Family-friendly laws: blessing or burden?

New parents now have the right to share maternity and paternity leave between them ― the latest in a raft of “family-friendly” regulation changes. But what does the new law mean in practice and will it be small-business owners who are left carrying the cost?

What do the paternity leave changes mean?

• Since 3 April 2011, fathers have had the right to take up to six months’ paid paternity leave, on top of their current two-week entitlement, but only if the mother returns to work early. 
• Businesses are required to pay Additional Statutory Paternity Pay (ASPP) for up to 26 weeks, but can recover at least 92 per cent of this — more if their National Insurance payments are £45,000 or less a year.
• However, there is also no compensation for the added costs that a business incurs ― including the cost of recruiting and training a temporary replacement. 

What do small-business owners think about the potential impact on their firm? 

New paternity leave rules: the small-business view

Andrew Downie, managing director of Swansea-based NetBop Technologies: “As we only have six full-time employees, it will obviously have an affect on our productivity if someone requires paternity leave.

“But unlike other reasons for taking time off work, such as ill-health, paternity leave is something that can be planned many months in advance and, if necessary, additional assistance drafted in ― whether it be a self-employed contractor or via a recruitment agency.”

Hayley Chalmers, managing director, Short Couture, online fashion retailer believes that the rules could cause irreparable disruption to a small business. “Small firms should be able to opt out of these extended regs, and be able to go back to something reasonable like three months’ paid leave. They could then state this in their job ads.

“Trying to replace a person on leave could be expensive — not just in paying the salary, but in agency fees and time spent recruiting and training the person. When the original employee returns after many months, there is a period of relearning. The people left at the company are picking up the slack and this can cause bad feeling.”

Fiona Humberstone, managing director of Guildford-based Flourish Design and Marketing: “Rob, my senior graphic designer, took paternity leave last year, but his two-week paternity leave turned into seven weeks off as the baby came early and was very ill.

“As an employer and a mum myself, I knew the baby had to come first. But it did have a big impact on the business, especially as we’re a small team and the absence was unforeseen.

“The main problem was simply getting through the work without Rob. It wasn’t just the money issue ― how do you find someone of the calibre you have within your team with no notice? We’d planned to cope for two weeks, so it was just the unknown of the extended leave that was difficult. We didn’t want to let quality suffer, which meant that of course we couldn’t be as productive and therefore that month wasn’t as profitable. However, there was very little red tape.”

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