14
Examination of witnesses
Alexandra Hall-Chen and Jane van Zyl.
Q131 The Chair: Good afternoon, everyone. I welcome you to this meeting of the Children and Families Act 2014 Select Committee. We are taking evidence in public this afternoon. The session is being broadcast online and a transcript will be taken. Perhaps I can start by asking both our witnesses to briefly introduce themselves. Alex, can I turn to you first?
Alexandra Hall-Chen: Yes, of course. Good afternoon, everyone. I am a senior policy adviser for employment at the Institute of Directors, an independent organisation representing approximately 20,000 senior business leaders, company directors and entrepreneurs.
The Chair: Thank you very much indeed. Jane?
Jane van Zyl: Hello, everybody. Thank you for having me. I am the chief exec of a charity called Working Families. We do three things. We provide free legal advice to empower working parents and carers to understand and use their workplace rights; we work with employers to support them to create, build and sustain flexible and family-friendly workplaces; and we use those two views, what we know works and what we know does not work, to influence positive policy change.
Q132 The Chair: Thank you very much indeed. As I am sure everyone knows, we are today focusing on Parts 7 to 9 of the Act, which relate to employment rights. I will kick off with general questions, if I may. They are questions we have been pursuing in our previous session. What is your take on why the take-up of shared parental leave and statutory shared parental pay has been pretty low? Alex, would you like to start?
Alexandra Hall-Chen: Yes, sure. It is not an issue that we have explicitly explored through our member polling. However, we have an expert advisory group on inclusion and diversity in the workplace that has given us feedback on it. The feedback can broadly be split between policy/system societal-level drivers and employer-level drivers. On the policy level, the feedback that we have had is that in some cases meeting the criteria for who is legally defined and classified as an employee can be difficult. As I am sure you know, many fathers do not qualify for shared parental leave because they might be agency workers or self-employed.
There is also the widely commented-on fact that shared parental leave pay is often far below what parents, particularly men, are likely to earn; men are statistically more likely to be the higher earner in a household. In cases where employers are not able to top up the statutory pay, the financial hit for them may be too great. We suspect that it may be amplified by the cost of living crisis. It will be interesting to see what the data shows as to whether the modest increases that we have seen in recent years dip or stall this year.
On the employer level, some of the feedback we have had is that there are large employers that are able to offer very generous parental leave packages. We see instances of where that really works in increasing uptake. Aviva is a commonly cited example; UK staff have the right to a year off work, including 26 weeks of full pay, regardless of their gender. Take-up is extremely high, with 99% of new fathers in 2020 taking parental leave. Where employers are able to offer generous packages, take-up tends to be very high. A lot of our members are SMEs, which would struggle to match what larger employers can offer as part of their employee proposition. It is a mixture of system level and employer level in what employers are able to offer, particularly in the current economic climate.
The Chair: Thank you. Can I press you a little bit on the figures? The eligible take-up of fathers now is only at 3.6%, and the Act came into force in 2015. When the legislation was first passed, would you have expected it to have higher take-up by now?
Alexandra Hall-Chen: Yes, I would. A lot of the reasons that I am sure we will discuss in greater detail can be used to explain why that has not happened. Most of us would have expected it to be, if not very high, higher than the estimated 2% to 8% that the Government have cited.
The Chair: I am not trying to put words into your mouth, but does that suggest to you that there is a basic design fault with the scheme that was passed in the legislation?
Alexandra Hall-Chen: I imagine we will come on to discussing potential policy solutions. We can look at examples of other countries where there is a greater element of non-transferable leave and the impact that has had on uptake. However, I also highlight that there are countries such as South Korea and Japan that have very generous parental leave and pay but very low rates of take-up, so it is clearly an issue not just of policy but potentially of culture as well.
The Chair: Thank you very much for that. Jane, can I get your perspective on the issue of the low take-up?
Jane van Zyl: For us, the low take-up is a result primarily of three things: cost, culture and conditionality; and, fourthly, communication. On cost, most fathers cannot afford it because shared parental leave is paid at £156.66 a week or 90% of your average weekly earnings, whichever is lower. At a time when family expenses are rising, that is going to be a very difficult thing for people to do. Then there are the cultural norms. We live in a gendered society. Mostly, it is the expectation that the mother will take the leave, and that can be challenging. Often, these policies have been designed with the idea that the woman is going to be the primary carer.
