Minutes of Evidence 27 June 2002

Committee for Employment and Learning

Thursday 27 June 2002

MINUTES OF EVIDENCE

Employment Bill:
Committee Stage
(NIA 11/01)

Members present:

Dr Birnie (Chairperson)
Mr Carrick (Deputy Chairperson)
Mr Adamson
Mr Dallat
Mr Hilditch
Mr R Hutchinson

Witnesses:

Mr R Gamble )
Mr W Caldwell ) Department for
Ms L Taylor ) Employment and Learning

The Chairperson: I welcome Mr Roy Gamble, assistant secretary of the Employment Right and New Deal Division; Mr William Caldwell, leader of the Employment Bill team; and Ms Lynn Taylor, also from that team. I understand that you wish to talk us through groups of clauses, after which you will take questions.

Mr Gamble: We agreed with the Clerk that that would probably be the most sensible approach. The clauses have been grouped together. Clauses 1 and 4 are about adoption leave and pay, and clauses 2 and 3 cover paternity leave and so on. I shall go straight into the content of the clauses.

Clause 1 establishes a new right to what are called ordinary adoption leave and additional adoption leave. They provide recognition of the role played by adoptive parents in improving the chances of children who have, in many cases, been disadvantaged in some way. It is intended to give adoptive parents a right to a total entitlement of up to one year's adoption leave, allowing them time to care for a new child and build new relationships. The idea is to enable them to take time off during the crucial months following the arrival of a child, thereby reducing the number of adoption placements that go wrong and are disrupted. The ordinary and additional adoption leave right will apply to children adopted from abroad as well as from inside Northern Ireland. The clause also covers the rights of parents while on adoption leave and when they return to work.

Many of the features will be in Regulations. For example, the length of ordinary adoption leave will appear in Regulations to be made later this year, after the Bill is enacted by the Assembly. The intention is 26 weeks' paid ordinary leave followed by 26 weeks' additional leave at the discretion of the adoptive parent. If they wish to take that additional leave, it would be unpaid. There are also details of what notification must be given to employers, and which of the adoptive parents, the male or the female, can take the adoption leave - indeed, sometimes it is a single-sex couple.

The Chairperson: That is an interesting point. It is transferable, and not specified.

Mr Gamble: For example, if a married couple were adopting, the male might decide to take adoption leave of six months if the wife were better paid. The loss of income would be less if he took time off. Broadly, that is the intended entitlement to leave.

Clause 2 deals with payment for the leave. As I said, the first 26 weeks would be payable. The rate currently intended, which will be specified in the Regulations, is £100 a week - the same rate as statutory maternity pay - or 90% of average pay if that happens to be lower. Some kind of threshold will apply to people earning under a certain amount. They will not be eligible for statutory adoption pay, which also reflects maternity arrangements.

Mr Carrick: There is reference in the Bill to excluding existing foster carers. Is there any specific reason why they should be excluded if they wish to adopt?

Mr Gamble: They would not be excluded if they wished to adopt. They are only excluded in relation to their existing foster arrangements.

Mr Carrick: Is that what the Bill says?

Mr Gamble: I have misunderstood you. If they are already fostering a child and wish to adopt that child, they are excluded, since the purpose is to give people a chance to form a relationship with a newly adopted child. With a child who has already been fostered for some time, the assumption is that the relationship must already exist. If that is to be changed into an adoption arrangement, there is no need to build that relationship, since there has been time to do so during the fostering phase.

Mr Carrick: If foster parents wished to adopt an additional child, would being foster parents exclude them from qualifying for the newly adopted child?

Mr Gamble: No, that is what I initially understood as your question. The purpose is to allow a new relationship to be established. If someone is already fostering a child and is then adopting another child, they will be eligible for paid leave.

Mr Carrick: The wording would not disqualify them because they are already foster parents?

Mr Gamble: Those matters will be spelt out in detail. The Bill provides a general framework, and much will have to be put in the Regulations. However, we hope that will be clear.

Mr Carrick: Unmarried partners or cohabitees who adopt children are covered by the proposals. How would that be monitored? Is it open to abuse?

