Statutory Leave and UK Businesses

Directors and managers in UK businesses are well aware of the difficulties in dealing with the requirements in UK law to allow their employees to take statutory leave under certain circumstances. For example women are entitled to take maternity / adoption leave; those with over a years service can take up to 52 weeks leave when they have a baby or (for male employees also) adopt a child. Following this period of course, the employee in question then effectively has the right to go back to their old job (or a suitable alternative on no less favourable terms) which must be kept available for their return. The introduction of shared parental leave now also means that both parents can now share the 52 weeks leave between them.

Businesses have also had to absorb the requirement to allow parents parental leave of up to 18 weeks off (albeit unpaid) for each child and adopted child, up to their 18th birthday (restricted to 4 weeks for each child in a year). This can be activated with 21 days notice to the employer, and although it can be postponed by the employer for good business reasons for up to 6 months, it still eventually must be allowed if requested.

As well as these rights, fathers (or individuals adopting a child) are also able to take up to two weeks paternity leave.

It means that when you add in the contractual statutory minimum annual leave entitlement of 5.6 weeks per annum (that is 28 days for a worker working a 5 day week), and the entitlement to reasonable unpaid time off to deal with an emergency involving a dependant, it is possible for a small business to lose the services of a key worker – even a male one – continually for the best part of a whole year just based on their statutory leave entitlements.

Furthermore the Office of National Statistics published statistics published in 2017  showed that the average UK worker took 4.3 days per annum off through sickness. Of course this is an average and it is possible that any individual could have significantly longer off than this.

It is therefore entirely possible that in the year of the birth of their child, a business could easily lose the services of a key employee, male or female, for the best part of a whole year. So in a small / medium sized business, where perhaps there may be one or several virtually irreplaceable key employees who may single-handedly support an important area of the business, what can be done to minimise the potentially disastrous absence of these employees? Here are some suggested actions:

1. Businesses must make a careful risk assessment by identifying those positions within their organisation which are key positions and which if they were left absent for any significant length of time would damage the business.
2. For every key position it will be necessary to have a strategy to cover that position in the event that the individual goes out of the business for a prolonged period.
3. This strategy will vary depending on the post in question and the nature of the business, but could involve such things as:

• Having key jobs carefully described and defined with all the duties and responsibilities carefully catalogued so it is easier for a replacement to come in and undertake the role.
• Having a suitably trained ‘understudy’ (say a junior or apprentice) able to stand in and undertake all or most of the main duties. This is good succession planning anyway.
• Contracting with an agency to supply a suitably qualified and skilled individual when required. The agency could be asked to maintain a list of potentially suitable candidates within their database.
• Maintaining a personal relationship with an interim contractor who could step in at short notice. Similarly there may be a retired ex-employee experienced in the job who would be able to come back for a period of time when necessary
• Outsourcing the work to another organisation until the employee returns
• Agreeing with the key employee that they would undertake a certain amount of paid work during their absence.
• Having a plan to re-distribute the duties of the post around others in the current workforce.

All these leave arrangements are undoubtedly a potential burden on small businesses, and it is likely that they could be even further enhanced in due course, for example if the eligibility criteria become more relaxed or the pay on offer becomes more attractive through legislation.

All-in-all this should serve to remind Business Owners and managers of the need to plan more carefully for losing key employees. Addressing these issues before they become a problem could potentially go a long way to minimising the impact on the business further down the line.

(Revised March 2018)