Shared Parental Leave

Family-friendly leave entitlements can become complex. 

Shared Parental Leave came into force at the end of 2014 and provides parents with more flexibility in regards to how they take leave during the first year of their child’s life/adoption and will allow them to be on leave at the same time for more than 2 weeks. However, the new entitlements are not straightforward and in this article we look at what this means for employers.

What is the current entitlement?

Workers in the UK are entitled to 28 days (5.6 weeks) a year paid holiday, if they work full time for five days a week. Part-time workers are entitled to the same level of holiday pro rata. Self-employed workers are not entitled to any annual leave. If you leave your job with holiday leave outstanding, your employer should pay this back to you. The UK Government states that employers should use basic pay to calculate how much a worker earns whilst taking annual leave. This was defined in the Working Time Regulations Act of 1998 and means that commission and overtime are not included when calculating holiday pay.

The is an issue however, there is discrepancy between the UK and the European Working Time Directive, as the latter doesn’t specify how holiday pay should be calculated. Up until now, the UK Government has interpreted the directive as saying that holiday pay should be an employee’s basic rate of pay, therefore not including regular overtime. 

How do the new entitlements affect employers?

This will mean new policies, new forms, more administration and less certainty when members of staff are expecting a child. Employers who currently offer enhanced maternity schemes should consider treating Shared Parental Leave in the same way. The position is currently unclear as to whether it would be sex discrimination not to do so and this has lead to some employers are already considering doing away with enhanced schemes.

Will it affect the current maternity, paternity and adoption leave provisions?

For eligible parents, they will need “opt-in” so the current maternity and adoption leave provisions will apply unless the parents choose to take Shared Parental Leave. The 2 weeks ordinary paternity leave will remain available to fathers/partners, but they will no longer have the option to take additional paternity leave. This is unlikely to upset many as less than 1% of those who could have taken it, actually took it.

Who decides how the leave is allocated?

It will be up to the parents to choose how they divide the leave which includes up to 50 weeks of Shared Parental Leave and 37 weeks of Shared Parental Pay.

The existing regulation which requires the mother to still have 2 weeks of compulsory maternity will still apply.

Who is entitled to Shared Parental Leave?

The scheme is not only available to families where both parents are employed but also to those where one parent is employed and the other is classed as “economically active”, which only requires a low level of earnings.

How does shared parental leave work?

To take shared parental leave, the mother would need to provide a “curtailment notice” giving her employer 8 weeks’ notice of the end of her maternity leave, she would also have to provide a “notice of entitlement” to prove that she is entitled to Shared Parental Leave along with an indication of when she would like to take her share of the Shared Parental Leave.

The father/partner must also provide notice of entitlement and intention to take Shared Parental Leave on his/her employer.

It is important that these notices contain several details along with declarations from each parent confirming, among many other points that they agree to the amount of leave that the other parent is taking.

Both parents would then provide their employer with details of the other parent’s employer and also standard evidence of entitlement such as a birth certificate or adoption papers.

When the parents have confirmed their plans to take their share of the entitlement, they have to provide a period of leave notice to their employer, with at least 8 weeks’ notice before the start of the first period of leave.

How can leave be taken?

Leave can be taken in a single block or in multiple blocks of complete weeks. If one block of leave has been requested, then the employer must agree. If multiple periods of leave have been requested then the employer will have two weeks to either agree, propose an alternative or refuse the request. If the request for multiple periods of leave is refused then the parent has to be allowed to take their leave in a single block.



If you would like to know more about shared parental leave, please don’t hesitate to contact one of the team here at Tamar HR.

How will the new Holiday Pay Ruling affect me?

What were the cases about?

Earlier this year, this discrepancy between British and EU law was highlighted when a British Gas worker took his case to the European Court of Justice. His normal pay was made up of basic pay and sales commission, yet he was only receiving his basic pay whilst on holiday. 

Additionally, employees from the companies Bear Scotland, Amec and Hertel all appeared before the UK employment appeal tribunal, questioning their holiday payments too. They called for their holiday pay to include overtime and commission – which is in line with their average earnings.

What was the decision?

The tribunal ruled in the employees’ favour, deciding that article 7 of the Working Time Directive meant that in these cases, overtime was part of the workers' “normal” earnings and therefore should be included when calculating holiday pay.

The ruling has set a precedent for how employers’ holiday pay should now be calculated, and with millions of workers in the UK regularly working paid overtime, it’s a change that could have a massive effect.

What does this mean?

The ruling will not result in an immediate payment of years of missed pay. The Employment Appeal Tribunal has put limits on backdated claims, if there has been a break of more than three months between successive underpayments – this could mean employees can only make a claim if they have taken a holiday in the previous three months.

