

Flexible working arrangements

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

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

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

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

UK campaigners have long been trying to increase the uptake of flexible working. For a wider scope of workers to benefit from such arrangements would surely go some way to modify attitudinal changes, although it remains vital that more jobs be advertised as flexible as the default option 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

For inquiries regarding parental rights please contact Rachel or Chesca on rc@cloisters.com 020 7827 4054 and cl@cloisters.com 020 7827 4057 or contact our clerks on clerks@cloisters.com 020 7827 4000.


[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.pdf paras 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.pdf para 101

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

[13] Art 8(1)

[14] Recital para 31

[15] https://www.carersuk.org/news-and-campaigns/campaigns/right-to-paid-care-leave

[16] Recital para 32

[17] Recital para 12

[18] Art 9(1)

[19] S.47 Employment Act 2002, inserting ss. 47E & 80F-H Employment Rights Act 1996

[20] Art 9(2)

[21] Equality and Human Rights Commission, Working Better: Meeting the changing needs of families, workers and employers in the 21st century, 30 March 2009: https://webarchive.nationalarchives.gov.uk/20141013170704/http:/www.equalityhumanrights.com/sites/default/files/documents/working_better_final_pdf_250309.pdf

[22] [2019] EWCA Civ 900