UK: Further Family Flexibility

Thousands of working parents stand to benefit from new rights after the Work and Families Act 2006 received Royal Assent on 21 June 2006. Whilst the greater choice to families in how they balance work and caring responsibilities will undoubtedly increase the burden on employers, the new rights should also benefit employers by helping them plan ahead and manage maternity and paternity leave with greater certainty.

The new Work and Families Act 2006 will come into force in April 2007, building on the significant measures this Government has introduced for working families since 1997. Major changes will be made to maternity, paternity and adoption leave and pay, as well as an extension of the right to flexible working. The key new rights for employees are as follows:

• The current continuous service requirement for women to be able to take additional maternity leave will be removed, so that all women will have the right to both six months ordinary leave and six months additional maternity leave, regardless of their length of service
• An increase from six to nine months statutory maternity pay ("SMP"), with the objective to increase this to a year's paid leave by the end of the current Parliament
• In addition to the current entitlement to two weeks paid paternity leave, a new right for fathers to an additional period of paternity leave of up to six months, which will be paid if the mother returns to work before exhausting her full entitlement to SMP
• The introduction of "Keeping in Touch" days so that, where employees and employers agree, women on maternity leave can return to work for a few days, without losing the right to maternity leave or SMP
• The right to request flexible working will be extended to those who care for adults (for example, those who are elderly or sick).

Under the legislation, businesses will benefit from:

• Measures to help better manage the administration of statutory maternity pay, paternity pay and adoption pay
• An increase from 28 days notice to 8 weeks notice for women returning to work before the end of their maternity leave. This will allow employers to plan more effectively for the return to work
• Clarity that employers can make reasonable contact with their employees on maternity leave to help them with planning and easing the mother's return to work.

Employers should review any company family related policies and ensure that they are updated to reflect the changes when they come into force next year.

The first steps towards the changes set out in the Work and Families Act 2006 have been included in recently published draft Regulations.

The Regulations will come into force on 1 October 2006 and will apply to employees whose expected week of childbirth, or expected date of adoption, is on or after 1 April 2007.

The key changes are as follows:

• The right to 12 months maternity leave comprising both six months ordinary maternity leave and six months additional maternity leave. The distinction between the two different kinds of leave is to be retained so as to continue to provide for different rights during the leave and on returning to work after ordinary and additional maternity leave
• The introduction of "Keeping in Touch" days, entitling an employee on maternity (or adoption) leave to work for up to 10 days after the first two weeks of maternity leave
• The right for employers to make reasonable contact with employees during their maternity leave
• The removal of the exemption for small employers which previously allowed small employers of less than five employees to be exempt from a finding of automatic unfair dismissal where a post was not held open for a woman on maternity leave
• An increase from 28 days to 8 weeks notice for women wishing to return to work early from their maternity leave.

The Fixed-Term Employees (Prevention of Less Favourable Treatment) Regulations 2002 came into force on 1 October 2002. Regulation 8 provides that if an employee has been continuously employed on 2 or more fixed-term contracts for a period of four years or more they shall be deemed to be a permanent employee, unless the employer can show that the continued use of fixed-term contracts can be objectively justified.

The Regulations provide that any continuous employment prior to 10 July 2002 should be disregarded, making 10 July 2006 the first day on which a fixed-term employee could have acquired permanent status.

In practical terms, since the non-renewal of a fixed-term contract is as much a dismissal for unfair dismissal purposes as a dismissal of a permanent employee, this will not change the situation on dismissal of an employee who becomes permanent.

However, one step that employers should take by 10 August 2006 is to provide qualifying employees with a statement of changes made to their terms and conditions of employment. In particular, information should be provided as to the length of their notice period, given that the fixed term contract will now not expire. Failure to do so could result in employees being liable for awards of between 2 and 4 weeks pay.

Another aspect of the new right is that employees who consider themselves to have become permanent employees should make a written request for confirmation from their employer. The employer is obliged to provide a written response within 21 days, which either confirms the permanent status or gives reasons as to why the contract remains on a fixed-term basis. If an employer contends that the use of a fixed-term contract is justified, employees may, if they dispute the justification, apply to an employment tribunal for a declaration that their contract has become permanent.