On 5 October 2015, George Osborne announced that the government planned to extend shared parental leave to working grandparents so that new parents can share maternity pay and leave with their child's working grandparents.

Details at this stage are limited but we do expect legislation by 2018 and a consultation at the beginning of next year which will give more insight into the detail.

What do you need to do now?

Detailed planning and drafting of HR processes and documentation cannot be done until the government reveals the detail, but in the meantime HR can get ahead of the game by taking some preparatory steps:

  • Review the current take-up of shared parental leave (SPL) and assess the effectiveness of your current processes and procedures
  • Consider the composition of your workforce to roughly assess the numbers of employees who might be able to assert their right to take shared parental leave as grandparents (bearing in mind that grandparents might have numerous grandchildren)
  • Review your current arrangements for paying employees taking shared parental leave, to make sure that they can be justified if necessary. Clyde & Co's survey of 80 organisations, conducted between December 2014 and January 2015 found that 76% of respondents already offered enhanced maternity pay. Of those, 35% had decided to offer enhanced parental pay, predominantly at the same level as the enhanced maternity pay. We take the view that it is good for workplace relations to pay employees taking SPL at the same rate as employees taking maternity leave. It also avoids any question of indirect discrimination. For more information on this click here.

What is the potential impact of extending SPL to grandparents?

7 million* grandparents in the UK provide regular childcare, valued at £7.3billion**.

SPL has been available for parents of babies expected to be born or children placed for adoption from 5 April 2015. In outline, SPL allows qualifying parents the option to share 50 weeks of leave after their baby is born or their child is adopted. To qualify, each parent must have 26 weeks' employment at the 15th week before the week of the child's expected birth or placement. The leave can be taken consecutively or concurrently. Qualifying parents can also claim shared parental pay (ShPP), which is currently the lower of £139.58 per week or 90% of earnings.

The right to take shared parental leave was introduced with some fanfare by the Government, but it is still too early to know what impact it is having. From our experience, there has not been an overwhelming uptake although there is some evidence that this is slowly changing as employees become more aware of their rights and as attitudes towards fathers taking leave from work slowly shift.

If SPL is extended to include grandparents, there are a number of possible implications.

The risks

The potential for employees to be absent from the workplace will be greater than ever before. Some employees could have a number of grandchildren and, bearing in mind SPL can be taken on 8 weeks' notice, the potential for long periods of leave taken at short notice is worrying. It seems sensible that the Government might place limitations on the amount of leave a grandparent could take, such as limiting how much leave can be taken per year or per child. These issues will no doubt be explored in the consultation next year.

Another potential area for concern would be where you fail to extend enhanced maternity benefits to grandparents utilising grandparents leave. This could raise risks of age and indirect sex discrimination.

The benefits

  • Offering enhanced leave could improve workplace relations. It was for this reason that some years ago, Asda chose to introduce a limited form of grandparents' leave for its workers, allowing employees to take week off work on the birth of a grandchild
  • Grandparent leave could provide a route to retain skilled older workers within the workforce for longer, as they will no longer have to choose between remaining in work and caring for grandchildren
  • Single parents or parents whose partner may not qualify for SPL or ShPP will be able to return to the workplace earlier than they would have done otherwise, which in turn, may benefit employers.

A storm in a teacup?

Extending shared parental leave to grandparents sounds an interesting proposition in response to childcare dilemmas faced by working parents, there are a number of reasons why the outcome might not be as impactful as some of the press coverage suggests.

First, as mothers are increasingly having children later in life, grandparents are more likely to be older and have already retired, meaning that they would not be entitled to take SPL. However, as typical retirement ages increase the impact of this could be offset.

Secondly, grandparents may be reluctant to swap their jobs for childcare duties on statutory pay, at a time when they may be seeking to maximise their earnings to enhance their pensions. Therefore, the likely uptake will (like shared parental leave) be closely linked to the extent to which pay is enhanced by employers.

Key dates:

Early 2016 - Government will issue a consultation paper
2018 - Legal provisions will come into force

We will update you next year when the government publishes more details about its proposals.

* figures from TUC
** figures from joint study conducted by Age UK in 2013

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.