Fair and modern workplaces

PayrollThe last two updates from the CIPP covered the four part consultation on Modern Workplace. This included proposals on the introduction of a system of flexible parental leave; a right for all employees to request flexible working; changes to the Working Time Regulations; and measures to encourage equal pay for equal work between men and women.

The CIPP policy team conducted a survey of our membership to find out what concerns and issues these proposals raise in the reality of the workplace.  To follow are summaries of the key areas of concern for employers as identified by our members.

Flexible parental leave
CIPP members are in broad agreement with the proposal to reserve 18 weeks maternity leave exclusively for mothers followed by a period of flexible parental leave. There are however, reservations over the suggestion that the notification of parental leave be based on a self-certification process, with several members suggesting instead that a form similar to the current MAT B1 (medical evidence showing the expected date of childbirth) be introduced for both maternity and parental leave. 

Employers and payroll staff are also worried that the increased flexibility enjoyed by employees will create problems for them when covering the absence. An overwhelming majority of respondents favoured the suggestion that parents should provide an indication of their full plans for parental leave prior to the child’s birth.

The consultation asked if parental leave and pay should be available to mothers and fathers on an equal basis. Despite predicting problems administering such a system, more than 64 per cent of respondents agreed with this proposal.  There were concerns regarding how employers would be able to monitor what leave the other parent had taken when the parents work for different companies, and concerns regarding covering the absence for two separate jobs when the parents both work for the same company.

The consultation asked if it would be inappropriate to exempt small and medium-sized employers from the flexibility provisions and an overwhelming 93 per cent agreed that these employers should not be exempt.

Although recognising that smaller employers may need help and support, CIPP members felt that all employees should be treated the same regardless of the size of the organisation they work for and that such an exemption would be confusing and unfair.

78 per cent of those who responded believe that preventing fraud is the biggest challenge to administration. This was closely followed by 71 per cent who believe record keeping will be difficult and 51 per cent who feel that compliance will be an issue.

Currently there is a year’s qualifying period for existing parental leave and one of the questions asked was if this should be retained, or should the two types of leave be consolidated to avoid confusion. Three quarters of respondents felt that the two types of leave should be consolidated. Amongst those who disagreed the main reason was that the year’s qualifying gives some protection to employers. 

Highlighting difficulties
The consultation asked if there were any further comments on the proposals for flexible parental leave and the following three comments show just how difficult it will be to introduce a system which suits all. 

“The proposals seem incredibly complicated, with the burden once again falling on employers. It is difficult enough to plan shifts, taking into account holidays and sickness, without the possibility of extra leave being given.”

“It is essential that employers retain the right to decide on the level of flexibility that is appropriate or possible in a particular role. We already find with the existing arrangements that some returning mothers feel they have a right to choose to work part time with hours to suit them, and are then very upset when they find that the employer can not accommodate this. We have experienced threats of legal action citing sex discrimination on the basis that the situation only arises because they are returning from maternity leave.”

“The government need to give couples and families as much flexibility as possible. The fewer rules involved the better. Every family is different, every family’s finances are different, views on working are different; each family life is different. The government is headed in the right direction, they just need to stop pigeon holing and let people make their own choices by giving multiple options that fit better to their lifestyles.”

Flexible Working
Respondents to the CIPP survey recognised the need to extend flexible working to all employees, including allowing employees to make an additional request within 12 months if they expect the need for the original change to last less than 12 months. Once again there were concerns over the additional burden this would create.

The consultation document does acknowledge that flexible working presents an administrative burden for employers. The following member concerns capture the issues which affect most payroll departments if the business offers flexible working.
•    Calculating the pro-rata pay
•    Recalculating the holiday entitlement (if less days are worked)
•    Issuing a new contract (we don’t have a separate HR dept)
•    Ensuring the bank holiday pay is correct.
•    Ensuring the correct rate of statutory sick pay and company sick pay is paid.
•    Calculating the correct value of overtime (is it at basic rate? Is it at time and a half?)
•    Monitoring timekeeping
•    Recalculating pension contributions

Working Time Regulations (WTR)
CIPP members were unanimous in their verdict that employee entitlement to reschedule/carry forward leave should be limited to the four week entitlement under Regulation 13 and should not include the extra 1.6 week entitlement under Regulation 13A. Members also agreed with the proposal to amend the WTR to specify the order in which leave is deemed to be taken. 

“As the situation will be very complex a clear set of rules will prevent disagreements between employers and employees on types of leave and interpretation of what has been taken when.”

The consultation asked if there was agreement that there is no merit in amending the WTR to limit the accrual of annual leave during sickness absence to the four week entitlement under Regulation 13. 87.5 per cent of respondents agreed with this proposal despite the possibility of additional burden on payroll staff.

“The administrative burden will be huge, and that should perhaps be seen as an indication of the fact that the whole matter of accrual of untaken holiday while sick is fundamentally flawed. But the burden is not a reason not to limit it to Regulation 13. It should be underlying principle that matters, not how much work it will be.”

Equal Pay
Equal Pay is, in a lot of businesses, more likely to be the concern of the actual employer or HR department than payroll. However, some organisations do not have a separate HR department, and in all cases it is likely that the payroll department would be involved if a pay audit were imposed. Worryingly, 20 per cent of CIPP members who responded thought their organisation would struggle to undertake a pay audit because of the lack of grading in some organisations, and a high degree of diverse employments in others. The CIPP would suggest a government publicity campaign to highlight the need for such information to be recorded if this proposal is introduced.

Again the question was asked if there should be an exemption from the requirement to conduct an audit for micro employers and/or small employers. Although there were some concerns around the resources of small businesses to conduct such an audit, 70 per cent of respondents felt that there should be no exemption.

The consultation asked if there was agreement with the proposal that if a court decides a pay and an audit is required, then the results of the audit should be published.  Responses to this question were fairly evenly split, with 55.6 per cent disagreeing to publication, the main reason being the need to prevent the salary of individual employees being disclosed.

“Employees themselves are very protective of their remuneration detail and publishing them is likely to cause ill feeling towards an employer even if they are ordered to do so. There are often good reasons for salary differentials that are not always understood or accepted by employees and this kind of publication could increase staff dissatisfaction and turnover.”

This consultation document is the first in what would appear to be a very detailed consultation process. Although the aim is to increase flexibility without adding to the administrative burden it appears, from responses to the CIPP member survey, that although the government is on its way to achieving the flexibility, these proposals will indeed bring additional burden.

Many of the proposed changes are complex; both for employees and those staff in payroll and HR who will need to implement the changes and advise how workers will be affected. The CIPP have formally responded to this consultation with the findings of the survey. The government will be publishing their overall response later in the year where we hope to see evidence of them listening to the views of the very people who will be responsible for implementing the changes.