Priority Improvements to Parental Leave
Recommendations
14. NACEW endorses parental leave as a key mechanism to support the work and care choices of families, and to protect the health and well-being of mothers and babies. Parental leave is an important component of a modern society and economy.
15. Parental leave and PPL recognise the reality that most parents of young children -75% of women and 88% of men aged between 20-44 - are in the labour force (Census 2006). It supports them to make their best choices around balancing paid work and care responsibilities. NACEW also considers that parental leave should support labour market participation in quality work, rather than participation per se.
16. Apart from Australia, which provides no statutory PPL at the federal level, most countries New Zealand compares itself with, and many of those with which we compete for skilled labour, provide between 14 and 20 weeks of paid leave at higher rates than that paid in New Zealand. Norway, Sweden, Denmark and Finland offer paid maternity leave for 30 to 64 weeks, as well as paid paternity leave.
17. A number of countries are strengthening statutory leave policies. The overall direction of change is towards increasing the flexibility of leave entitlements that support family transitions and extending and supporting fathers' access to parental leave. As an example, the United Kingdom (UK) expanded the period of maternity pay from six to nine months in April 2007, providing a new right of up to 26 weeks of additional paternity leave, which can be paid should the mother return to work, and extended the right to request flexible work.
18. The draft recommendations received almost universal endorsement from the 16 groups and individuals that responded to our consultation process. The draft recommendations, process followed, and responses received, are documented in the Appendix. The recommendations are discussed in detail below in order of priority.
Recommendation One: Widen the Eligibility Criteria
19. As a top priority, NACEW recommends that the eligibility criteria for PPL be widened to ensure coverage includes casual and seasonal workers and people with more than one job, as this group of workers falls within the population group the scheme is aiming to assist.
20. Widening the eligibility criteria would allow these workers, who have demonstrated workforce attachment, to access PPL. This is likely to be particularly beneficial to low income workers as the evaluation identified that low income workers were overrepresented amongst those mothers who were in work but did not qualify for paid leave. It would also enable the scheme to provide PPL to those mothers who work in casual and temporary jobs between bearing their first and subsequent child(ren). This, in turn, may help employers fill parental leave vacancies on a temporary basis.
21. This recommendation is widely supported by the groups and individuals who responded to our consultation. Rural Women New Zealand, in particular, drew attention to the low proportion of women in agriculture, horticulture and forestry currently eligible for PPL. However, Business New Zealand argued that if women with lesser labour force attachment became eligible for PPL then it may be preferable to decouple the payment from labour force participation and make the payment more like a benefit.
22. NACEW considers it important to include workforce attachment as a key eligibility criterion for PPL so that the scheme continues to support gender equity in the labour market. NACEW therefore supports the maintenance of the minimum labour force attachment requirement of an average of 10 hours work a week, but without the requirement for these hours to be linked to a single employer. NACEW also recommends allowing the hours worked to be averaged over a longer period to take account of transition times between jobs. The assessment for eligibility and payment level could therefore draw on any number of parallel or sequential jobs. Similar provisions already exist to enable junior doctors on rotation across several District Health Boards and teachers employed by multiple Boards of Trustees to add together their jobs to assess whether they meet the (six or 12 month) criteria for leave and payments.
23. NACEW does not, however, envisage obligations on the part of particular employers to keep a position open being expanded from the current criteria. This would mean that, in future, some PPL would be accessed by individuals who do not have a job being held for them. The UK has a similar payment, the Maternity Allowance, which is paid to women not qualifying for Statutory Maternity Pay, but who have been employed or self-employed for at least 26 of the 66 weeks before the expected birth date and have earned a specified minimum average weekly income. In New Zealand's case, NACEW sees it as preferable to widen the eligibility criteria for PPL, rather than setting up a separate system. It may, however, be more practical to capture eligibility through a minimum earnings specification rather than a minimum number of hours worked.
Recommendation Two: Longer PPL
24. NACEW recommends the length of PPL is increased to one year, with the PPL being increased to six months as an urgent priority, and then to increase the level of payment over time. This would: support child development; meet parents stated preferences to be able to take longer periods of leave than they can currently afford; support the labour market participation and care choices of parents; and provide a greater degree of income support for families during a period of significant transition. Increasing the level of payment would also encourage fathers to take more leave and better enable mothers to maintain their labour market attachment, and in turn, this would contribute to pay and employment equity for women.
25. There is considerable support for a longer period of PPL. International evidence on nutrition supports the Ministry of Health recommendation that infants should be breastfed exclusively up to six months of age. Continued breastfeeding is valuable as a complementary food source for up to two years or beyond. There is a growing body of evidence indicating that one to one parental care of babies pays dividends in terms of their physical, emotional and psychological development and that this may be the optimal care arrangement for most children and parents for the first year of the child's life.
26. The parental leave evaluation found that, on average, mothers returned to work after six month's leave but most wanted to return when their baby was 12 months old. The biggest barrier to taking a longer period of leave was financial. Mervyl McPherson's recent qualitative research for the Families Commission[1] similarly found from interviews with 40 mothers, that they generally believed that babies up to one year old are best cared for by their parents.