Mr Gamble: That is a good question. The authorities and adoption agencies regulating placements ensure, to the best of their ability, that such abuse does not happen, and that those chosen are suitable. The Bill deals with the situation afterwards, rather than with the suitability of adoptive parents. It concerns paid time off once a placement is arranged. It is up to the relevant authorities and agencies dealing with the adoption to ensure that adoptive parents are suitable and appropriate.

Mr Caldwell: As Mr Gamble says, adoptive parents must satisfy certain criteria, and the Inland Revenue also has a function. It may carry out routine checks if anyone attempts to obtain any benefit or pay to which he or she is not entitled. First, people must satisfy the criteria to become adoptive parents. Secondly, the Inland Revenue may carry out routine checks from time to time.

Mr Carrick: That is reassuring. I can envisage circumstances, when relying on an agency's definition of an adoption, where that adoption might be somewhat tenuous. I am glad that the Inland Revenue, albeit not in every case, carries out further checks to see that the conditions have been met. In the light of recent court decisions and legislation, does this just apply to heterosexual couples, or does it include people of the same sex?

Mr Caldwell: Theoretically, it is possible for two people of the same sex to avail of this. That is with the caveat that to obtain a child for adoption in the first instance, the individuals have to satisfy the particular requirements of the agency or authority that is responsible for that aspect of social policy.

Mr Hilditch: In your introductory comments, Mr Gamble, were you saying that inter-country adoption is not an issue now?

Mr Gamble: No. It was mentioned in the Second Stage debate, and our understanding is that there would be no difference. There is no intention in the Regulations to discriminate between children adopted from abroad and children adopted in Great Britain or Northern Ireland, on the principle that there is no reason to discriminate against the child in that way. More time would be needed to establish a relationship with a child from abroad.

Mr Hilditch: That is certainly the case. I have dealt with some of those cases in my constituency, and the adoptive parents have to endure a great deal.

Dr Adamson: How does the Department intend to guard against disadvantaging other employees during the adoption leave-related absences, for example, where the workload is increased or the flexibility to take leave is reduced?

Mr Gamble: That is a difficult issue. The Department does not intend to do anything directly, except perhaps to try to give good guidance to ensure that employers take account of the fact that they may be putting more pressure on those remaining in the workplace. Employers might need to take on temporary replacements, and undoubtedly there will be costs for employers. The Department can give advice, or hints on good practice, but would not be thinking of compensating employers.

Mr Carrick: You have said that there will be costs, and I know that small businesses will be reimbursed. However, the Federation of Small Businesses has given evidence to the Committee that outlined the volume of administrative work that has to be undertaken. They used the term "unpaid tax collectors".

The Department is also responsible for employment in general terms - the securing and maintaining of jobs. We have a small business economy in Northern Ireland. The percentage of National Insurance contributions is paltry and will not offset the additional costs that small employers incur. Does that concern the Department?

Mr Gamble: It is obviously of some concern, but we do not expect a vast uptake of adoption leave. The figures show that one might expect about 100 cases a year in Northern Ireland. That will not fall as a heavy burden on the economy, although individual employers may feel the pinch. Small employers will not have to pay any of the statutory pay. That will be reimbursed, plus a little more. Employers may incur other costs. There are always trade-offs when dealing with such matters, and there may be a cost for offering a benefit. However, an employer may have a good employee whom they wish to retain, and instead of the employee having to resign and the company having to recruit another person, the employer will get the employee back in six months' time.

Mr Carrick: I understand the principle, but if a key worker is off for six months to a year, the company will have to train a replacement, which costs money.

The Chairperson: I want to return to an important point that has been raised before in the Committee about adoption of children from overseas. I think that the relevant article in the Bill refers to a person with whom a child is, or is expected to be, placed for adoption under the law of any part of the United Kingdom. I do not know enough about this subject. Is it conceivable that people living here could adopt a child according to the law of another state - presumably the state from which the child comes - and therefore this article would rule them out?