On conditions, shared parental leave and pay are not available for everyone. To be eligible for shared parental leave, you must earn on average at least £123 a week, and the TUC estimates that that rules out 40% of fathers. In addition, 10% of employees are ineligible because they have changed their job in the last six months. There are all kinds of reasons why it will not happen. In short, I agree that it is disappointing that it is only 3.5%.
The Chair: To pursue the point you made about culture, if you had free rein and could do what you liked, what do you think would most likely change the culture?
Jane van Zyl: I support what everybody else has been saying. We would like shared parental leave to stay in some form because we think it is really important that employers and employees have an element of choice in how they run their lives. However, we think that a stand-alone amount of relatively well-paid leave on a “use it or lose it” basis would change the dial.
The Chair: That is certainly what we heard in the previous session, so thank you very much indeed for that. I now invite my colleague, Baroness Bertin, to ask her question.
Q133 Baroness Bertin: Thank you both for coming. I will start off on the “use it or lose it” scheme that you just mentioned, Jane. We spoke about it a bit in the previous evidence session. I do not want to bring it all down to costs, but I want to get your views on how in reality that would be funded and what the way forward on it could be. I am sure most people agree that it would be wonderful to deliver, but it boils down to the pennies, unfortunately.
Jane van Zyl: I agree that it is a very difficult issue because, as a society, we expect parents to have children in order that we have a society in the future. We push a lot of the burden of that cost on to employers, and that has the effect that employers that can afford it will enhance parental pay and maternity pay, which obviously makes an enormous difference to mothers. If we do not do that, generally in this country women take the amount of leave that is paid. The same will be true for fathers. If you are not paying it at a rate that people can afford to take it, it is unlikely that they are going to take it.
For smaller organisations and SMEs, it is certainly a difficult conversation. As a charity, we employ 26 people and we had three lockdown babies, so that was really challenging for us. We improved our benefits to six weeks’ full pay and six weeks’ half pay, but that is not particularly generous compared with Aviva. Cost is an issue, but if we want to ensure that we have happy children and happy parents, there has to be some element of paid leave. If we are to change the dial as far as gendered roles are concerned, “use it or lose it” is really important.
The Fatherhood Institute has some great research. One of the things it says is that where fathers spend time with children when they are much younger, it ends up with a lower rate of family breakdown, and where family does break down there is a much better relationship between the fathers and the children.
Baroness Bertin: That is so interesting. It strikes me that the answer to the breakdown or the ending of motherhood inequality is that this is the sort of area we have to be in. Alex, can you comment on that as well, particularly from the IoD perspective?
Alexandra Hall-Chen: Yes, absolutely. I agree with a lot of what Jane said. There is clearly a strong business case for employers to be able to offer more generous parental leave, and that is why a lot of the larger organisations that are able to do it do so. It is a very strong element of any employer’s proposition to potential employees. In terms of retention, we have asked members that offer flexible working, which can be one element of supporting parents, why they do so; very often it is about retaining staff and helping them to have a better work/life balance. Our concern about any policy change would be where it is funded, perhaps unsurprisingly. We would want to see more detail.
There are instances of countries such as Sweden where at least some of the costs are borne by government. We think there is potential to explore that more. It would definitely be of concern to SMEs in particular in this economic climate, when they are dealing with inflation, much higher employee wages, rises in national insurance and upcoming corporation tax increases. To have additional costs at this time would be extremely difficult, but it is a conversation we would very much welcome with government.
Q134 Lord Cruddas: The Women and Equalities Committee recommended replacing shared parental leave with extended paternity leave. What is your view, please? Jane first.
Jane van Zyl: We would not want to see it entirely replaced because shared parental leave is the only way in which fathers who want to be primary caregivers can do that, but we certainly would like to see “use it or lose it”. For us, although we work with 150 employer members—at some point we touch one in 29 employees in terms of the working policies of the employers we work with—we know that for SMEs it is a really challenging area. It would be fantastic if we could offer three months for all fathers paid at 80% of salary, but obviously the cost of that has to fall somewhere. It cannot always fall to the employer, particularly to smaller employers.
