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A consultation document issued by the DTI.

Comments from ACCA
August 2003

ACCA supports, in principle, the idea of family-friendly policies in the workplace. We accept that, where circumstances and resources permit, �flexible� employment practices can work to the mutual advantage of employer and employee alike, cutting costs on the one side and helping to increase commitment on the other. We also respect the DTI�s overriding social and political objectives in this area.

Our principal reservations on the ideas set out in the document are two-fold. Firstly, the Government�s agenda in this area seems to be being pushed through in haste. The new initiatives contained in the document were proposed even before the recent, quite radical, employment law changes had come into effect. Even now, there has been no opportunity to measure the effects which these developments might still have on business efficiency or workplace relationships. There is, in particular, sufficient uncertainty and scope for dispute inherent in the flexible working rules, which came into effect in April 2003, to cause serious problems between employers and staff. The Government should, in our view, be cautious about introducing still more statutory rights for employees until a credible assessment has been made of the consequences, good and bad, of recent changes.

Secondly, in taking forward the agenda, the document fails to pay adequate attention to the circumstances of the SME community, which comprises 99% of all firms and which employs, in total, some 43% of the UK workforce. The assumption behind the paper seems to be that all employers will have the human and financial resources to cope with further extensions of employee rights. In the absence of a specific derogation from any new statutory rules for �small� employers, it is important that the Government takes into account their potential impact on employers of all sizes. The powers of adaptation of larger companies may not be available in the case of smaller firms.

Our comments on specific aspects of the paper are as follows:

The paper suggests that entry to the child-minding scheme should be extended to include people who are not already child-minders. Any extension of this kind should not lose track of the need for child-minders to be qualified and registered and supervised by local authorities. With this will come a cost.

We welcome the outline proposals to improve tax and NIC exemptions for employer-sponsored child care. Many parents find it an extremely difficult choice as to whether to leave their children in the care of others in order to go to work. The significant burden of the costs involved tends to be the final and decisive reason why so many parents give up their jobs and careers and decide to stay at home. Lone parents, in debating whether to return to work, face an even greater dilemma and we agree it is appropriate that they should receive additional assistance through the Tax Credits system.

While the Government has its own social agenda in seeking to expand the relief for employer-supported child care, many skills are lost to the UK economy due to inadequate and expensive child care provision. We consider that an expansion in employer-supported childcare will encourage more individuals to return to work by offering them a greater level of flexibility and giving them confidence that their children will be secure and well catered for. This would be helped further, for pre-school children, where the child care facilities are based at or close to workplace.

While we support the Government's policy objective in this matter, we consider that there should be no bias, through other tax measures, against those parents who make the sacrifice of staying at home to bring up their children. There are too many personal factors involved in this highly emotive area for the Government to seek to push individuals into embracing a �one size fits all� policy where going to work and sending the children to a child care "facility" is the norm.

The proposal is to allow parents to use their full parental leave entitlement (13 weeks) as one block at the end of maternity, paternity or adoption leave. We consider that introducing a statutory right to this effect would have the potential to cause problems with respect to key personnel who demanded the right to be absent from the workplace for, effectively, four months. It would be very difficult for many SMEs in particular to find cover for key personnel for this length of time. We would prefer any use of �block� parental leave to be subject to the employer�s express consent.

We acknowledge that there may be a special case for extending the period of paid paternity leave (but not the amount of pay itself) in the case of disabled children, but do not consider that cases of multiple births would in themselves justify additional rights.

We support the proposal to monitor the impact of these changes. A similar procedure must be effected with respect to the flexible working rules.

In summary, while we believe that the Government�s basic objective of encouraging mutually beneficial work-life balance has much to commend it, it should be careful not to risk creating a situation where employees� expectations as to their rights conflict with businesses� capacity to cope with those matters without detriment to their efficiency. This applies especially with regard to the application of the law to the SME community.

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