Mr Caldwell: No. It is more a case of the law of the United Kingdom being such that if a person is accepted to be adopted from outside the UK, they would be included.

The Chairperson: Are you confident that it will be interpreted in the way that you have explained, and not in the way that I understood it?

Mr Caldwell: Yes. The draftsman was given the instructions to include people from outside the UK, so I bow to his knowledge.

The Chairperson: Clauses 1 and 4 of the Bill mention employees. Why could the Bill not be drafted to include self-employed persons?

Mr Gamble: Work is ongoing to consider the question of employee status, and I do not claim expertise in this matter. Apparently it is very complicated and includes people such as agency workers. There are a variety of employment relationships, including self-employed people. The Bill is deliberately restricted to employees because there is a clear employer/employee relationship. It is difficult to see why a self-employed person would need to be given the right to take adoption or parental leave.

The Chairperson: Employees of companies receive pay during such leave.

Mr Gamble: Self-employed people would not be eligible for pay during the time that they took off. Broadly speaking, the taxation system is said to be slanted or weighted so that self-employed people get a reasonable deal from the taxman and should be able to make arrangements for leave because of that. There is little reason why the state should pay self-employed people to take time off from their own business.

The Chairperson: Admittedly, we are entering into a broader philosophical or ideological area. If the principle of some form of paid maternity, paternity or adoption leave is accepted and applied to employees, equity would make me ask why the self-employed or those other groups that have been mentioned should be excluded? I declare an interest as my wife is semi-self-employed, but that is not the only reason why I ask that question.

Mr Carrick: I must declare an interest too as my wife is self-employed. However, there are hundreds of self-employed people who would challenge your assertion that they are in some way better off than the employed. The taxation system is designed to be fair, though there may well be people who exploit it in some way. The whole definition of employee is hinged on the master/ servant relationship, and that ought to be the definition. However, as the Chairperson said, I do not see why we should discriminate against the self-employed. Many self-employed people operate away from their home; they lose out by staying at home and need to be compensated, just like an employee. We are being discriminatory.

Mr Gamble: I have tried to put across the Inland Revenue's line that the taxation system tries to be fair to the self-employed and recognises their risks and special circumstances.

Mr Carrick: Working on personal taxation for 35 years on the other side of the counter for the Inland Revenue, I never encountered that approach.

Mr Dallat: Can we expect a rash of applications for private limited companies, which would make self- employed people employees, to deal with the problem that you are talking about? That is the solution to the problem.

Mr Gamble: You are asking me to speculate, and I do not know.

Mr Dallat: If anyone commits fraud in claiming statutory adoption pay the maximum penalty is £3,000, but with statutory paternity pay, it is £300.

Mr Gamble: Which clause are we discussing?

The Chairperson: We are going through the Bill clause-by-clause; clauses 1 and 4 were combined. What clause are you referring to?

Mr Dallat: Clause 11.

The Chairperson: Clause 11 is relevant at this point. There is a discrepancy in that one penalty is ten times higher than the other, which seems strange. Why is that?

Mr Gamble: Statutory adoption pay can go on for 26 weeks, and you can get a maximum of £2,500 from that. You can get a maximum of £200 from the other.

Mr Dallat: That is a fair answer.

The Chairperson: That makes sense. We will move on to the next set of clauses.

Mr Gamble: We will take clauses 2 and 3 together because they deal with paternity leave and pay. As with clause 1, clause 2 establishes a new right. It allows fathers, or in some cases females, to take two weeks leave around the time of the child's birth. The Regulations will set out the detail of that. However, the proposal would be that paternity leave would consist of two weeks, to be taken in a single block, or one week if the employee wishes to take only one week. As with adoption pay, paternity pay, which is attached to the leave, is a part-income replacement. It does not replace people's wages, just assists. Therefore some people may choose to take one week, and if they take two weeks, it must be in one block. The Regulations will also state that leave should be taken within 56 days, or eight weeks, of the birth. Giving notice to the employer will be included, and employees must have 26 weeks of service with the employer before they qualify for paternity leave.

