Spotlight on Government Proposals
Spotlight on Government proposals affecting the labour market, post general election 2005
Statutory Maternity Pay
Maternity pay and childcare are high on the agenda in the debate surrounding policies to facilitate combining work and family life. At present women are entitled to either 26 weeks maternity leave or a year depending on their length of service. The first six weeks of this carries with it an entitlement of 90% of average basic earnings. The following 20 weeks is paid at the Statutory Maternity Pay rate of £106.00 a week. Women who were already working with their current employer when they became pregnant and have sufficient length of service are entitled to a further 26 weeks usually unpaid. Fathers are entitled to two weeks paternity leave paid at £106.00 a week.
The Government proposes to extend the duration of the paid maternity leave to nine months by 2007 and to a full year by the end of this parliament. The Government is also debating whether women should be allowed to transfer a proportion of their maternity leave to fathers. It has not been decided how this should be implemented and after what period of time the transfer should be allowed; after the first two weeks, after three months or after six months.
The Equal Opportunities Commission argues that this approach does not allow parental choice and ‘shared parental leave’ should be offered after the first six months, where parents have equal rights to and can choose how it is divided up. The issue here is that fathers should be given specific rights rather than leave being transferred, this would also ensure that in partnerships where the mother is not working the father still has specific rights to extended paternity leave rather than the current two weeks. The Equal Opportunities Commission also recommends that the two weeks paternity leave should be extended to four at 90% of earnings up to a fixed amount.
The issue of the amount of maternity or paternity pay received during an extended period of leave is paramount as 78% of women are not taking their full entitlement to maternity leave because they cannot afford to do so. This statistic comes from a survey published in the Guardian (March 10th 2005) carried out by the Union of Shop, Distributive and Allied Workers (Usdaw). Research has shown that the rate of paternity leave at £106 would also stop father’s from taking up an extended right to paternity leave. “…less than half (46 per cent) saying they would take paternity leave at the current rate, however, at full pay, the proportion of fathers saying that they would take up paternity leave increases to 87 per cent.” (Rebecca Clake (CIPD), Observer 6th March 2005).
Comment
Discussion about future policies in relation to maternity and paternity leave must go hand in hand with policies, which aim to secure access to affordable childcare. Childcare is a priority for women when making the transition from maternity leave to work. Without the infrastructure of good quality affordable childcare women may have no choice but to stay at home. Giving men specific rights to paternity leave would be a step forward for equal opportunities but men also need the reassurance that good quality childcare is available when they return to work.
Ref: Guardian: 06/03/05, 10/03/05, 24/05/05
Incapacity Benefit
The Government aims to take one million people off Incapacity Benefit and into employment. Part of their strategy includes a rehaul of Incapacity Benefit which at present is claimed by 2.7 million people. Currently there are three different rates to Incapacity Benefit, a claimant is eligible for the first rate of £55.90 for 28 weeks, the second rate of £66.15 for 52 weeks and the third rate of £74.15 after week 52. This has been considered to reward claimants for longer periods on the benefit and the focus of the rehaul is to encourage a work centred approach. Planned reforms will not apply to existing claimants and will not be fully introduced until 2008. However, the first steps to reform have been taken in the Pathways to Work pilot areas which include mandatory personal advisers for existing IB claimants who have been on the benefit for up to three years as well as a £20 a week job preparation payment.
To replace Incapacity Benefit three new benefits are to be introduced Rehabilitation Support Allowance and Disability and Sickness Allowance and a Holding Benefit. Prior to being assessed through the personal capability assessment (PCA), claimants will receive a ‘holding benefit’ paid at the jobseekers allowance (JSA) rate of £55 a week. The PCA should take place within twelve weeks after which time, those with ‘more manageable conditions’ will receive Rehabilitation Support Allowance, others with ‘the most severe health conditions or impairments’ will receive Disability and Sickness Allowance. Those who are considered able to return to work with the right support who are claiming the Rehabilitation Support Allowance will have to participate in work-focused interviews and activity to ‘prepare for a return to work’ such as vocational training and basic skills courses. Although the basic rate of the Rehabilitation Support Allowance is at the JSA level, if claimants satisfy the new conditions it will be topped up to a level slightly higher than the present long term IB rate of £74 a week. The work-focused interviews and return to work activity will also be offered to the claimants receiving Disability and Sickness Allowance but on a non-compulsory basis and they will receive approximately £80 a week.
