Annual leave entitlements are a major benefit. Until the introduction of the European Working Time Directive in 1998, there was no statutory obligation to offer any paid holiday except for the standard bank holidays. Employers are now obliged to offer a minimum of 20 days' paid holiday per year, including bank holidays. The entitlement for holiday begins to accrue on the first day at work.
In practice, most organizations have always offered annual leave well in excess of this minimum, with very few UK companies giving less than four weeks to employees at any level. Basic holiday entitlements are typically five weeks plus bank holidays, with some organizations offering up to six weeks for senior executives (who in practice may rarely have time to take full benefit of the provision) or on a service-related basis to more junior staff (although this may change as the government moves to outlaw age discrimination in the workplace, to comply with EU regulations).
Long entitlements may also be given in recognition of working unsociable hours or agreeing to flexible working practices. Some organizations specify minimum as well as maximum holidays, requiring employees to take one break of two weeks from their entitlement to ensure that they get away from work for at least one reasonably lengthy period a year. Many employers also need to specify when holidays can be taken, either to ensure that everybody is not off work at the same time when continuous working has to be maintained, or to ensure that everybody is off during an annual shutdown.
Granted when close relatives are ill, or die, or to deal with other unforeseen events, compassionate leave is normally the subject of formal policy in larger employers. It is usually paid leave for a limited period and unpaid for longer periods. This provision gives the opportunity for the organization to show concern for the individual and recognition of the importance of family responsibilities at times of personal hardship. Sensitivity in dealing with requests for compassionate leave, or offering it when it is clearly necessary, can do much for employee morale - not just for the employee concerned, but for the immediate work group who see that a colleague has been well treated at a time of personal crisis.
More women are active in the workforce, and a growing number of women choose to or have to return to work (either full or part time) after their babies are born. This reflects changing demographic patterns: the requirement for both partners to work to make ends meet where housing costs are high, the growing number of single-parent families and the fact that more women (particularly professionals) are starting families later with no intention of breaking their career. Recent surveys show that just over half of all women with pre-school children are in some form of paid employment. The nuclear family with a wife at home is a reality for only a small proportion of the population and, for better or worse, a diminishing one.
All female employees are entitled to 26 weeks' 'ordinary' maternity leave, with the right to return to work on the same terms and conditions that applied before the leave, irrespective of service, hours worked, status of employment and size of the workforce. Female employees with at least 26 weeks of continuous employment by the beginning of the 14th week before the expected week of childbirth (EWC) are entitled to 26 weeks' additional maternity leave, which begins at the end of ordinary maternity leave.
Women entitled to additional maternity leave are also entitled to receive Statutory Maternity Pay (SMP) during ordinary maternity leave, providing average weekly earnings are equal to the lower earnings limit for national insurance contributions and that sufficient notice is given. SMP is paid by the employer for 6 weeks at 90 per cent of average weekly earnings and 20 weeks at the lesser of the SMP standard rate (£100 per week as at April 2003) and 90 per cent of average weekly earnings. Women not eligible for SMP may qualify for the Maternity Allowance paid by the social security office. SMP is paid whether or not the employee intends to return to work after the birth.
A woman has the statutory right to continue to benefit from all contractual terms and conditions of employment during the period of ordinary maternity leave, except for wages or salary. Contractual benefits could include annual leave, public holidays missed (where the contract states that public holidays are additional to the basic leave allocation), company car and mobile phone (unless for business use only), professional subscriptions, participation in share schemes, medical, life and disability insurance and company contributions to pension schemes (which must be calculated as if the employee was working normally).
There remains an area of uncertainty around profit share, bonus, incentive and commission payments. Whether payments should be made under such schemes will depend on the type of scheme, whether the scheme is included in the employment contract, and the terms and conditions of the specific scheme. Whatever the conclusion regarding a particular scheme, organizations should take care to ensure a consistent approach between employees taking the various kinds of leave - maternity, paternity, parental and adoption leave.
