Examination of Witnesses (Questions 20
WEDNESDAY 2 MAY 2001
20. Can we turn now to maternity and parental
leave? What impact do you think the introduction of parental leave
has had on the workforce? How widely has it been taken up, would
(Ms Carberry) Very little impact so far. The take-up
as far as we can gauge has been very low. We think that is for
one reason: that is because it is unpaid. It is very difficult
for people to take chunks of time off work if they do not get
any income replacement.
21. My next question was going to be, how could
the current arrangements be improved and you have just told me
"pay". Is that the only way it can be improved?
(Ms Carberry) No.
(Ms Holland) I just wanted to talk about flexibility.
The opportunity to take parental leave on a flexible basis will
help and in particular changing the current default scheme which
has the one most punitive thing that does not apply anywhere else
in the workplace, that if you take a day's instead of a week's
leave you lose your entitlement to a week. It is very unfair and
anyone that has tried to take half a day and then discovered they
lose a week's entitlement has been absolutely shocked, the people
that we have represented. There is a father who wanted to take
time off around the time of the birth of his child and he wanted
to take the full three months. He could afford it but he was not
allowed to because the default scheme that the employer was using
meant he could only take a month. There are things like that which,
even in the current scheme, with the lack of flexibility and choice,
are restricting even those who are prepared to take it unpaid.
22. Presumably all these points have been made
to Government, have they?
(Ms Holland) Yes.
23. To what extent are employers aware of and
implementing the changes that the Government has already made
to regulations regarding maternity leave, maternity allowance
and parental leave?
(Ms Holland) Certainly where there is a union they
are aware of them and they are proposing policies, or we are working
with them on that. I think there have been some positive examples
where the fact that there has been new rights has led to improvements
beyond what is in the legislation, which is very helpful, and
sometimes the employer has made a big effort to introduce improvements
before the rights have come in to show that they are not just
doing it because the legislation is there but because they want
to show they are doing it out of a genuine commitment to the people
at work, so we have got some positive examples of that. I think
it is true to say there are many people who are not aware and
who are not acting unless somebody asks for the new rights, and
I have come across cases still where there is not even a basic
understanding that when you become pregnant it does not mean you
are resigning. You do still find cases where we have to enlighten
the employer that people do have rights to carry on working when
they have a baby.
(Ms Anderson) The DTI research showed that one of
the key problem areas was the new right to time off for dependants.
A lot of employers do not know about that. There was an Employment
Tribunal case recently where a mother working as a secretary for
some firm was sacked and she successfully claimed unfair dismissal
on the basis of the right, and the employers clearly had no clue
that there was this new right. Obviously we have done as much
promotion of that as we can but I think there is quite a lot of
further work that needs to be done.
(Mr Gates) I think the whole question of promotional
work is quite important. Diana made the point about unionised
workplaces. I think where businesses are part of employers' associations
and federations there is more awareness of it. I think there is
scope for the Government to promote, even if they do it sectorally,
partnership work between trade unions and employers' associations
to disseminate not only the legislation but best practice within
their sectors based on the experiences of companies where there
is an awareness and it is operating effectively and efficiently.
24. That would deal with what the Government
can do where trade unions are operating, but what can the Government
do where trade unions are not operating? Presumably the Government
ought to do more, you would feel, to publicise these changes.
What more should they be doing?
(Ms Anderson) They had a major promotional campaign
in relation to the national minimum wage. I know there have been
recent criticisms about how much money they are spending on advertising
but nevertheless I think that was thought to be a very effective
campaign and something along those lines could be done.
(Ms Holland) There is also the possibility of linking
up with the Department of Health with people who attend parentcraft
classes and antenatal classes and there are very useful information
leaflets that have been produced but in my experience they are
not very widely known about or being used either by employers
or people at work. That would be one way of putting them into
the hands of those people that are providing the support, whether
it is health visitors, midwives or others who could give that
information at that time.
(Mr Gates) In terms of the non-unionised workplace,
it is a partnership arrangement between unions and employers'
associations on a sectoral basis. Quite often that does encompass
businesses that may not be formally unionised but they are part
of the association and therefore information will spill down when
they participate in seminars and information gathering.
25. The TUC has proposed that earnings related
maternity pay should be extended to 90 per cent for 26 weeks.
You tell us I think that that will cost £1.7 billion annually.
Would you say that the benefits that would accrue justify such
(Ms Anderson) Obviously that does sound like a very
substantial amount of money and it is, but bear in mind that we
already spend quite a lot of money on statutory maternity pay,
so it is a maximum extra of, say, a billion. Bear in mind also
that not enough analysis has been done on what is recouped so
in terms of extra tax and national insurance that would be got
back from mothers and also from employers, that would be quite
a significant factor as well as other savings, keeping women in
employment and that type of issue. We really do feel that it is
justified because, although we very much welcome what the Government
has done in terms of increases to maternity pay, we did some research
and looked particularly at low and medium paid women. They said
to us that even increasing the flat rate by the amount that it
has been increased would give them severe difficulties in taking
it because the flat rate still involved a big drop, even for not
very well paid women, and if you look at the average pay of manual
working women, for example, it is still a big drop. We did think
that earnings related pay was justified in the circumstances,
particularly given the Government's pledge to eradicate child
poverty and the emphasis that they have given on child welfare.
Yes, it is a lot of money but we do feel it is justified.
