Employment Rights Bill

Baroness Penn Excerpts

Committee stage
Tuesday 13th May 2025 Lords Chamber

[Lord in Waiting/Government Whip (Lord Leong) (Lab)]

My Lords, this has been a wide-ranging, informative and very exciting debate. I thank all noble Lords who have contributed. I take this opportunity to congratulate the noble Lord, Lord Harlech, on his four month-old son. I begin by recognising the key role that parental leave plays in supporting families—I wish it had been available when I became a father, at a much older age, some 18 years ago. I thank the noble Lord, Lord Gascoigne, for sharing his story about the difficult time he had during the birth of his children.

This Government understand that the arrival of a child, whether through birth or adoption, is the most transformative time in a family’s life. We understand that the current parental leave system needs changing so that it better supports working families. We have committed to do this and we are taking action in a number of different ways. Through this Bill, the Government are making paternity leave and parental leave day-one rights, meaning that employees will be eligible to give notice of the intent to take leave from the first day of employment. I hope that many noble Lords will welcome this position. This brings such leave in line with maternity and adoption leave, so simplifying the system.

[Baroness Penn (Con)]

The Minister said that this brings paternity leave in line with maternity leave, but for maternity leave, the right to pay is also a day-one right. Does he acknowledge that the Bill does not create alignment between maternity and paternity?

[Lord Leong (Lab)]

The noble Baroness is absolutely right. I just said that the leave is the same as maternity leave, not the pay. This brings paternity leave in line with maternity leave and adoption leave, thereby simplifying the system. We are removing the restriction preventing paternity leave and pay being taken after shared parental leave and pay, to further support working parents in assessing the entitlements available to them. Separate from the Bill, planning work is under way for the parental leave review, which will explore how well the current system supports working families and what improvements could be made.

Amendments 127, 80, 138 and 139 seek to make changes to paternity leave and pay. Amendments 127 and 139 are in the name of the noble Baroness, Lady Penn. Amendment 127 seeks to extend statutory paternity leave and pay from two weeks to six weeks and to increase the rate of pay to the lower of 90% or national median pay—although the drafting relates specifically to pay. Amendment 139 seeks to make statutory paternity pay a day-one right for all employees by removing the current continuity of working requirements. The noble Lord, Lord Palmer, has laid two similar amendments, Amendments 80 and 138. Amendment 80 would increase the minimum length of paternity leave from two to six weeks and require regulations to introduce the ability to take paternity leave at any time in at least the first year following birth or adoption. Amendment 138 calls for the existing flat rate of statutory parental payments to be increased, by doubling the rate from £184.03 to £368.06.

I hope to reassure the noble Baroness and the noble Lord, in part by highlighting several reforms to paternity leave and pay which took effect in April last year. These changes now allow eligible parents to take their leave and pay in two non-consecutive weeks; to take their leave and pay at any point in the first year after the birth or adoption of their child, rather than only within the first eight weeks, as was previously the case; and to give shorter notice for each period of leave. I hope that the noble Lord, Lord Palmer, will therefore agree that, while well-intentioned, Amendment 80 is not necessary in relation to when paternity leave is taken, for the reasons I have just explained.

I turn now to parental pay. Amendment 139 would make statutory paternity pay a day-one right. Currently, no parental pay entitlements are available from day one, including maternity pay.

[Baroness Penn (Con)]

Will the noble Lord clarify whether he just said that there are no day-one rights to parental pay, including for maternity?

[Lord Leong (Lab)]

I will read it again. Amendment 139 would make statutory paternity pay a day-one right. Currently, no parental pay entitlements are available from day one, including maternity pay.

[Baroness Penn (Con)]

Does the noble Lord acknowledge that maternity allowance is available from day one, at the same rate of pay as statutory paternity pay?

[Lord Leong (Lab)]

The noble Baroness is absolutely right: maternity allowances are available from day one.

