Shared Parental Leave - a City Perspective

The recent announcement that men will be given the chance to take up to 50 weeks’ Newborn Baby Peeps over Father's Shoulderpaternity leave provoked a strong reaction across the business community. Small business owners in particular fear compliance will be a cost they can ill afford without it having a detrimental effect on their performance. But top employment law specialist Arpita Dutt, of leading City law firm BDBF, argues that working life in the male dominated square mile will remain largely unchanged.

MANY in the business world reacted with a mixture of bemusement and incredulity at the recent government announcement on shared parental leave.

Under the new legislation which comes into effect in April 2015, male employees could be entitled to up to 50 weeks’ paternity leave.

However, in the City there has been a more muted and measured response. Many insiders believe that, despite the square mile being male-dominated, the City will remain largely unaffected by the new law.

So, the question is, why?

According to the new legislation, parents will be able to split the entitlement to time off work after the birth of their child.

For the first time, businesses will have to offer statutory pay to male staff and be required by statute to keep positions open for the first 26 weeks after childbirth.

Once the mother’s two week recovery period is complete, she and her partner can split their leave equally.

Either one will be entitled to 90% of their usual pay until six weeks after birth, followed by a 33 week period of statutory pay, which at present is £136.78 per week. The remainder of the year is unpaid.

I certainly don’t envisage male City workers becoming a rare sight overnight as they race to take advantage of the new laws.

Indeed, it is hard to imagine large numbers of the City’s predominantly male working population suddenly deserting their posts to rush off on paternity leave for the best part of a year.

Traditionally, due to the larger salaries they command, men who work in the City have been the main breadwinners.

So for many families the financial loss of extended paternity leave would be too painful a burden to bear.

As a result, it’s not hard to see why panic has failed to set in amongst City banks and finance houses after the announcement of extended paternity leave. Quite simply, most of their employees would be highly unlikely to swap six figure salaries and a bonus for £137 per week paternity pay.

City bonuses, although in the large part discretionary, sometimes have a requirement that employees need to be in ‘active service’ in order to obtain them, and if awarded to be an incentive for future work and loyalty, these too could be placed in jeopardy.

So for many whose lifestyles are in part dependant on a significant bonus , taking extended paternity leave would make little or no financial sense.

In an environment where a macho culture still dominates, extended paternity leave could lead to subtle or even overt forms of career discrimination.

In recent research of over 50 City institutions, many male workers said they knew of female colleagues who had suffered difficulties at work or some form of discrimination following lengthy maternity leave. My experience of acting for women in financial services is that the type of discrimination includes the job being shared out amongst colleagues, clients being taken away and a return to a more junior role. Their experience is also of a resistance to flexible or part-time working and perceptions that they are not wholly focussed on the job anymore

It follows then that some male City workers may be reluctant to park their career for six months and learn new home-based multi-tasking skills if they feel certain that it may provoke a strong judgemental backlash amongst colleagues both senior and junior.

So as much as they would perhaps like to, many of my City clients see no reason to restrict their income and jeopardise their lifestyle and career by taking paternity leave.

Despite this, some elements of the workforce will find the new extended rights attractive.

I believe it will be popular where the mother is the higher earner and the father is happy to stay at home and look after the baby, which is an increasing trend This won’t just apply to the City but to all areas of the workforce.

It makes financial sense, if that is the main driver for couples. However, I’m fully aware that for some parents of a new baby, the financial rewards or losses are not a prime consideration and experiencing quality time in the early years is difficult to place a value on.

But even for those couples, they may revert to tradition because ultimately financial stability could work out to be the most pragmatic option.

For most women, having a baby is life-changing emotionally and physically. It can take a long time to get used to and the need to rush back to work so their partner can share bringing up a baby can be an unrealistic aim.

It is clear that the new legislation is going to make a big difference to those new fathers desperate to be hands-on from the beginning and then perhaps it may bring with it a cultural acceptance and a move away from gender stereotyped roles. But predictions of it heralding widespread disaster for small businesses are, in my view, overstated.

Meanwhile, in the City, I believe there will be little appetite for extended paternity leave as high earning male employees stand to lose too much financially in return for a ‘nappy changing’ career break.

You can find out more about Arpita Dutt on http://www.bdbf.co.uk/the-team/arpita-dutt/

Arpitadutt@bdbf.co.uk

Tel 020 3586 3325