The point is that fathers want an opportunity to be more involved around the time of the birth, and to give some assistance to the mother during that difficult period. Currently a lot of people get time off - either they are given time off by their employers, or in some cases they take sick leave. The Bill is recognising a societal move, and there are benefits that may come out of that, such as better relationships established from the breathing space around, what often is, a difficult time. The Regulations will state most of the detail about amounts of time and pay. However, it is the same sort of intention as with adoption pay - £100 a week or 90% at the lower limit.

Mr Dallat: You referred to some employees taking sick leave, and there are circumstances where employers and employees agree this, if, for example, the mother is suffering from post-natal depression or the child is born with some incurable disease. The higher up the profession, the more likely that flexibility would apply, and no one criticises that. However, it is more difficult to do that at the lower end of the employment scale. Why is there nothing in the Bill to give rights to people in very difficult circumstances?

Mr Gamble: The Bill gives people the right to paternity leave, and, currently, that does not exist.

Mr Dallat: Yes, but there may be special circumstances in which the length of time is not sufficient to deal with crises, and there is nothing in the Bill to give extended paternity leave.

Mr Gamble: Two weeks was the period agreed, and it seemed to be acceptable in the consultation. It is attempting to achieve a balance between employers and employees. Since last year or the year before, another right exists for people to have unpaid parental leave, as opposed to paternal leave, for up to four weeks in any year, and for 13 weeks over a period of five years. People can have time off in those circumstances, and many employers would take a humane view about that. The Bill is trying to deal with the creation of a general right for people in ordinary circumstances. It is not trying to deal with the extraordinary.

Dr Adamson: Why is there a service qualification requirement for paternity leave when no such requirement is needed for maternity leave? This is something that came out of our discussions with the Irish Congress of Trade Unions (ICTU).

Mr Gamble: That has to do with physiology, and also the law requires women to be off work during pregnancy and birth. There are physical dangers and health and safety matters requiring women to be off work at an early stage, and those things do not apply for men. Employers should not have to make special arrangements for an employee who starts work one week and then says the next week, "Sorry, my wife is pregnant and I want to take two weeks off." It would be a sign of the relationship between the employer and employee. Women have less room for manoeuvre.

Dr Adamson: Some men seem to go through the full rigours of pregnancy.

Mr Hilditch: Will the Department provide any guidance, advice, or help to employers to cover the statutory paternity pay absences, specifically in relation to paid/non-paid overtime and loss of productivity?

Mr Gamble: Sorry, are you suggesting that the Department should make payments to employers?

Mr Hilditch: Will it give guidance or any sort of help?

Mr Gamble: The Department will ensure that people understand the provisions. The Inland Revenue and the Department will issue guidance on how to ensure payments are made and recovered properly by the business. There will be some losses if staff cannot be replaced for two weeks, and it is probably unlikely that they will be replaced. The business would have to try to get around that.

Mr Caldwell: The Department will be working closely with the Inland Revenue to ensure that whatever guidance is prepared embraces Northern Ireland's position. The Inland Revenue will be producing information on its web site and will be making direct contact with those who pay employers National Insurance contributions. It is to be hoped that adequate guidance will be prepared before the Bill comes into effect.

Mr Carrick: I do not want to go over old ground, but the same thing applies here, as for adoption, for agency workers and the self-employed. Do New Deal participants qualify? I assume that statutory paternity pay will be aggregated with an individual's income and will be subject to income tax and National Insurance in the same way as statutory sick pay.

Mr Caldwell: I imagine that it would be aggregated with their income. The broad rule is that New Deal participants are required to have 26 weeks' continuous service. They may well be eligible following that period.

Mr Carrick: Will you clarify that?

Mr Gamble: It is unlikely that that could be the case because New Deal is a 26-week programme. There are many elements to it, but only one of them is an element in which the New Deal participant is an employee. Other elements are when they are in full-time education or one of the other options. New Deal finishes after 26 weeks, so an employee could not give an employer notice after 15 weeks that he is going to take paternity leave because he would not be with that employer then. If he got a permanent job with that employer or established a record with a new employer, service as an employee would count.