Parental pay entitlements require employees to meet an average earnings test. Calculating whether newly employed parents have met this threshold would present a significant challenge to their new employers who administer parental payments.

Amendments 127, 138 and 139 would introduce a cost burden to the Exchequer at a time when public finances are under pressure. When considering calls to increase the level of parental pay generally, any changes will need to take account of the economic situation, the financial impact on employers and the needs of parents, and be made in consultation with businesses and stakeholders. The Secretary of State for Work and Pensions is required by law to undertake an annual review of benefits and state pensions, including statutory payments. This is based on a review of trends in prices and earnings growth in the preceding year. Generally, as with other benefits, parental payments are increased in line with CPI. For example, statutory maternity pay, statutory paternity pay and statutory adoption pay will all increase by 1.7% in April 2025, in line with the September 2024 CPI figure.

[Baroness Penn (Con)]

Does the noble Lord acknowledge that, in linking the payments to CPI, what is actually happening is that we are seeing a bigger gap between statutory payments and people’s salaries, as the national minimum wage is increasing by a greater degree? The process that the noble Lord has laid out is increasing the problem that we have of payments not coming anywhere close to replacing wages.

[Lord Leong (Lab)]

I thank the noble Baroness for that. That is the situation as it is now. Until and unless things change, that is what is happening.

Depending on individual circumstances, additional financial support will be available to parents. For example, universal credit, child benefit and the Sure Start maternity grant may be available alongside statutory parental pay.

I turn to the issue of shared parental leave. Where fathers and partners want a longer period of leave and pay, shared parental leave and pay is already available. Shared parental leave and pay offers up to 50 weeks of leave and up to 37 weeks of pay, which can be created for parents to share from maternity entitlements that the mother does not intend to use. Parents can use the scheme to take leave together for nearly six months, or intersperse periods of leave with periods of work.

I turn to Amendment 136, again laid by the noble Lord, Lord Palmer, and supported by the noble Baroness, Lady Whitaker, which calls for individuals who are self-employed or contractors to have access to statutory adoption pay within six months of the passage of the Bill. It would also require the terms “self-employed” and “contractors” to be defined in regulations, to set out a clear description of who would qualify for statutory adoption pay under this extended eligibility.

I want to reiterate my appreciation and gratitude towards all adoptive parents, who provide loving and stable homes to children who are unable to live with their birth parents. Currently, parental leave and pay entitlements are generally not available to the self-employed. This focus on providing parental leave and pay to employees is rooted in the understanding that employees often have less flexibility and control over their working conditions than those who are self-employed. There is of course the exception of maternity allowance, which is available to self-employed mothers as an important health and safety provision. It makes sure that mothers can take time away from having to work to recover from childbirth, bond with the child and establish breastfeeding if they wish to do so. For parents who do not qualify for adoption pay—for example, those who are self-employed or contractors—statutory adoption guidance advises local authorities to consider making a payment similar to maternity allowance.

In November 2024, the Government published Keeping Children Safe, Helping Families Thrive, in which we allocated £49 million to the adoption and special guardianship support fund for this financial year. This will enable local authorities and regional adoption agencies to offer a wide range of tailored support, including psychotherapy, family therapy and creative therapies, to adoptive families. These services are available following a locally conducted assessment of the adoptive family’s needs.

Amendment 128, tabled by the noble Baroness, Lady Penn, would commit the Government to introducing regulations requiring organisations which employ more than 250 people to publish information about their parental leave and pay policies. It is true that parental leave and pay policies are not extras. They are essential policies that allow people to manage their professional and personal responsibilities and play a huge role in addressing wider social and economic issues.

The Bill contains a number of measures which will improve the support working families receive, most notably by: putting in place legislation that makes it unlawful to dismiss pregnant women, mothers on maternity leave and mothers who come back to work for a six-month period after they return—except in specific circumstances; making flexible working the default, except where not reasonably feasible; and the requirement that large employers produce equality action plans. We feel that we are already striking the right balance between doing more to help working families and ensuring that these changes are manageable for employers to respond and adapt to. Therefore, we do not believe this is the right time to legislate to require publication of parental policies.