(Mr Gates) To add to that on the whole question of
maternity leave, quite often businesses do not seek to take cover
for the period of time. They use extended hours, they use other
people to cover the jobs. In terms of attracting people back they
could not continue that cover long term. If you look at this money
as an investment in UK PLC, because this is right across the country,
what you are talking about is, is investment in training new people,
is investment in equipping employees with the knowledge of the
business and knowledge of the business's customers, worth the
cost of investment? It is almost the old adage: is training a
cost or is training an investment? Is the maintenance of your
key employees an investment in your business long term as opposed
to a short term period of 26 weeks, and that is a justification
for yes, it is a lot of money maybe but it is an investment spread
across the whole of UK PLC that will recoup itself in improved
performance and productivity.
26. I can agree with the sentiments of all that.
I am a little surprised that you have not done some research here
yourselves on costing the benefits or quantifying the benefits,
and if you are so confident that it is justified then presumably
you can produce evidential statements based on research which
can prove your confidence.
(Ms Holland) I think the most important thing in terms
of actual cost is the lack of need to replace people, and obviously
that will vary, but the costs of advertising, training and replacing
people and, depending on the job that they do and the level of
training and experience required, that will vary. I know that
Boots has done some research on its own workplace and identified
savings of millions from the family friendly policies that they
have introduced. In the bus industry we have done quite a lot
of work around retention of employees which has not just been
family friendly policies; it has been sexual harassment policies
as well, but they had identified that they were training women
in this area and they were not staying. Those two issues were
the two reasons why they were not. They saw a very important benefit
to themselves from that. The cost of training is obviously high
but after that the people were not staying and so they wanted
to make sure that they did and they felt that it was more than
27. So bits of evidence exist to justify in
those particular cases. Do you know of any research across the
board which has been embarked upon either by Government or by
academic institutions or even sponsored by the TUC or by one of
(Ms Carberry) The Working Parents Green Paper
cited research about women's propensity to come back to work which
was linked to the level of earnings replacement that was available
to them. It did show that those on higher salaries and professional
women were more likely to come back into the workplace. If our
objective is to retain women's attachment to the workplace there
is an argument that the need is greatest at lower levels of income.
We argue however that any drop in income from your normal earnings
to a low flat rate is a financial shock and is something that
a woman, in the few months following the birth, should not have
to deal with and that is why we argue that everybody should be
able to have a fair length of time when they get full earnings
replacement. If the argument is that the cost is too great, there
is another argument that we would put forward, which is that you
can look at tapering arrangements as a second best and you can
have an upper salary cut-off point beyond which you would not
get full earnings replacement, or you could give a lower proportion
of earnings replacement for some of the maternity leave below
the 90 per cent. That would not be our ideal but that would be
an alternative way of approaching it if the overall cost to the
public purse were deemed to be excessive.
28. My assumption is that most of the people
who currently get something closer to full earnings replacement
as in well above the statutory minimum are women who are already
in managerial and professional positions where they will get that
as part of their terms of service as a bonus. Is that a correct
assumption and does that therefore throw a question in that if
you were to go for the universal right some of the winners would
be the employers who are currently paying over the odds who would
be able to get it from the Treasury rather than taking the cost
(Ms Carberry) There would be some displacement. We
have not quantified it. I do not know whether the Government research
has. Nevertheless there is also an argument about justice and
equity and those women having the same rights as other women have
and not having those rights lessened just because they work in
(Ms Anderson) There are also important demographic
considerations and this is maybe not talked about as much as it
could be. The recent population projections did show that the
proportion of people above pensionable age by 2011 was going to
increase at twice the rate of the numbers of people of working
age. That was even given assumptions that the birth rate would
not fall as much as it might do and that there would be a net
inflow of migrants to this country. Even given those assumptions
there was a really serious issue by 2011 about the working age
population in relation to the pensionable age population and it
is clear that these kinds of decisions around maternity rights
issues have an impact on whether women are going to have children,
and frankly we need children. For the Government there is that
wider consideration too.
29. Presumably there is quite an important consideration
for skills shortages amongst public sector workers in particular
in areas like inner and outer London where there would be substantial
economic benefit for women returning there. Do you know whether
anyone is quantifying that at the moment or focusing upon that?
(Ms Carberry) There is the general question about
skill shortages. I am not aware of anybody particularly looking
at skill shortages in relation to women geographically.
30. It just seems that everyone is talking about
the problems of getting people to work in the public sector in
London vis-a-vis the great cost of living in London, and I would
have thought that Government would be focusing on ways of introducing
flexible working arrangements to encourage women in particular
but also others to take up those opportunities.
(Ms Holland) There is certainly work going on within
the Health Service in shortage areas. There is evidence that they
are looking at a whole range of different family friendly practices
and particularly working time choice. I know a number of examples
of self-managed rosters where particularly nursing staff, when
they want to work can do so, and they sort it out amongst themselves.
There are positive examples like that. I am part of the joint
employer/union group that is looking at work-life balance in local
government and we are producing jointly guidance and best practice
examples to go throughout local authorities in looking at that.
There is that kind of work going on but I would not classify it
as research in the sense that you mean. It is more trying to promote
best practice and also pulling together all the examples of good
practice that are going on and quite imaginative and innovative
things that are going on, and identifying those that are being
supported as being of benefit on a joint basis.
Chairman: Thank you. I rather fear that we have
only scratched the surface of this particular subject but I think
we have come to the end of our time, if you will forgive us. Thank
you very much indeed for that fascinating session. We are now
going on to colleagues from the CBI and you are very welcome to
stay if you want to; I think some of them have listened to your