Mr Carrick: This is another sector that could be discriminated against.

Mr Gamble: Unless you think that 26 weeks is discriminating against people. The feeling is that there needs to be a qualifying period that accepts that the employer has responsibilities for people with whom he has a relationship, but not with people with whom he has worked for two weeks.

Mr Carrick: If a person on New Deal gets a permanent job with that employer, or another employer, after the 26 weeks, do those weeks count as continuous employment?

Mr Gamble: Those weeks would count if they were with the same employer.

Mr Carrick: Would they count if the New Deal person gained employment with another employer?

Mr Gamble: Those weeks would not count if anyone changed jobs, never mind someone on New Deal.

Mr Carrick: Therefore it is not 26 weeks' continuous employment, but it is 26 weeks with the same employer. Is there a good reason for that?

Mr Gamble: The reason is disruption to the employer. We have recognised that it imposes difficulties in costs for employers.

Mr Carrick: For continuity, we have the same system with income tax. People can transfer, through their P45, for income tax and National Insurance purposes. They still qualify for statutory sick pay even though they change employers. It is not necessarily that people have the one employer; it is the service that matters.

Mr Caldwell: One of the differences may be that this is viewed as an employment right as opposed to a social security right.

Mr Gamble: This is not a social security right - if you are sick, you receive sickness benefit. However, you do not have to take statutory paternity leave unless you want to take it. In most cases it will cost employees something if they take statutory paternity leave because they will get only £100 a week. They do not have to take it if they do not want to, or they can take one week instead of two. This is not a social security benefit in the same way as statutory sick pay. It is also different from paying your income tax on transfer.

Mr Carrick: Will that be taxable if it is not a benefit? It may not be aggregated with your income. There seems to be a grey area here that needs to be investigated.

Mr Gamble: I do not know the answer to that, and we will check that. The Bill is quite complex. It proposes to tie in the tax and social security systems into employment rights concerned with leave and pay. I do not claim to be fully conversant with all the alternatives for the tax and social security systems, but I am sure that the Inland Revenue will know what it intends to do about the £100 per week.

Clauses 5 to 7 relate to financial arrangements, funding and payment. Clause 5 details the financial arrangements that will apply to both adoption and paternity pay. The clause covers where the money will come from that will ultimately be paid to the new parents and cover the Inland Revenue's costs in administering the scheme. To bring that about, the clause will amend the relevant social security legislation that makes the same provision for statutory maternity pay. The clause details how Government will fund payments. The Consolidated Fund will reimburse the National Insurance fund for moneys paid out under both forms of new statutory pay. Essentially, it is a technical Government finance clause that the user of those statutory arrangements will never know, or need to know, about.

Mr Dallat: What happens if an employer is really mean and just does not pay?

Mr Gamble: We will cover that later, but if he does not pay he will be subject to penalties. If an employer fraudulently claims to have paid, that would also be subject to penalties. If it were sufficiently serious, it could lead to criminal proceedings. There will be penalties, both for people wrongly claiming and for people failing to pay. There will also be penalties for failing to keep records that allow the Inland Revenue to determine whether individual employers are administering the scheme properly.

Mr Dallat: Keeping records is, historically, one of the biggest problems faced by employees. There are difficulties in getting even a basic wage slip.

Mr Gamble: Much of that administrative work is now done on computer packages for processing wages. Although many smaller firms probably do not have such facilities, records must still be kept. It is not intended that records should be voluminous, but they must be sufficient to determine whether employees were off work, whether they were paid what they were due and whether the claim that is made to the Inland Revenue for reimbursement is proper.

It will be possible on occasion for some firms to claim in advance if they know when payments are due. Rather than taking money out of their cash flow, firms will be able to ask the Inland Revenue to give it to them up front.

Mr Dallat: What happens if an employer goes bankrupt, disappears or moonlights?

Mr Gamble: In that case the Inland Revenue will pay up.

Mr Carrick: Is there any onus on employers to establish the validity of the claim, or do they simply accept any documentation at face value?