There is no statutory right for these benefits to continue during additional maternity leave, with the exception of annual leave. This must continue to accrue as per the Working Time Directive, which entitles employees to four weeks' paid leave each year.
It should be noted that these are the current statutory minimum requirements. Many organizations offer enhanced maternity arrangements, such as offering full wages or salary for longer than the first 6 weeks (one engineering company has been reported as offering 52 weeks on full pay, in an effort to attract more female employees), full benefits for the period of additional maternity leave or the right to add parental leave to the end of the maternity leave period.
Where employers find that they employ large numbers of women and are dependent on their skills, generous maternity leave provisions can help with long-term recruitment and retention. It can also be a very useful and cost-effective policy in areas of professional skill shortage, enabling employers to attract qualified women (providing this is achieved without infringing the sex discrimination legislation).
In April 2003, the UK introduced a statutory right to paid paternity leave. An employee is eligible for paternity leave if he expects to have responsibility for the upbringing of the baby, and is either the baby's biological father and/or the mother's husband or partner (someone who lives with the mother in an enduring family relationship). It should be noted that a female in a same-sex relationship may be eligible for paternity leave, and terms such as 'father', 'he', 'him' and 'his' should be taken as including those females who qualify.
Fathers who have been continuously employed within an organization for at least 26 weeks ending with the 15th week before the EWC are eligible for 2 weeks' paid leave on the birth or adoption of a child. Paternity leave can be taken as a two-week block, or in two one-week blocks, and has to be completed within a period of 56 days beginning on the date on which the child is born or placed for adoption.
To be eligible for Statutory Paternity Pay (SPP), the father must have average weekly earnings that are at least equal to the lower earnings limit for national insurance contributions. SPP is paid for two weeks, and is the same as the standard rate of SMP (the lesser of £100 per week (as at April 2003) and 90 per cent of average weekly earnings). As with ordinary maternity leave, all contractual terms and conditions of employment continue through paternity leave.
Again, many employers offer more generous paternity leave provisions. The 2003 Hay Group Survey of Employee Benefits found that over 60 per cent of organizations grant between 1 and 10 days' fully paid paternity leave, with most offering 3 or 5 days. IDS surveys have drawn similar conclusions.
The Parental and Maternity Leave Regulations came into force on 15 December 1999. All parents of children under the age of five with more than one year's service are entitled to 13 weeks of unpaid 'parental leave' for each child (so parents of twins get 26 weeks), or 18 weeks for parents of disabled children. A parent with less than one year's service becomes entitled to parental leave after one year's service has been completed. The leave must be taken before the child's fifth birthday, unless the child is disabled or adopted. Parents of disabled children have until the 18th birthday to take the leave, while parents of adopted children must take the leave within five years of adoption or before the 18th birthday, if earlier.
Employees are guaranteed to get the same job back if they take a block of leave of four weeks or less, or the same or a similar job for longer blocks of leave. A similar job must offer the same or better terms and conditions (including pay). Employers report low levels of take-up of parental leave, primarily because it is unpaid.
There is a 'default agreement', which covers all companies that do not have their own leave arrangements. Under this default scheme, parents must give 21 days' notice of their intention to take parental leave (except when it is to be taken immediately after the birth or at the end of maternity leave), can take up to four weeks' leave per year, and the employer can postpone the leave, once, for up to six months (again, except when it is to be taken immediately after the birth or at the end of maternity leave).
New regulations have also made adoption leave available from April 2003, to an adoptive parent (whether married or not) who is matched with a child under the age of 18 by an approved adoption agency that provides the employee with a certificate supporting the entitlement to leave. Leave periods and payments are similar to maternity leave, except that all paid leave will be at the standard rate of SMP, being the lower of £100 per week (as at April 2003) and 90 per cent of average weekly earnings.
A growing number of major UK employers are providing for employees (both men and women) to take up to five years off to rear children. People taking breaks are usually brought in regularly to keep up to date with developments both in their skills area and the organization in general and are entitled to return full or part time to work with no loss of job status.
