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Call to reform maternity and paternity leave

The maternity and paternity leave system needs a major overhaul, according to a report from a leading business group.

The report, entitled Flexible Working: Small Business Solutions, has been drawn up by the Federation of Small Businesses (FSB).

The FSB said that maternity and paternity legislation should be changed in order to give smaller employers a greater degree of certainty over the return to work of employees following the leave period.

Research conducted by the FSB has revealed that maternity and paternity leave is one of the most complicated issues in the employment field, with a half of small businesses rating maternity leave very complex to administer.

While larger firms can rely on HR departments to handle the administrative burden of family leave, smaller businesses often find it difficult to plan and forecast when someone on maternity or paternity leave will return to work, the FSB continued.

At the moment, women are entitled to 52 weeks of maternity leave of which six weeks are paid at 90 per cent of salary and the remaining 33 weeks at the statutory pay of £124.88 a week.

Fathers can claim two weeks of paid leave at the statutory rate. Changes that are slated to come into effect next April would see fathers entitled to take six months of the mothers' paternity leave, although the new government has yet to confirm this will be the case.

To help smaller employers, the FSB has proposed a 'flexible leave' system in which parents would receive statutory leave pay for the pre-agreed time they wish to take off.

A mother who, for example, wants four months of maternity leave would take the time off and get the full statutory pay for it.

This arrangement, the FSB argued, would give the employer a clear sight of when employees will be back at work and would simplify the burdensome systems currently in place.

In addition, the FSB called for further changes to the system. These would include setting out a national definition of flexible working to provide clarity to small businesses and employers, and creating a bond to enable businesses to provide sustainable childcare for families.

John Walker, the FSB's national chairman, said: "Small businesses are known as the most flexible employers - often operating in a small team that runs like a tight-knit family. FSB research shows that 72 per cent of respondents have flexible working arrangements for their staff.

"Yet laws surrounding maternity and paternity leave are complex and confusing to administer and can act as a barrier to small firms taking on new staff simply because they do not understand the system."

Mr Walker went on to say that family leave should be tailored to suit each individual rather than imposed as a one size fits all approach.

He added: "Government must reform the way statutory pay is distributed to people taking maternity or paternity leave. Parents should be able to choose not only how long they take leave but how and when they receive the pay they are entitled to. In doing so small firms will have more clarity on when that invaluable and skilled member of staff will return to work."