Lord Cruddas: You should have come in on the first session. You probably heard some of my points.
Jane van Zyl: Yes.
Lord Cruddas: I agree with you. Somebody somewhere among all this has to pay for it.
Jane van Zyl: Our view as a charity is that government should be stepping up, particularly when it comes to SMEs, and enabling them to provide the same kinds of benefits that the large organisations can. Organisations such as Zurich and Aviva give six months’ paid leave. That is absolutely extraordinary and it is going to change the dial.
Lord Cruddas: I could not afford that as an employer of 1,000 people. You could not afford it in your charity.
Jane van Zyl: Yes.
Lord Cruddas: It is lovely for the children.
Jane van Zyl: The long-term benefits over the life of the child and over the life of the family also need to be taken into account, because that will benefit us all as a society moving forward. If Aviva can afford to do it on its own, it probably does not need the support, whereas smaller employers absolutely will need the support. Sorry, Aviva—I think you are wonderful.
Lord Cruddas: If it believes in it that much, it can pay for my employees to have six months. I do not mind.
Jane van Zyl: I am not sure it would get the benefit of that.
Lord Cruddas: No, but it would make society a lot happier, would it not? I am joking.
Alexandra Hall-Chen: Many of our members would instinctively recognise and welcome it as a pro-family policy. If government were to pursue it as a policy route, I could not see us opposing it. If it was announced tomorrow, our members would understandably have concerns around staffing in what is already a very tight labour market and around the costs. As I said before, we would want a discussion about where those costs would be borne. It is clear that there is, as I said before, a strong business case that policies such as this, particularly the “use it or lose it” element that Jane mentioned, have the potential to improve gender equality in the workplace, which is something we would absolutely welcome, but our concern would be where the costs would be borne, particularly on SMEs but on employers of all sizes.
Q135 Baroness Massey of Darwen: I want to ask a question specifically about kinship care, which includes family and friends carers. We know that it generally works well for the children, but the carers are very often taken for granted. I want to ask about it in relation to paid leave, et cetera. I was struck by some evidence that the organisation Kinship gave. It said that kinship carers, unlike adoptive parents, “currently have no legal right to paid time off from work when they become kinship carers. Many find they have to negotiate unpaid time off from work at a time of emergency”, for example, unlike adoptive parents, and that “they have to rely on the good will of their employers”. Jane, why do kinship carers not have rights?
Jane van Zyl: I have absolutely no idea why kinship carers do not have rights. As far as we are concerned, however you acquire your family, whether it is through adoption, IVF, surrogacy or childbirth, all those things create a family, and everybody with a family should have equal rights. We are not sure why they do not.
As you mentioned, Kinship did an annual survey in 2017 that showed that 85% of kinship carers are of working age, so it is absolutely critical for them, and 73% were working prior to becoming a kinship carer, but more than one in two have to give up work in order to manage the care. I point again to the fact that, just when the costs for your family are increasing, you find it impossible to continue working if you are to meet your caring responsibilities, which seems really odd and must be an additional cost to government.
Baroness Massey of Darwen: Absolutely. Alex, do you want to add something to that?
Alexandra Hall-Chen: We do not have specific data or feedback from members on this but, from an employer perspective, there is no reason why the treatment would be different. Business leaders, as humans first and foremost, would recognise and respect any work that the Government did to put the needs of children first, regardless of the specific structure of the family in which they are placed.
Baroness Massey of Darwen: Do you know of any examples of employers working with kinship carers to help them?
Alexandra Hall-Chen: I do not at present, but it is something that we could ask our membership.
The Chair: If you were able to make any inquiries among your membership, the committee would be very pleased to hear that.
Baroness Massey of Darwen: Indeed.
Jane van Zyl: We can ask among our employer members. My instinct is to say that all our employer members would have policies that go across all kinds of families. Irrespective of how you acquired your family, you would get the same rights.
The Chair: Normally, if they had those sorts of policies, do you think they would specify adoption?
Jane van Zyl: We work with between 150 and 160 employer members and they tend to have 250-plus employees, so are much larger organisations. They would simplify their policies to just talk about parents.
Baroness Lawrence of Clarendon: Earlier on, we heard about the self-employed and that they have no rights. Do you have any self-employed in your organisation?