Although sabbaticals are a comparatively rare benefit in the UK, they can be a useful retention factor for professionals able to use the time to travel and update their knowledge. They may also be granted to long-serving employees either as straight leave or as time to get involved in something of value to the community. There is no set pattern to the length of leave given - it varies from a few weeks up to a year.
Some UK organizations have been highly imaginative in offering leave to suit employees' changing needs. For example:
§ IVF leave: five days' paid leave for women undergoing IVF treatment, and one and a half days for their partners;
§ Benidorm leave: up to three months' unpaid leave, with no loss of service, for employees who wish to take advantage of long 'winter-sun' holidays;
§ finance leave: employees can take one day per year to manage personal finances, through an intranet site and in-house seminars, or by visiting their financial planner, bank or building society;
§ Christmas leave: a half-day to 'chill out' in the pre-Christmas rush (or do the Christmas shopping); or
§ volunteer leave: six days' paid leave to work on charitable community ventures.
In order to attract or retain employees with young dependent children, employers can offer financial or practical childcare provisions. For example, companies such as the HSBC are providing workplace nurseries or crèches. Although expensive to provide, such arrangements work well where travel with a child to the workplace is relatively easy. They can pose problems where parents reject the idea of commuting with a toddler in the rush hour. Cash payments or childcare vouchers are also now being offered by a growing number of organizations to offset employee costs for childminders, nannies, or after-school babysitters.
Practical or financial help in finding, recruiting and retaining childcare providers may be welcomed. For instance, arranging a 'nanny share' for two or three employees; retainer payments for childminders for part- time workers.
Other types of provision, such as flexible hours or help with transport, can ease practical problems for employee and employer, and be perceived as a benefit.
Many larger employers now provide a series of lectures and an information pack for employees nearing retirement. The areas typically covered are:
§ personal financial planning;
§ managing increased leisure time;
§ health in retirement;
§ local sources of information and advice.
Top executives and other higher rate tax payers are not always as effective as they might be in organizing their own personal financial planning. Even finance directors able to work wonders with corporate financial policy may have little time or inclination to deal properly with family financial matters. To help with this problem and provide the necessary specialist advice, many major employers offer senior executives the chance to go to independent advisers for personal financial counselling. This should be provided by fee-charging advisers who are not going to benefit from the sale of particular financial products, ie those who typically return commissions to either the company or the individual executive where commission-earning products are bought on recommendation. The advice given usually covers areas such as:
§ making a will;
§ inheritance and other planning;
§ provisions for dependants;
§ savings and investment strategy;
§ finance and property;
§ planning for school fees;
§ trusts and covenants;
§ tax planning.
Advice is generally provided on a one-to-one basis once the executive has produced an inventory of his or her personal financial situation under guidance. The position is usually reviewed regularly to take account of changed personal circumstances. Companies may also offer this service to widows and widowers of employees to help them plan how best to make use of death-in-service benefits and take stock of the financial situation in which they have been left. Given that many widows of an older generation may have little idea about financial management, this can be a valuable and much-needed benefit.
Traditionally provided as part of company 'welfare' services, a new generation of personal counselling services (EAPs or Employee Assistance Programmes) has grown up among major employers. Their purpose is to help employees deal with the traumas of bereavement, divorce, elder care, alcoholism and the spectre of AIDS. Larger employers typically provide specially trained 'in-house' counsellors on a confidential basis or an outsourced counselling service. Others provide a referral service to counsellors in the community, eg Relate, Alcoholics Anonymous, etc.
Most employers recognize that work is also a social institution. They therefore try to provide at least some leisure activities so that colleagues can meet together outside working hours. Depending on the size, location and culture of the organization, provisions vary considerably. It may be entirely appropriate to negotiate favourable membership terms at nearby health and sports clubs. Whatever the circumstances, providing a social focus can have beneficial effects on the organization's culture (eg assisting team building) and should therefore be regularly reviewed as part of the remuneration package. It can certainly be a retention factor where staff are difficult to find and keep.
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