The criteria the PCA is going to use and how it is going to be decided which claimants receive Rehabilitation Support Allowance and which receive Disability and Sickness Allowance is still to be addressed. A further issue is whether claimants leaving sickness benefits to start work will be able to sustain their employment. Links back into the benefit system need to be set up to ensure that claimants feel secure in taking up the support available and making that transition into the labour market. It has been proposed that there be a two year ‘linking period’ for claimants who have been in receipt of the higher rate of IB during which they would automatically requalify without having to reapply.
Comment
A key issue is whether quotas will be set on the number of people claiming Rehabilitation Support Allowance and Disability and Sickness Allowance. For if quotas are set it will force the issue of who has ‘more manageable conditions’ and will compulsorily have to complete the work focussed interviews and activities to ‘prepare for a return to work’. This is high on the agenda for disability campaigners who do not want quotas on the number of people claiming each benefit set. It also needs to be ensured that claimants of either benefit who make the transition into the labour market are provided with information about their rights both at work and in relation to the new benefits.
Ref: Working Brief 162, March 2005; Welfare Rights Bulletin, 185, April 2005
Guardian: 27/01/05, 02/02/05, 03/02/05, 17/05/05, 25/05/05
Working Time Regulations
There are four groups who are most affected by the Working Time Regulations (WTR): those who work long hours, night workers, those without full rest breaks and those with less than four week’s paid annual leave. Two out of these four groups have been in the headlines recently. MEPs have voted for a more family friendly policy on long hours and the government has pledged to secure 20 days holiday entitlement in addition to bank holidays.
At present Britain has an opt-out from the European Union’s 48-hour maximum working week. MEPs voted by a large majority, 378 to 262, with 15 abstentions, in favour of phasing out the opt-out from the working time directive, won by the conservative government thirteen years ago, within three years. A recent survey carried out by the DTI found that thirteen per cent of respondents ‘usually’ worked more than 48 hours a week which leads us to expect that about 4 million Britons will be affected. Working long hours has consequences for employees’ health and family life and phasing out the opt-out would alleviate employer pressure on employees to work longer hours. However, although fifty-eight percent of long hours workers said they would prefer working no longer than 48 hours a week, the DTI report found that only 12 per cent would want their hours limited if this meant a loss of earnings. If the opt-out is phased out it is likely that employers will be able to demand long hours of work during busy periods or seasonal activity as the maximum working week would be averaged over the year rather than the current 17 weeks. Unions are in favour of this compromise which will ensure workers do not work long hours over a long period of time and that busy periods of seasonal activity can be covered.
Employees with less than four weeks’ paid annual leave were more likely to be part-time workers earning below £9,000, according to the DTI report. These workers made up 13 per cent of the DTI’s research sample. Of those working without full annual leave, 67 per cent would prefer to have more paid holiday but only a third of this 67 per cent were happy to agree to this if it meant earning less money. Many employees who are working with less than their annual leave entitlement are doing so because bank holidays are included as part of their twenty days leave. This means that rather than having twenty days annual leave plus bank holidays they are only getting 12 days annual leave, this effects more than 2 million workers. The government wish to see all full-time workers receiving 28 days paid holiday a year including bank holidays
Comment
Policies concerning Working Time Regulations need to balance individual’s choice in determining their working hours and the protection of employees from the abuse of current legislation. Although a high proportion of long hours workers are in managerial positions many such as night workers, those with security occupations and drivers are low paid and do not want to work less hours if it incurs a loss in pay. However, health and safety at work as well as balancing work and family life must not be confused with issues concerning low pay.
Ref: Guardian; 28/03/05,10/05/05,11/05/05, 12/05/05, 19/05/05,
Employment Relations Research Series No 31, DTI
