Terms and Conditions of Employment

Justin Madders Excerpts

Tuesday 11th February 2025 Commons Chamber

[The Parliamentary Under-Secretary of State for Business and Trade (Justin Madders)]

I beg to move,

That the draft Neonatal Care Leave and Miscellaneous Amendments Regulations 2025, which were laid before this House on 20 January, be approved.

[Madam Deputy Speaker (Caroline Nokes)]

With this it will be convenient to discuss the following motion:

That the draft Statutory Neonatal Care Pay (General) Regulations 2025, which were laid before this House on 20 January, be approved.

[Justin Madders]

I am delighted to move regulations under the Neonatal Care (Leave and Pay) Act 2023, which originated as a private Member’s Bill in the previous Parliament. I therefore pay tribute to Stuart McDonald, the former Member for Cumbernauld, Kilsyth and Kirkintilloch East, and Baroness Wyld for successfully steering the legislation through both Houses, so that it could secure Royal Assent in 2023.

The Act established new statutory entitlements to neonatal care leave and neonatal care pay for employed parents if their child starts to receive neonatal care within 28 days of birth and goes on to spend seven or more continuous days in care. These regulations are another step towards implementing neonatal care leave and pay in April 2025, and they are the first to be brought before the House under the Act.

There is currently no statutory entitlement to such rights for parents of children who require neonatal care. Parents in this difficult situation have had to rely on existing rights, such as maternity leave or annual leave, to be there to care for their baby and to support their partner. This approach has understandably caused additional stress for parents. Some mothers report that they had to leave work because they were not ready to return at the end of their maternity leave. As paternity leave is limited to two weeks, some fathers and partners have had to rely on statutory unpaid parental leave or the compassion of their employers to take time off work.

Around 40,000 babies a year spend more than a week in neonatal care. Once provisions on neonatal care leave and pay come into force in April, we estimate that around 60,000 parents will be eligible, and that around 34,000 parents will take up paid leave each year. Neonatal care leave will enable eligible parents to take a minimum of one week’s leave and a maximum of 12 weeks’ leave, depending on how long their baby receives neonatal care, on top of their other parental leave entitlements. It will be a day one right for employees.

Statutory neonatal care pay, like other family-related pay rights, will be available to employees who also meet continuity of service and minimum earnings tests. Eligible employees must have worked for their employer for at least 26 weeks, ending with the relevant week, and earn on average at least £125 a week before tax. If eligible, a parent will be able to claim a flat rate of £187.18 a week in 2025-26, or 90% of their average earnings, whichever amount is lower.

Employers will administer the statutory payments on behalf of the Government. Small employers will be able to recover 103% of the statutory payment from the Exchequer, while larger employers can recover 92% of payments and will therefore incur wage-like costs equivalent to 8% of the statutory payments they make. This is a similar arrangement to that in place for other parental payments.

Together, these regulations will provide protection and support for parents at an incredibly challenging time. These entitlements provide a floor, and employers can and should go further if they are able.

[Chris Vince (Harlow) (Lab/Co-op)]

Does the Minister agree that these changes will not only support parents who are going through a really difficult time but will also be good for employers? By showing that they are supporting their employees to return to work with these additional rights, this will be good for employers in the long term, too.

[Justin Madders]

My hon. Friend is right. The impact assessment refers to evidence showing that family-friendly policies are good for employers as well as for individuals. That is certainly the Government’s approach towards employment rights.

We have extensively consulted stakeholders, including charities and business representative organisations, to ensure that these regulations balance the needs of parents and businesses. These groups agree that the proposed reforms will provide substantial benefits to businesses, including the retention of their employees’ skills and knowledge, as my hon. Friend has just said. I will explain in detail a few points in the regulations, which have been developed through consultation with relevant Departments, including the Department of Health and Social Care.

We have a definition of neonatal care that encapsulates the different ways in which babies receive it, including beyond the walls of a hospital and through outreach care. This could include care that takes place in the family home, provided it meets the relevant criteria. We have included outreach care in the eligibility criteria to capture the many ways in which babies receive care, and to prevent a postcode lottery in which parents of children who receive the same clinical treatment may qualify in one area because they receive their treatment in hospital, but not in another area because they receive their treatment at home through an outreach care programme.

To ensure that as many parents as possible are eligible, the definition of “parent” in the regulations encompasses adoptive parents, foster-to-adopt parents and intended parents in surrogacy arrangements. Those who meet this definition will also be required to have caring responsibility for the child.

Having a baby in neonatal care is a difficult experience for any parent, whether the baby is admitted for one day or for many months. However, this entitlement will focus on parents of babies who experience prolonged stays in neonatal care as they will be in most need of additional support. A qualifying period of neonatal care will therefore be a minimum of seven continuous days, beginning on the day after the one on which the care starts. Starting the clock at one minute past midnight of the day after the child is admitted creates a consistent approach that does not vary from baby to baby.

The total amount of statutory neonatal care leave and pay available to parents will be capped at a maximum of 12 weeks, which balances the needs of businesses with the needs of parents. It is also worth noting that the entitlement will be in addition to other entitlements to parental leave and pay that parents may also be eligible for.