Jane van Zyl: No. We occasionally provide advice on our helpline to people who are self-employed. Last year we had 1.6 million unique views of our advice pages that are aimed at individuals but, as Olga said earlier, the self-employed have so few legal rights that we would not have a lot of data.
Q136 Lord Bach: Thank you for the answers so far. I am going to broaden it out—as you know, Jane, because you heard part of the first session—to flexible working generally. How well has the right to request flexible working arrangements, which you have after six months’ employment, worked for employees and employers, and what effect has the pandemic had on take-up? What effect do you think the after-effects of the pandemic will have in this area in the months and years to come? Jane, can I ask you first?
Jane van Zyl: Certainly. For us, it is incredibly important to think through what flexible working is. Currently, it is being conflated with hybrid working, which is some time in the office and some time at home. That affects only a certain number of people. If your work is place based and you have to be somewhere to deliver your work—if you are a cleaner, a cook, a brain surgeon, a doctor, a nurse, or work in a supermarket or among a huge range of essentially key workers—you cannot have that kind of flexible working. At the moment you cannot do brain surgery from home; you have to be there with the patient.
We know that parents want flexible working. For us, flexible working is everything from some ability to work at home, working part-time, job shares and flexi-hours to team rostering where a team looks at the work that is required, is set parameters by its employer and then determines which individuals can manage that time. For us, it is really important to understand that flexible working is not just home working, because that would impact only on knowledge workers.
We interviewed just over 3,000 working parents and carers in November 2021—the figures I am referring to are what we refer to as the Working Families Index 2022—and three-quarters of parents want to work flexibly. There is unmet demand, particularly from ethnic-minority parents and those with large families. There is something around caring responsibilities that are not just for children. There is also something around caring responsibilities particularly in larger families where you might have older members of the extended family.
Timewise did some research that found that only two in 10 jobs are advertised flexibly. For us, flex generally is one of the most consistently viewed topics, particularly for single parents and carers of disabled children who are overrepresented among our service users. We have a flexible working request template letter that is downloaded approximately 8,000 to 10,000 times a month. That is the demand for flexible working that exists. Working Families, as a charity, for many years has said that working from home is no substitute for childcare. As we found out during the pandemic, you cannot do a job of work while you are doing childcare. They are two entirely separate things.
Lord Bach: Not even teach your child.
Jane van Zyl: You cannot teach your child, look after your child, do a job of work and maintain your sanity in any world. Certainly, flexible working is much more than just hybrid working. That is what parents want and it traps them in jobs, as was said earlier. You cannot make the choice to leave an employer and move to a different employer that may have a job you can do because you now have five more years of experience. You are trapped in your job. That is not good for our economy or for the employer, which has a worker working for it who could be doing something different and something better if at a new organisation they could only get the flexibility that they get where they are.
Our legal advice team hears all the time from parents and carers who have had negative experiences with employers. Just before the pandemic, we had somebody contact us. She had moved from where she was. She had caring responsibilities for her husband. She was told at the time of the job that flexible working was not a problem. When she then started working out the arrangements with them, they withdrew the offer of employment.
Alexandra Hall-Chen: We have some data from the monthly polling that we do of members on flexible working. We have asked questions related to flexible working over the past 10 years or so, so we can, to an extent, see how it has changed or not changed over time. We do not have quite enough granularity in the data to be able to pinpoint whether the 2014 Act or previous legislation has had a concrete impact on uptake, but the data seems to show us that the vast majority of our members have been offering flexible working for some time. The extent to which that is pervasive throughout their companies is something we do not have data on, but consistently around three-quarters of our members say that in some form they offer flexible working, and that where they offer it there is very high uptake.
Back in 2018, when members told us that they offered flexible working, about 90% of them said that at least some of their full-time employees had taken up the offer of flexible working. It is very clear that there is both a strong business case, reflected in the fact that so many of our members offer it, and very high demand for it.
On the pandemic, it is important, as Jane said, to recognise that hybrid working is only one form of flexible working. It is clear to us that the growth of hybrid working has been expedited by the pandemic. Back in January this year, we asked members what their long-term plans were around hybrid working, and around four in five said that in the long term they intended to offer some form of hybrid working—anywhere between one day a week working from home to going fully flexible and giving employees the opportunity to do that. It is completely up to businesses to determine what working arrangements work best for them, but it is clear to us that there is strong demand from employees in all sectors.
