UK: Employment Changes from May 2003 - Paternal Rights and Flexible Working

All change for April 2003

New regulations are being introduced via the Employment Act 2002 which come into force in April 2003. The significant changes are to parental rights and flexible working requests.

On these two subjects, given that new and prospective mothers and fathers are all likely to enquire as to their rights, one aim of all employers is to get their maternity/paternity/flexible working policies rewritten and issued.

The Government has postponed the introduction of the new statutory disciplinary and grievance procedures, but they are also covered in this Bulletin.

Large parts of the Employment Act 2002 ("the Act") and regulations made under it will come into force in April 2003. As well as fine-tuning existing rights, the Act will seek to introduce a new right to paternity leave, create a minimum standard for Employers’ Disciplinary and Grievance Procedures and, perhaps most significantly, seek to give statutory bite to the public’s desire for greater flexible working arrangements. What follows is a brief discussion of the more interesting aspects of the Act.

The Act is split into four parts. The first part covers paternity and maternity leave and pay. The second part covers Employment Tribunal reform, including costs and practice directions issued by Tribunals. The third part covers dispute resolution and concerns compromise agreements, disciplinary and grievance procedures. The fourth part covers miscellaneous issues, including equal pay questionnaires, fixed-term contracts and work-focused interviews for partners of benefit claimants.

The Employment Act is in many ways simply an enabling Act, in which numerous sections refer to the future "regulations" that will set out the actual provisions to be followed. The following regulations have now been published:

• The Maternity and Parental Leave (Amendment) Regulations 2002: these came into force on 24 November 2002 (SI 2002/ 2789);
• The Statutory Paternity Pay and Statutory Adoption Pay (Weekly Rates) Regulations 2002: these were made on 11 November and came into force on 8 December 2002 (2002/ 2818);
• The Paternity and Adoption Leave Regulations 2002 (2002/2788): these were made on 11 November and came into force on 8 December 2002;
• The Flexible Working (Procedural Requirements) Regulations 2002: these were published on 9 January 2003 and came into force on 6 April 2003 (SI 2002/3207);
• The Flexible Working (Eligibility, Complaints and Remedies) Regulations 2002: these were published on 9 January 2003 and came into force on 6 April 2003 (SI 2002/3236).

The intention is to simplify the current maternity rules. These simplified rules will be harmonised where possible with paternity and adoption leave rules.

• From 6 April 2003 there will be a statutory right to paid paternity leave.
• New fathers will be entitled to either one week or two consecutive weeks’ paid paternity leave within 56 days of birth for the purpose of caring for a child or supporting the child’s mother.
• One of the two adoptive parents (the other being eligible for the more extensive adoption leave detailed below) will also be entitled to either one week or two consecutive weeks’ "paternity" leave.
• The employee must have 26 weeks of continuous service with the same employer at the Qualifying Week (by the 15th week before the expected week of childbirth ("the EWC")) in order to be eligible. If the child is born prematurely the employee will still qualify providing the expected week was the 15th week. The EWC is defined as the week beginning midnight between Saturday and Sunday in which it is expected that the child will be born.
• The right to paternity leave will be available to employees other than the biological father of the child. Entitlement is to be decided on the basis of the employee’s relationship with the child and its mother, to ensure that paternity leave is available to those who are parenting the child. The employee must have, or expect to have, responsibility for the upbringing of the child and must be either the biological father or be married to (or be the partner of) the child’s mother.
• Notification must be by the 15th week before the EWC or no more than seven days after the date on which the adopter is notified of having been matched with a child for the purposes of adoption.
• If the EWC, or the date of notification of being matched with the child, is before 6 April 2003, the employee seeking paternity leave may still take leave but he must choose a predetermined date at least 28 days after giving the required notice.

• From 6 April 2003, Statutory Paternity Pay will be the lower of £100 per week or 90% of an average week’s earnings.

• Ordinary Adoption Leave and Additional Adoption Leave will reflect Maternity Leave rights. Employees with 26 weeks’ continuous service at the Qualifying Week who are adopting a child will be entitled to Ordinary Adoption Leave of 26 weeks (paid at a flat rate) and Additional (unpaid) Adoption Leave of a further 26 weeks, giving a total potential leave period of one year.