The leave and pay can be taken in two tiers. Tier 1 leave can be taken when the baby is receiving neonatal care and for one week after they stop receiving care. That leave can be taken at short notice, allowing parents to act flexibly in an emergency. Tier 2 leave can be taken after the baby has left neonatal care and therefore requires more prescription to ensure the needs of employers are balanced against the needs of employees. That approach provides flexibility for parents and crucially allows them to work around existing leave entitlements, such as maternity or paternity leave.

Employees will need to give notice to take leave and pay, and provide their employer with the information set out in the regulations. The method depends on which tier of leave they take and, as Members will expect, the stipulations in tier 1 are less stringent than those in tier 2. When the employee wants to take leave in tier 1, they will need to notify their employer before they start work on the first day of absence or as soon as possible thereafter. For pay, notice must be given within 28 days, beginning with the first day of the week in which pay is being claimed. When the employee wants to take leave in tier 2, they will need to give notice 15 days in advance for one week of leave and 28 days in advance for two or more weeks of leave. That is because leave in tier 2 can be more easily planned. The same notice requirements will also apply for pay. Furthermore, parents are not required to provide proof of their child receiving neonatal care. To make a claim in respect of pay, the employee may need to provide a signed self-declaration.

Parents who are out of the workforce on family leave for extended periods may be at more risk from redundancy when they first return to work. We have therefore ensured that parents on neonatal care leave will be protected from redundancy, and those who have taken six continuous weeks of neonatal care leave will also be protected until their child turns 18 months.

We anticipate that there will be some impact on businesses regarding familiarisation with the policy and managing the impact of employee absences. Like other family-related pay entitlements, employers will be responsible for administering the statutory payment on behalf of the Government. Overall, we estimate that the net annual recurring cost to businesses will be around £22.5 million. We also anticipate there will be a one-off familiarisation cost to businesses, which we estimate to be £4.7 million.

Despite those costs, we anticipate that there will be further benefits to businesses, as there is evidence that shows, as has already been mentioned, that workplaces offering a range of extensive family-related policies are more likely to have above-average performance relative to workplaces without such practices. My officials are working with His Majesty’s Revenue and Customs to ensure there is clear guidance on gov.uk to support employers in implementing this policy, and with Bliss, to which I pay tribute for its work in this area, to ensure that parents can access the information they need to understand their entitlement as easily as possible.

I thank all those who have been involved in the development of neonatal care leave, including the premature and sick babies charities, for their tireless campaigns and support. I hope they are proud that we have got this on the statute book and that the regulation will be introduced today. It will make a real difference to hard-working families, who need the support at such a critical time. I commend the regulations to the House.

--- Later in debate ---

[Justin Madders]

I thank all Members for participating in today’s debate—there have been some very thoughtful and moving contributions. I will start with my hon. Friend the Member for Thurrock (Jen Craft), who spoke movingly about Isla and her experiences in neonatal care. It was truly wonderful to hear that, having been given a 2% chance of survival, she recently celebrated her seventh birthday. That is a testament to the great work that many neonatal units do up and down the country, nurturing that very precious life and allowing it to flourish and grow. Of course, I would be happy to meet those from Isla’s Journey, but I will talk to my colleagues in the Department of Health and Social Care first about whether it might be more appropriate for them to conduct that meeting.

I welcome the support from the Liberal Democrat spokesperson, the hon. Member for Torbay (Steve Darling). He spoke about the importance of parental attachment, something that we are beginning to understand is vital to a child’s development—the more we can do in that area, the better. I also understand the point that the hon. Member for Eastleigh (Liz Jarvis) made, and I recently visited the Countess of Chester, which is building a new children and mother unit. That is absolutely fantastic to see, and clearly, we want to build on investment in this area over coming years.

I felt that the shadow Minister, the hon. Member for Mid Buckinghamshire (Greg Smith) was a little churlish in his support for these regulations. I do not understand the criticism on the basis that these measures were in the Conservatives’ 2019 manifesto, since they did not actually implement them. Given that their Government undertook a consultation six years ago, criticising us for bringing these regulations forward within six months seems a little rich.

Of course, the shadow Minister is already blaming the Employment Rights Bill before it is passed for any rise in unemployment. It is completely nonsensical to argue that legislation that is unlikely to be enacted until next year could be responsible for job losses now. It is the kind of talk that we heard when the minimum wage was introduced—it was wrong then, and it is wrong now. To address the shadow Minister’s point about why this day one right is not in line with pay, that is consistent with all other parental leave entitlements. Pay comes in after 26 weeks, because a baseline of information about a person’s pay is needed in order to implement such a right.

In conclusion, it is welcome to see support for these measures across the House. The first few weeks after a baby is born are precious, and for a child in neonatal care, that time is even more important. As we have heard, the lack of options for parents who find themselves in that truly challenging situation serves only to worsen what, for many parents, is the most traumatic period of their lives. We hope that giving parents the additional rights and flexibility they need through these regulations will provide some much-needed support, reassurance and stability. Parents dealing with a very ill newborn should not have to worry about whether they can get the time off work that they need, or indeed whether they will have a job to go back to at all. As a nation, we can all understand that, and of course the best employers do these things already. However, by legislating, we send a clear message that all parents in that situation—according to some estimates, there could be up to 60,000—will be able to put all their focus on their child, which is as it should be.

On that note, I commend these regulations to the House.

Question put and agreed to.