More maternity benefits "will cripple firms"

2005

The government's plans to woo women voters with extensions in maternity leave and further rights to request flexible working could cripple thousands of small firms, employers' groups have warned.

Under the proposals, maternity pay is set to be extended from six to nine months – and increase of £1,400 - by 2007 with fathers able to take over some of that leave for themselves.

Mothers are currently entitled to 90 per cent of their average earnings for the first six weeks after giving birth, followed by £102.80 a week until the baby is six months old.

In addition, the “right to request” flexible working, currently open to 3.7 million parents in Britain with children under six, is likely to be extended to all 4.5 million parents of school-age children and 1.8 million people who look after sick or disabled relatives.

But while the government claims that the bill for the increased maternity pay will fall to taxpayers rather than employers, the true cost of maternity leave is much greater.

According to David Frost, director-general of the British Chambers of Commerce: "While the majority of any salary costs may be covered by the government's statutory pay, recruitment costs, advertising costs, retraining costs and the strain on the company will not be."

A recent survey of BCC members revealed that eight out of 10 firms opposed any further extensions to maternity leave, with firms employing fewer than 50 people particularly unhappy with the proposals.

The legislation is also likely to further discourage some employers from hiring women at all. Already eight out of 10 HR professionals in Britain believe that bosses automatically think twice before employing women of childbearing age.

And at the same time, it will exacerbated the growing rift in workplaces between parents and non-parents, a group whose will feel increasingly discriminated against as they are expected to fill in the gap left by absent colleagues.

“The majority of British businesses are small firms who could be crippled by these moves to allow more time off,” David Frost warned.

"These new plans on flexible working and maternity and paternity pay will put more pressure on our firms. Small businesses who will feel this most, are already struggling under the mounting cost of regulations which our figures show is now at £39bn."

The Confederation of British Industry agreed: "If the right to request is extended to parents with children up to 17, that will cover millions more employees and it will be very difficult for small businesses in particular to accommodate all these requests for flexible work,” it said today.

"A key reason for the success of our economy over the last ten years has been flexibility, particularly in terms of the labour market. We need it to remain flexible, our firms cannot compete without it," David Frost added.

"Do we want a competitive economy or are we content to see employers struggle as their hands are tied behind their backs?"