• Statutory Adoption Pay will be the lower of £100 or 90% of the employee’s average weekly earnings.

• Ordinary Maternity Leave ("OML") (for all employees, regardless of length of service) is to be increased from the current 18 weeks’ leave to 26 weeks’ leave.
• As now, it will be possible to commence OML at any time from the beginning of the 11th week before the EWC.
• Notification must be given before the end of the 15th week before the EWC and employers are now obliged to notify employees of the date on which their maternity leave will end. Should the employer fail to give this notification, he/she will be unable to prevent the employee from returning early from maternity leave and the employee is protected from any detriment or dismissal if she fails to return on the due date.
• An employee may change the date on which she intends to commence her OML provided that the employer is given 28 days’ notice.
• An employee’s OML is now triggered automatically if she is absent from work after the beginning of the fourth week before the EWC rather than the sixth week as provided by the 1999 Regulations.
• Additional Maternity Leave will apply for employees with 26 weeks’ continuous service as at the Qualifying Week and is for a further 26 weeks (unpaid) following the end of the initial OML period, giving a total potential leave period of one year.

• The first six weeks of Statutory Maternity Pay ("SMP") will be paid at 90% of the employee’s average weekly earnings; the following 20 weeks being paid at the lower of £100 or 90% of the employee’s average weekly earnings per week. A £75 floor will be applied to any woman whose Maternity Pay Period spans 6 April 2003.
• Any woman leaving her employment for whatever reason after the 15th week before the EWC will be entitled to SMP.

Clauses 29 to 41 of the Act are designed to give greater significance to disciplinary and grievance procedures and are therefore likely to be of considerable significance to employers when they come into force in April 2004.

A new contractual term will be implied into every contract of employment to incorporate the minimum standards for the formal grievance and disciplinary procedures set out in Section 29 and Schedule 2. There will be no exception for small employers. This is a significant change; as at present grievance and disciplinary procedures can be non-contractual. At present such procedures are often stated to be non-contractual, in the hope that an employer will not be vulnerable to a breach of contract claim where it fails to follow its own procedure.

Failure to follow the minimum standard procedures will be a breach of contract, so could give rise to constructive dismissal claim. It could also render unenforceable any post-termination covenants. However, the minimum standards set by the Act are less stringent than those in the ACAS Code of Practice for disciplinary and grievance procedures.

Tribunals are to take into account any failure by employers or employees to follow the minimum standards set out in the Act. Tribunals will have the power to increase or reduce any compensatory award by up to 50% if an employer (or an employee) does not use the statutory grievance or disciplinary procedure.

Regulations will extend the time limits for bringing claims to Employment Tribunals in order to facilitate proper operation of grievance and disciplinary procedures.

Standard procedure:

Under the standard procedure there are three steps to be undertaken:

• The employer must send a written statement to the employee detailing the alleged conduct that has led to the need for disciplinary action. The statement must invite the employee to attend a meeting to discuss the matter.
• Except for suspension, the meeting must take place before any disciplinary action is taken. In addition, the meeting should not take place unless the employer has completed step 1 and the employee has had sufficient time to consider the information in the statement and formulate a response. After the meeting the employer should inform the employee of its decision and notify him or her of their right of appeal.
• An employee who wishes to appeal must inform the employer of this fact. In this case a further meeting will take place. The appeal meeting need not take place before the dismissal or disciplinary action takes effect. After the appeal meeting, the employer will inform the employee of its final decision.

Standard procedure:

Under the standard procedure there are three steps to be undertaken:

• The employee must send a written statement to the employer detailing the grievance.
• The employer must invite the employee to a meeting to discuss the grievance. In addition the meeting should not take place unless the employee has completed step 1 and the employer has had sufficient time to consider the information in the statement and formulate a response. After the meeting the employer should inform the employee of its decision and notify him or her of their right of appeal.
• An employee who wishes to appeal must inform the employer of this fact. In this case a further meeting will take place. After the appeal meeting the employer will inform the employee of its final decision.

If an employee is still unhappy with the outcome he/ she may take it to an Employment Tribunal. An employee must comply with the duty to set out the grievance in writing before making a complaint to a Tribunal and at least 28 days must have passed before the Tribunal will accept the complaint.

