A new regime entitling employees to paid time off for childcare in the first year after a child’s birth will come into effect for employees whose baby is due on or after 5 April 2015. The intention behind the new scheme is to allow families more choice over how they look after their children in the first year. Employees should be aware of the following in relation to the draft Statutory Shared Parental Pay (General) Regulations 2014 (draft SPP regulations):

• Under the new scheme, employees will have the same rights to maternity leave and ordinary paternity leave that they currently have, but the system of additional paternity leave will be abolished;

• This means that parents will be able to apply to take time off together or separately, in one continuous period or discontinuously;

• In place of this, provided the eligibility criteria are met, mothers will be able to convert up to 50 weeks of their maternity leave and 37 weeks of their statutory maternity pay (SMP) into shared parental pay (SPP), and share it with their partner; SPP will be paid at the SMP flat rate;

• Legally speaking, an important issue for employers is whether their approach to payment for SPL could give rise to discrimination claims. If employers offer enhanced maternity pay, but not enhanced SPP fathers, who can be at home at the same time as a mother on maternity leave, may claim that this is unlawful discrimination.

• Conversely, if employers offer enhances pay for both maternity leave and SPL, will mothers be entitled to take paid maternity leave and then enhanced SPP or can the two be set off against each other?

• Employers should be acting now to prepare for the new scheme. At the very least, they will need to be ready to administer what is a very complicated scheme. Employers should consider who will be responsible for administering the new scheme (usually HR) as quickly as employees are already raising questions about their new rights.

• Employers will also need to consider their approach to SPL on a policy level. Some employers will see the introduction of SPL as an opportunity to promote themselves as a family-friendly organisation and to support the government’s objectives of facilitating a new approach to childcare.

• In reality we wonder whether few fathers will take up SPL unless employers offer enhanced pay during SPL, take steps to publicise the right and establish a culture where fathers are encouraged to make use of their rights.
For further information, please contact Koichiro Nakada – Head of Japan Business Group (koichiro.nakada@lewissilkin.com) and Yoko Nakada - Senior Associate, Deputy Head of Japan Business Group (yoko.nakada@lewissilkin.com).
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