A Year's Maternity Leave Is Too Long

Nichola Pease, Deputy Chairman of JO Hambro capital management, has re-ignited the heated debate around maternity leave, by telling a Treasury Committee that the current 12-month maternity leave allowance is too generous.

“We have got to be realistic and make sure the protection around women doesn’t end up backfiring.”

“A year’s maternity leave is too long. What I worry is that legislation and protection turn this into a nightmare. We’ve got to be realistic and make sure the protection, which has a very good motivation, doesn’t end up backfiring.”

Critics have suggested the law is open to abuse with some women in senior positions demanding promotions despite taking years off to have a number of children, sometimes with very little time between the births.

A woman employed by a top UK company took a year’s maternity leave, returned to work and asked for a promotion. She threatened that she didn’t want to be ruled out just because she had a small child, which could have been discriminatory. She was given the promotion and soon after, announced that she was pregnant again and would be taking another year off. The company could do nothing as she was within her legal rights.

The increasing cost to small business

Particularly in small companies, the new rights on parental leave are causing serious problems. The cost of taking on temporary staff through an agency while a woman is on maternity leave is often double the rate normally paid per hour. When the mother returns, she can ask to work flexibly in what was previously a full-time post.

The UK has approximately 1.3 million agency workers on temporary assignments in the public and private sectors, very often providing cover for maternity leave.

The Agency Workers Directive, currently undergoing consultation, aims to apply the principle of “equal treatment” in relation to basic working and employment terms and conditions after 12 weeks in a given job.

Apart from giving temporary workers the right to pay equal to that of permanent workers on the starting salary of the position they hold, they will also be entitled to other benefits such as holiday entitlement, holiday pay and being told of permanent vacancies. The changes to maternity leave could become more costly in 2012 when, under separate legislation, pensions become a contractual benefit and potentially part of the maternity leave package.

If small businesses will not hire women of child-bearing age because of equality legislation, millions of women could be affected.

Employment legislation should reflect the realities of the business world. There are currently almost 173,000 female and almost 142,000 male undergraduates who will be entering the employment market in the near future.

There are 5m small businesses in the UK employing about 12m workers. These businesses are preparing to face a surge of employment legislation that many fear will add to the cost and bureaucracy of hiring new staff. Greater maternity leave benefits, the extension of flexible working rights and new rules on agency workers will only add to the pressures on business owners.

Many fear the new legislation, which will come into force at various stages over the next few years, will only serve to make employment more difficult.

On the one hand

David Rosser, Director of the Confederation of British Industry (CBI) in Wales, says the current maternity and paternity leave allowance is “about right”.

He said: “The needs of both workers and employers have to be respected and balanced. It’s increasingly critical that we retain women who have families in the workplace.

Employers wanted a situation which gives flexible opportunities to women to allow them to stay in the workplace and retain their skills to balance their workforce and planning needs. And it’s probably about right at the moment.”

On the other hand

Considerable criticism has come from small businesses who argue that the proposals will cost too much and create further bureaucracy. Businesses desperate to stay afloat in the recession are opposed to their introduction.

In a poll of Federation of Small Business members, conducted in June 2009, 98.5 per cent of the 885 who responded said they were less likely to recruit temporary workers as a result of the extended rights which would be contained in the new legislation.

‘You can’t have an extension of flexible working and at the same time clamp down on the means by which many small businesses cope with it, which is often through temporary workers’

‘Such legislation can result in female employees becoming more discriminated against. ‘Businesses will think twice about employing a younger woman who might be thinking of having children in the next few years.’