Daddy don’t go – Changes to paternity leave threaten SMEs

The new paternity legislation, championed by Harriet Harman under Labour and continued by coalition advocates including Deputy Prime Minister, Nick Clegg, will enable new fathers to take up to 26 weeks additional paternity leave. This is on top of the statutory right for two weeks Ordinary Paternity Leave. They will be entitled to a paid paternity allowance for all the time taken within the mother’s statutory maternity leave of 39 weeks.

Campaigners for parental rights have welcomed the introduction of this new allowance for fathers and applaud Government’s intention to go even further with reforming what Nick Clegg denounced as “an Edwardian system” of parental support. Many in business however, particularly small businesses, are apprehensive of workforce planning difficulties and the additional costs that the new paternity allowances will bring. Furthermore there is alarm among business leaders that the changes due to come into play this April may only be the thin end of the wedge.

Nuts & Bolts In this article you can find out: ● What paternity rights your employees will be entitled to following April 3 this year ● What plans the government has to extend these rights ● What potential problems some manufacturers feel increased paternity rights pose for employers

Among those voicing concerns is Nigel Bruce, managing director of Caerbont Automotive Instruments. Bruce told TM: “We are still going through one of the most challenging periods I have seen in my working life for small businesses. We are having to work hard to stay standing, let alone develop. While people are undoubtedly our greatest asset as a business, I feel employment law is smothering us with red tape and constraints.” Bruce is keen to clarify that he does not object to the idea of increasing employee rights but is worried that government have not considered the repercussions for employers with limited resources: “I can understand that those in Strasbourg and Westminster need to ensure that parents get time off but it is extremely difficult to cover for them. It costs us, not only financially but also in terms of efficiency.” Bruce explains that in his 50-60 employee strong workforce niche skills are difficult to replace and the challenge is amplified by the fact that an individual often has multiple responsibilities. “Changes to the market place in recent years have demanded that retention of key skills and capabilities have been managed alongside altered cost constraints. On the one hand this has meant that staff have become more versatile and, as managing director, I am proud of the enthusiasm with which they have managed this. But there is a double edge to this sword in an organisation such as ours because there is much less demarcation and individuals perform more than one role.”

This is a situation that many readers will sympathise with. Although Bruce said that multiskilling and staff manoeuvrability on the shop floor made the absence of one staff member less threatening to the business than it might previously have been, he also described the pressure recently experienced in business support and administration when a key employee left for maternity leave. Three consecutive replacements have had to be found for this individual in the last six months as each, though competent and dedicated while in the role, left to seek better prospects and job security for themselves elsewhere.

It does not take much imagination to see that this scenario will become more common as paternity rights grow and the manner in which they can be claimed becomes more flexible. Furthermore the scale of change needed in workforce planning practices for an industry like manufacturing, still decisively male dominated, must be daunting. While larger organisations may see this diluted to some extent across a bigger employee footprint with greater replication of skills, it is difficult to imagine how some companies, with perhaps just one key design or electrical engineer, might not be brought to their knees if they are unable to refuse an extended period of paid paternity leave.

Gareth Jenkins is managing director of automotive manufacturer FSG Tool & Die and is also chairman of the Welsh branch of the manufacturer’s organisation EEF. He feels the urge for politicians to engage in emotive rhetoric, such as Clegg’s dramatic denunciation of current parental rights as ‘Edwardian’, is unhelpful to business. “A lot of the regulatory change we are seeing at the moment is, in essence, political. It is not that manufacturing organisations are against the principle of it, but we need time to adapt and to understand how we are going to run our businesses within the new framework. We need government to be a better partner to business.” The impression of battle worn weariness on the part of manufacturing directors in small businesses is palpable. On being asked whether increasing paternity allowances were a key concern in relation to other regulatory changes, Bruce resignedly replied: “This is just the latest of a long line.”