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  3. Ed Miliband’s new policy on Paternity leave, and what it means for businesses

Parental leave is tricky for businesses, as Ed Miliband found out today.

Whilst many parents may welcome his proposed changes to Paternity leave, it leaves a sour taste for many business owners.

With the incoming rules on Shared Parental Leave fully taking effect for babies due on or after the 5th April, businesses are already concerned about how parental leave will affect them in the future. And with an upcoming election the issue is sure to be even more pronounced.

So what exactly is Mr. Miliband proposing?

Essentially, as you may already know, fathers are allowed to take two weeks of paid leave when their child is born. Statutory pay being £138.18 per week.

However, under a Labour government it is suggested that not only would the amount of leave be doubled to four weeks, but statutory pay would increase to £360 per week as well. This is in response to his, and supposedly his party’s, belief that the new system of shared parental leave will have limited appeal.

How could this affect UK businesses?

According to the IPPR, cited here in the Guardian, this change could mean that uptake of Paternity schemes could increase from the current 55% to 70% – meaning that for the level of 40 hours at the National Min. Wage, the change would cost businesses £150m in 2015/16. And that’s on top of the current level of pay.

However, the Labour leader believes that this will be a real benefit to employees and employers alike, as he was set to say that “At the heart of Labour’s plan is the belief that Britain succeeds when modern working families succeed” according to the FT.

The British Chamber of Commerce is not yet convinced though. Not only does Director General John Longworth (in the same FT article) believe that the number of changes in recent years have made things more unstable for businesses, but “it also raises the spectre of a dad being off for a month, returning to work for a couple of weeks, and then asking for shared parental leave as soon as he is eligible.”

Family is a difficult issue for businesses and government alike, and it seems no different this time. Time will tell whether this policy will help bring the Labour government to power, or scupper their chances entirely. However we’ll certainly be keeping an eye on any changes to employment law policy very closely!

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