As of April 6 2003, a new Equal Pay Questionnaire is available, designed to assist employees in obtaining pay-related information from their employer. The intention is that use of the Questionnaire procedure will make Employment Tribunal proceedings simpler, since the matters in dispute will have been identified in advance.

The Questionnaire follows the general format of the Sex Discrimination Act Questionnaire; however, it imposes an eight week time limit within which employers must respond.

The Act provides powers for introducing regulations in relation to fixed-term work and employees. These powers will introduce the EC Directive on fixedterm contracts and will also make it unlawful to pay fixed-term employees less than others. Pay for this purpose will include pay and pensions.

• The weekly rate of Maternity Allowance for women who have paid sufficient National Insurance contributions will be brought in line with Statutory Maternity Pay.
• The Act provides for regulations to be introduced under which claimants of certain Social Security benefits who are not married but have a partner will lose benefits if their partner refuses without good cause to attend an interview at which partners will be encouraged to take further steps to gain employment.

The Government has recently approved and published the final versions of the Flexible Working (Procedural Requirements) Regulations 2002 and the Flexible Working (Eligibility, Complaints and Remedies) Regulations 2002. From 6 April 2003 employers will be under a duty to consider applications for flexible working from employees who are parents of young or disabled children.

The eligibility requirements are set out in the Flexible Working (Eligibility, Complaints and Remedies) Regulations and provide that:

• The employee must be the mother, father, adopter, guardian or foster parent of the child (or married to such person) and have parental responsibility for a child aged under 6 years or for a disabled child aged under 18 years to be eligible to make the application.
• The employee must have been continuously employed for at least 26 weeks before making the application.
• The employee will have to submit a written application (which must be dated) for flexible working, to their employer stating whether any previous application has been made.
• The written application should set out the desired working pattern and include an explanation of how the employer could accommodate the request.

The procedure is governed by the Flexible Working (Procedural Requirements) Regulations 2002. They provide that:

• On receiving an application the employer must, within 28 days, either hold a meeting to discuss the application or inform the employee in writing that the application has been approved, referring specifically to the variation and the date on which it is to take effect.
• If the employer fails to hold the meeting, or fails to notify the employee of his decision, a penalty may be imposed of up to eight weeks’ pay (subject to a maximum per week – currently £260).
• If a meeting is held, the employer must inform the employee of the decision in writing within 14 days of the meeting and, if the application is approved, then the contract variation and date on which it is to take effect must be referred to.
• If the employer has decided to refuse the application, then the notice must specify the ground for refusal, why the ground is applicable, the appeal procedure and the date.
• The potential grounds for refusal are:

• The employee has the right to appeal within 14 days of the date of the notice of the decision. The appeal should be in writing, clearly dated and set out the grounds of appeal.
• The employer should, within 14 days of the date of the notice of appeal, either hold a meeting to discuss the appeal or inform the employee in writing that the appeal has been upheld, referring specifically to the variation and the date on which it is to take effect.
• Following the appeal, a dated, written notice of the decision should be sent to the employee within 14 days specifying the contract variation and date or grounds for refusal of the appeal.
• Time limits can be extended by mutual agreement.
• Employees have a right to be accompanied at meetings by ‘a worker employed by the same employer’. If the chosen colleague is not available to attend the meeting then the employer must agree to postpone the meeting. Breach of the provision results in a compensation payment of up to two weeks’ pay (subject to the maximum of £260 per week).
• The employee who has exercised the right to be accompanied to a meeting and the accompanying worker have the right not to be subjected to a detriment because the employee has sought to exercise this right.

The Employment Tribunal will not have the power to order the implementation of a flexible working arrangement but may order that the application be reconsidered or award compensation.

There are no enforcement mechanisms where the employer has unreasonably refused an application to work flexibly, or where the reason given is not one within one of the prescribed reasons. The Secretary of State will, however, have a broad power to impose penalties in this regard. It remains to be seen how this power will be exercised and whether employers will merely pay lip service to the new provisions by complying with procedural requirements. The problem about lip service is that the new right cannot be seen in isolation. It exists in parallel with sex discrimination law.