As Jane said, Timewise has been doing some fantastic work in this area, particularly around how flexible working can be extended to front-line professionals who are traditionally not included. It has been doing some pilot programmes in schools to look at the types of flexible working that can be offered to teaching professionals. There is a lot that we can learn from that.
Q137 Lord Brownlow of Shurlock Row: Thank you for all you have said so far, Alexandra and Jane. Do you feel that flexible working rights should be extended beyond what they are at the moment and, if so, how? Alexandra, perhaps you could kick off.
Alexandra Hall-Chen: We responded to the Government’s consultation on flexible working at the end of last year. Due to the strong business case that we see and the fact that more than half our members told us that they already accept, let alone consider, requests for flexible working from employees who have not been with them for 26 weeks, it is clearly in many cases already established good practice in business. We would support the Government in making the right to request flexible working a day-one employment right. There are specifics around how that would be implemented. For instance, we think it is important to retain the reasons that employers can currently give for turning down a right to request flexible working as they are at the moment, so that employers have the flexibility to ensure that working patterns do not impinge on their business models.
Jane van Zyl: As we represent both employers and employees, one of the most important things we focus on with employers is designing jobs so that you understand what the job requires, your employees understand what they are expected to deliver and you can focus on the outcomes of that particular role. We find that many of the employees who talk to us have been refused with literally the eight business reasons that have been laid out, cut and pasted into an email from HR. That does not seem to be in the spirit of the way the legislation was framed. We certainly would like to see the right to request as a day-one right because it will push employers to think about how the job can be done. We cannot think of a job that could not be done flexibly in some way, but there must be some out there. It is also about advertising jobs as flexible. That is really important to us.
The Government have rejected the idea of advertising more jobs as flexible, but Zurich, which Joeli mentioned earlier, has had huge success with advertising every single one of its jobs flexibly in some way. It has had a significant increase in all applicants, both male and female. It has had an increase in the quality of applicants. While initially its line managers were not entirely behind it, over time they have changed because within Zurich some of the jobs advertised are pretty niche, but it has had improved quality of applicants. It also had a 10% increase in the satisfaction rates of people who were already working part-time in some way in the organisation.
That is a particularly interesting example because Zurich has allowed the behavioural insights team in the Government Equalities Office access to its data. It will be interesting to track that over time to see what happens. It is a large employer and it can afford to do that.
We would like to see the limit on statutory flexible working requests change to three a year. At the moment it is one. We would like them to be decided on within two months, within eight weeks, because at the moment it can be nine months from the time you start working for somebody before you hear that your flexible working request has been turned down or accepted, which is really tricky for people, particularly the people we represent—working parents and carers—who already have caring responsibilities. You cannot leave a five year-old at home for nine months while you wait to find out whether you are going to be able to pick them up from nursery.
The Chair: Do you want to come back in, Alex?
Alexandra Hall-Chen: I want to pick up on a point that Jane made. In our polling, we also found that more than half our members supported the idea of employers having to respond within two months or less to flexible working requests. We would support that too.
Jane van Zyl: We think it would be a game-changer if employers had to provide clear reasons and then consider alternatives. If the employer says, “Well, that won’t work, but this will work”, that would also change the dial.
Lord Brownlow of Shurlock Row: Thank you for that. It demonstrates to employers that how you treat your colleagues and future colleagues matters, and you might be the beneficiary of an enhanced relationship with your colleagues if you go down the route that Zurich has followed. I have certainly found that in my businesses.
Q138 Baroness Prashar: My question is about international examples, as you heard earlier. Are there things in other countries that we can learn from—statutory rights and policies that might support parents?
Jane van Zyl: There were some mentions earlier. All EU countries have been required to adopt at least two months of non-transferable paid parental leave per parent, with another two months’ unpaid leave, making four months’ leave per parent in totality. Germany, Japan and Canada extend the paid leave offered to families. If both parents take up some form of leave entitlement, they are given a bonus. Portugal also offers a bonus payment to families where the father shares part of the initial parental leave. There is a real push in those countries to get families to take it. In some countries, a significant amount of leave is provided but it tends to focus only on the mothers. Where there is a focus purely on the mothers, it will be the mothers who continue to take the leave.
