Paternity leave threat to firms

Kathleen Brooks
FOR years employers have been wary about giving jobs to women of child-bearing age, but they might soon be casting nervous glances at the males in their offices, too.

As of 6 April next year a father will be allowed to take up to 26 weeks additional paternity leave in the first year of their child’s life if their spouse or partner returns to work.

This extra leave will start 20 weeks after the child’s birth and employees will need to give employers eight weeks notice. But entrepreneurs can breathe a small sigh of relief, since the government plans to offer financial assistance to small firms that will be impacted.

So, how much will it cost a small business? A father who takes additional paternity leave will only be entitled to receive a statutory allowance of £124.88 per week. But firms can claim the entire sum back from the government. Very small firms can also get advanced financial assistance that could be used to cover extra hiring and training costs for replacement staff.

Philip Henson, partner and employment law specialist at Bargate Murray solicitors, says that very small businesses which have paid £45,000 or less in National Insurance contributions the previous year can apply for advanced funding from HMRC.

The government estimates that 4-5 per cent of fathers will choose to take additional paternity leave, and only 350 small businesses will apply for advanced funding. However, Henson thinks these numbers are too low: “The government’s own research found that in Denmark, where there are similar rules, the number of fathers who took additional paternity leave for children born in 2005 was 24 per cent.” If this happened in Denmark there is no reason to say it won’t happen in the UK, which would cause massive disruption to small businesses and could force the government to re-think its plans for financial assistance.

The British Chamber of Commerce – which says that it agrees with the paternity leave laws in principle – says that both the Conservatives and the Labour Party should stop tinkering with the law. For small firms, uncertainty is a killer.