There is still the possibility of the companies involved appealing the decision. The cases could then be referred to the EU courts or Court of Appeal for clarification on how the European law should now be interpreted.

What should employers do?

Holiday pay must now reflect the worker’s actual normal earnings rather than just basic salary. If a worker’s earnings vary, the holiday pay should be based on an average of their actual earnings calculated over a 12-week period.

If you would like to know more about holiday pay please don’t hesitate to contact one of the team here at Tamar HR.

Zero Hours Contracts

The General Election  bought the issue of zero hours contracts being used by employers to the political arena. From all this, it has been difficult to separate fact from fiction, so here are the most common questions asked about zero hours contracts:

What are they?

When an employee is engaged on a zero hours basis, the employer does not have to offer any work to the worker and the worker does not have to accept it. For example, Andrea works as a waitress for an events company, when there is work they call her to see if she is available and whether she wants to work at certain events.

Employees with zero hours contracts are still employees and still have rights to annual leave and national minimum wage, protection from discrimination, and as individuals work, they accrue 'continuous service' which counts towards employment rights such as redundancy pay.

Different industries tend to lend themselves to the use of zero hours contracts, for example in hospitality where work is often seasonal with periods of work appearing in peaks and troughs.

What is the issue with zero hours contracts?

The issue with zero hours contracts is that as there is no obligation to offer work, which means that a worker could be working one week and not the next, this creates uncertainty as an employee cannot depend on a regular income. Exclusivity clauses have also been a cause of concern as these limit an employee working for another employer whilst potentially not offering any hours themselves, therefore restricting an individual’s ability to earn a wage. Many individuals enjoy the flexibility these contracts offer, for example students that have differing periods of availability throughout the week.

Are employees aware they are on a zero hours contract?

An employee on a zero hours contract may take regular hours but then complain when an employer does not offer them work when they want it. A clear zero hours contract making clear the nature of the working relationship and obligations for both employer and employee will be very helpful.  A worker can be regarded as an 'employee' if there is a regular pattern of work and the parties come to rely on each other.

Employers should ensure that they provide a clear statement in the employment contract that explains what the zero contract is and the circumstances where an employee may not receive work, as this will clear any issues that may arise from the outset as the employee will be clear about what they are entering into.

Can an employer prevent a worker from working elsewhere?

As part of the Small Business, Enterprise and Employment Act 2015, exclusivity clauses were prohibited from 26^th May 2015 and this measure means that staff who are contracted on a zero hours basis can work for more than one business without being dismissed or disciplined.

This looks to be a fair compromise on the arguments presented as many saw an outright on ban on zero hours contracts as an unfair decision on the many individuals that enjoy the flexibility these contracts offer. 

Conclusion

Zero hours contracts have their place and provide flexibility to both the employer and worker. However, in the spirit of trying to reduce disputes, having clear documentation and communication with employees on zero hours contracts is essential.   

If you would like to know more about zero hours contracts, please don’t hesitate to contact one of the team here at Tamar HR.

Auto-enrolment Update

You will now be aware that the law on workplace pensions has changed. Every employer in the UK with at least one member of staff now has a duty to ensure employees meeting a certain criteria are enrolled into a workplace pension scheme. In addition both employers and employees are obligated to make contributions into the pension scheme.

Auto-enrolment has been rolling out across the UK since 2012 and millions of employees are now up and running in a pension scheme. Between now and May 2017 the focus will be on businesses with a number of employees between 1 and 50, with each individual business having a unique ‘staging date’ depending on the number of people employed.

Developing and implementing a plan for Auto-enrolment can take between 6 - 18 months to complete effectively, so if you do not already have provisions in place, the Team at Tamar HR will be happy to provide you with the details of how you can comply with the new legislation. It’s also worth mentioning that auto-enrolment is not optional for employers and there is a legal requirement to comply, so don’t get caught out by leaving it too late. There is plenty of help available out there and we would be happy to point you in the right direction.

Staging Date

In case you are unaware of your ‘staging date’, the information below will help you to find this out. The best way to think of a ‘staging date’ is the date at which the law will apply to your business.

To find your staging date, simply visit the Pension Regulator website at www.thepensionregulator.gov.uk and click on the ‘Find out your staging date’ section. You will be presented with a box like the one pictured below and all you need to do is enter your PAYE reference to be provided with your specific date.

Once you know your staging date you can begin to think about your preparations for auto-enrolment and how to comply with your duties as an employer.

If you would like to know more about auto enrolment please don’t hesitate to contact one of the team here at Tamar HR.