Since 2021, Spain offers each parent 16 weeks’ leave at full salary. We are an outlier. We offer relatively long periods of maternity leave, but we have some of the lowest entitlement to well-paid parental leave. We determine well paid as more than 66% of normal earnings. In total, the UK offers zero months of well-paid leave as a family entitlement, zero months of well-paid paternity leave and 1.4 months of well-paid maternity leave. Paternity leave is mostly well paid in other countries. The Netherlands has an interesting policy. Its maternity and paternity leave are fully paid but short. It has 26 times the number of working hours per week per parent per child. Essentially, that is six months, which each parent can take. Leave is an individual, non-transferable entitlement. There is a real push to share care.
Baroness Prashar: Is there anything you wish to add to that, Alex?
Alexandra Hall-Chen: On learning from best practice, when it comes to shared parental leave and paternity leave, a lot of the countries that Jane has just mentioned that have more significant periods of non-transferable parental leave are potentially areas we can learn from. I mentioned Sweden earlier. Sweden gives both the mother and the father 90 days’ non-transferable leave and an additional 300 days that they can share between them. That gives both encouragement for men to take a significant amount of time, which will help with gender equality in and out of the workplace, and flexibility to both partners, which Jane mentioned earlier as being really important.
As well as learning from best practice, it is important to learn from countries where things perhaps do not go so well, as mentioned earlier. Clearly, Japan and South Korea have very generous policies, and these are fantastic case studies, but there is a question about why take-up is so low and how we can avoid some of the pitfalls there. Personally, I suspect that some of that is around culture.
Baroness Prashar: From your work in this area, can you highlight to us examples that you think would work in our context in pushing us to get greater take-up and changes that you would like to see?
Jane van Zyl: From where we are to where we want to get to is quite far. For us, it would be an iterative process with a goal. We can certainly send you our ideas.
Baroness Prashar: That would be very helpful. Thank you very much indeed.
The Chair: Do any colleagues have a supplementary question?
Baroness Bertin: I have a very quick one in the context of trying to build up policies that get employers over the line with regard to flexible working. Do you have a view on how well job sharing is going? We have not mentioned that. I have found in my own business life that if you can get a successful job-share going you can solve a lot of issues, in particular keeping women in very senior roles that are part-time.
Jane van Zyl: Again, Timewise does some really good work here. It has identified a couple of very senior job-shares, both women. I know that Aviva had a job-share that was two men. Take-up is pretty low across the United Kingdom. It is definitely less than 10%. It might even be as low as between 2% and 6%. Those are the numbers that spring to mind, but—forgive me—my memory may not be what it once was.
It resolves an enormous number of issues. In our charity, two of our senior posts are both job-shares. Nobody is quite as interested in the job you do as your job-share partner. As an employer, you get twice the amount of creative problem-solving that you would with just one individual.
Baroness Bertin: If more was done to make that policy work, it could reap benefits. It would be interesting to know what Alex thought from the IoD point of view.
Alexandra Hall-Chen: Again, it is not something we have specific data on from members, although it is something we can potentially ask in our polling. It seems to me that it is one of the arsenal of tools in flexible working to improve the situation, and that it clearly holds a lot of potential. We would be interested in looking at that in more depth if it would be of interest.
Baroness Bertin: Thank you.
The Chair: Thank you very much. You have given us a lot to think about. You have mentioned several things that you thought might be game-changers. If there was just one thing that you were very keen that we recommended in our report in the whole area of flexible working and parental leave, what would it be?
Jane van Zyl: For me, there would be two things. Do not bin shared parental leave entirely, and bring in stand-alone, well-paid “use it or lose it” for fathers.
Alexandra Hall-Chen: From an IoD perspective, we would not proactively campaign on one specific change. We accept and welcome that the Government should act in a pro-family way. We encourage seeing more detail about how any of the changes would work and we would be keen to engage in a dialogue about how we could make any of the changes that are suggested workable for business.
The Chair: Thank you both very much for that, and thank you again for your time and answers this afternoon. It has been really fascinating. There is a lot for us to mull over. We recognise the range of different perspectives in this area. It has been very good. Thank you very much indeed. I now draw this meeting to a close.