Amendment 76, tabled by my noble friend Lady Lister, would make it a legal requirement for the Secretary of State to begin a review of paid parental leave within six months of Royal Assent and to lay the review before Parliament within 18 months. I share the desire of all the noble Lords and Baronesses who have tabled these amendments today: I too want to see change made to the parental leave system to better support families, and I thank them for their clear dedication to improving the lives of parents and children. I recognise their concerns that the current system reinforces outdated gender roles. The responsibility for childcare remains, for many families, with the mother. For many, this will be through choice, but it is also reflective of a system that grants fathers and partners a short period of time off to be with their partner and child during this first year of life. Shared parental leave is available to qualifying fathers and partners who wish to take a longer period, but take-up remains low.

Family life has changed radically since the 1970s, when the then Labour Government passed the Employment Protection Act, which established the right to maternity leave for working mothers. We all agree that improvement needs to be made, and this Government have already begun that work by making paternity leave and parental leave day-one rights through this Bill. This removes a layer of complexity and makes the system more accessible. More needs to be done, and I recognise the fair point raised by my noble friend Lady Lister in Amendment 76 that a review needs to address the disparities in the current system.

The plan to make work pay—a manifesto commitment —committed to a review of the parental leave system within the first year of a Labour Government to ensure that it best supports working families. Planning is under way, and we hope to provide further detail soon.

[Baroness Penn (Con)]

Can the Minister confirm that the Government will meet that manifesto commitment to start the review within the first year, and can he give a timescale not just for when the review will start but for when it will be completed?

[Lord Leong (Lab)]

I can give the commitment that we will do this within the first year of the Labour Government.

[Baroness Penn (Con)]

Is that to start the review?

[Lord Leong (Lab)]

We are planning and conducting the review within the first year of the Labour Government.

It would be premature to make further legislation in this space before the parental leave review has taken place. We will, however, take my noble friend’s ideas and concerns into consideration, and I look forward to updating your Lordships’ House on the review.

Before I conclude, we understand the concerns raised by—

[Lord Leong (Lab)]

I thank the noble Lord for that intervention, and I will speak to my officials and write to all noble Lords accordingly regarding the review.

We understand the concerns raised by micro and small businesses around proposed day-one rights to paternity leave. Those employers often work with very lean teams and tight margins, so any perceived increase in entitlement can raise questions about costs and continuity. Introducing day-one rights is about fairness and consistency. It ensures that all fathers, regardless of tenure, have the opportunity to support their families at a critical time.

[Baroness Penn (Con)]

I am sorry to interrupt the noble Lord again. He has just talked about the importance of a day-one right to paternity leave, giving fathers the ability to take that leave, but, as the noble Baroness, Lady O’Grady, said, unless it is paid, swathes of dads will not be able to afford to take it. If the Government recognise the importance of this, why will they not make it paid?

[Lord Leong (Lab)]

I thank the noble Baroness for that. As I said in my previous paragraph, we are making day-one rights such as this and consulting, and the review will look at all the issues that the noble Baroness has brought forward. Until we get the review done, I really cannot commit to anything at this stage.

For businesses, this kind of support fosters loyalty and improved retention in a competitive hiring environment. Demonstrating a commitment to family-friendly practices helps attract and keep skilled employees. We also encourage proactive workforce planning. Cross-training and flexible staffing arrangements can mitigate disruption during short absences. Many small employers already manage similar situations around holiday leave or illness, so this policy is not about adding burden but about building a workplace culture where staff feel valued from the very start. We are committed to working with small businesses to ensure that the transition is smooth, supported and sustainable.

I hope I have reassured all noble Lords of the Government’s commitment to parental leave and respectfully ask that the amendment be withdrawn.