27. The vast majority of the groups and individuals who made submissions on our draft recommendations supported the extension of PPL to one year; the Women's Health Action Trust and Parents Centres NZ inc were strongly in support of at least one year's paid leave to facilitate ideal breast-feeding arrangements, and an individual submitter advocated extending leave to fit with the growing evidence on the developmental benefits.
28. Business New Zealand expressed concern over the impact of introducing longer leave at a period when skills are in short supply and on whether such extended leave would result in more mothers leaving the workforce, or extensive absences where parents had their children close together. For NACEW, these concerns highlight the importance of enabling fathers to share parental leave and therefore spread the leave taking across a wider range of workplaces and industries. This, in turn, will enable mothers and fathers to meet their aspirations for more shared parenting. Granting longer leave is likely to decrease the time some mothers spend in paid work (by making it viable for them to take longer leave) but increase the job retention of mothers who currently resign. We cannot tell what the net effect is likely to be from current data.
Recommendation Three: Paid Parental Leave for Fathers
29. NACEW recommends that there is a new PPL entitlement, separate to the entitlements for mothers (that can be shared), that is ring-fenced for fathers. This would support greater choice for parents and gender equity in the home. It would assist working fathers to take leave irrespective of whether the mother has an entitlement to PPL, and support fathers to be more involved in the early care of their children.
30. There is a sizeable gap between the aspirations of parents that fathers spend more time caring for their children[2], and the actual time fathers spend with their babies and children. The evaluation found fathers take an average of two weeks leave at the time of the birth of their child (typically annual leave) but would like to take four weeks leave instead. The evaluation also found that most mothers preferred to use the PPL themselves because it occurred during the first few months of a baby's life when health and bonding are critical considerations, and that this preference was supported by fathers.
31. Workplaces are less open to fathers taking parental leave in comparison to mothers. The evaluation found that fathers experienced workplaces being supportive about changed work patterns around the time of the birth, but not necessarily for longer term changes.
32. A forthcoming literature review notes that parental leave provisions by men are highest in countries such as Sweden, Norway and Denmark which have higher levels of PPL and leave that is allocated to fathers only. The authors of the study say such leave "sends a signal that paternal leave-taking is valued and encouraged" and that, in Norway, fathers' take-up of parental leave increased from 5% to 70% following implementation of the use-or-lose paternal leave policy.[3] The survey of fathers undertaken within the parental leave evaluation indicated that, if there was PPL specifically for fathers, half would take this up[4].
33. NACEW believes the time is right for action to enable men to more easily take PPL, and thereby progress the passage to greater gender equity at home and at work. Because of the reluctance of many employers to recognise fathers' parental leave aspirations, and because in many families fathers taking paid or unpaid leave entails a greater financial sacrifice, NACEW considers this leave must be ring-fenced to be effective, and believe that the policy reasons for this are sufficiently robust to justify a specific, gendered provision.
34. Over time, the financial disincentive to men taking PPL will reduce with the narrowing of the gender pay gap, and the gap between the level of PPL and work income. Social and workplace barriers will reduce as men taking PPL becomes more common.
Recommendation Four: "Keeping In Touch" Provisions
35. NACEW recommends that mothers and fathers are permitted to work for a limited number of days for their same employer while they are on PPL without losing their payment. This would enable these workers to, for example, complete a handover or to undertake training. This would make both the start of leave, and return to work, easier for both employers and employees to manage.
36. The UK's Keeping in Touch provisions, which enable parents on PPL to work up to 10 days whilst they are taking this leave, provide a useful model for developing such provisions in New Zealand. This number of days would provide enough time for parents to have an option to return to work for important training events, handovers, and planning sessions without being expected to do this for no pay, or forfeiting PPL. Employment for up to 10 days would be subject to a negotiated agreement between the employer and employee.
Recommendation Five: Flexible Leave
37. NACEW strongly supports more flexible options for taking parental leave and for enabling it to be taken on a part-time basis. The evaluation found that many mothers negotiated a return to work on a part-time or flexible basis with their employers. The extension of the period of PPL opens up the possibility of a phased return to full-time work, or the sharing of PPL between both parents; both of which could only occur if there are provisions for combining paid leave and paid work. In New Zealand, several surveys have identified that both mothers and fathers want more flexible work arrangements. Labour force participation is also likely to be higher with more flexibility in work arrangements.
38. NACEW has delayed making specific recommendations on what flexible leave arrangements might be in order for those arrangements to build from any decisions on the Employment Relations (Flexible Working Hours) Amendment Bill. We would, however, be keen to discuss this issue with you following decisions on the Bill.
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[1] McPherson, Mervyl (2006) New Zealand Cultural Norms of Parenting and Childcare and how these relate to Labour Force Participation Decisions and Requirements: Report of qualitative interviews with 40 mothers Families Commission , Blue Skies Fund 14/06
[2] Ministry of Social Development (2006) Work, Family and Parenting Study found that 92% of parents in the survey agreed that a father should be as much involved in the case of his children as the mother
[3] Gornick and Meyer (2003) Families that work. Policies for reconciling parenthood and employment, Russell Sage Foundation cited in EEO Trust, forthcoming, Men and Work-life Balance: A review
[4] Department of Labour (2007) Parental Leave in New Zealand: 2005/2006 Evaluation, May 2007, p61