Mr Gamble: All that will be spelt out more fully in the Regulations, but the intention is that the process would not be onerous; the employee would self-certify that he intended to take paternity leave at some time. He would have to give some notice about when his partner is due to give birth and that he intends to take one or two weeks' paternity leave some time in the eight weeks after the birth. There is not much likelihood of people claiming that they are having children when they are not.

Mr Carrick: Your faith in humanity is greater than mine.

Mr Gamble: The claim will have to be certified, and it can then be checked.

Ms Taylor: I hope that an employer in a small business would be close enough to his staff to realise who is being honest; there is scope to check if you have any reason to doubt.

Mr Carrick: Or whistle-blow.

Mr Gamble: Statutory employment pay is not free; it will probably cost people money because they are taking a pay reduction and having a proportion of that pay made up by statutory employment pay. If their employer pays them at the standard rate when they are off, they are not entitled to statutory employment pay.

The usual checks will be made, and whatever people say must be confirmed. However, the incentives may be greater for employers who try to claim that they have made payments when they have not.

Mr Carrick: It would be interesting to see where the birth rates will rise during the next World Cup.

The Chairperson: Yes, that is an interesting thought.

Mr Gamble: Especially for the second two weeks.

The next group of clauses are about resolving problems, requiring information and inflicting penalties where fraud has been committed, as well as penalties for failure to supply information and so on.

Clause 8 is about resolving disputes, including those concerning a person's entitlement to paternity or adoption pay, the amount that the employer should expect to recover, and disputes over the employer's calculation of average weekly earnings, for example, in cases in which the employee is entitled to 90% of weekly earnings. The hope is that most disputes will be resolved in the workplace by discussion and if necessary, there could be some form of arbitration or mediation to deal with such problems. Ultimately, the Inland Revenue could make formal decisions about employees' and employers' rights, and there would also be a right of appeal against those decisions.

Clause 8, therefore, is broadly concerned with disputes about entitlement, whether the calculations are correct, and how much the employer should be able to reclaim. It is to be hoped that those matters can be resolved easily; if not, there is a right of appeal. It is a standard type of clause to deal with matters involving the Inland Revenue's right to inspect people who are making claims, and to take decisions.

Clause 9 deals with the powers of the Inland Revenue to require information. Most people comply voluntarily, but if they do not, the Inland Revenue will have powers to require people to produce records. They will deal with cases in which employers or claimants of paternity benefit are unwilling to provide the necessary information. That is a standard clause that appears in other tax contexts, such as tax credits. The information asked for must be reasonably requested and relevant. The Inland Revenue cannot ask for mountains of information. That will be set out in Regulations that will have to be agreed with the board of the Inland Revenue before they can be brought to the Assembly. The Assembly will have an opportunity to consider all the Regulations before they come into force.

Clause 10 is concerned with failure to comply and the related penalties for that. We have already had some discussion about that matter. The penalties that we talked about would not be imposed very often, because most people comply with the requirements. In case they do not, however, the penalties range from £300 to £3,000, and cover negligence and fraud.

The other clauses deal with failure to comply. Clause 11 is a standard clause concerning the penalties for fraud and incorrect payments. The maximum penalty would be moderated according to the seriousness of the fault. Some people might face criminal proceedings rather than civil penalties. Those are standard measures that the Department will take to ensure that the system works and is not abused and that people provide the information that is needed for the system to work, to be monitored properly, and so forth.

Mr Carrick: Essentially, the Inland Revenue will administer the scheme and enforce compliance. It will use its authority to do so. It has wide-ranging powers.

Mr Caldwell: Clause 12 is a technical clause that is required for specific circumstances that may arise. It is about rights during and after maternity leave. It enables provision to be made for situations that arise from the extension of maternity leave, and for potential combinations of ordinary maternity leave with other new types of leave, such as adoption leave. Although those situations do not arise at present, they might do so in a minority of cases when the length of maternity leave is extended to one year, and when new rights to adoption and paternity leave come into operation. That will be dealt with by subordinate legislation and Regulations will set out the contractual benefits and rights to return that will apply in specific circumstances.

The Chairperson: Can you clarify what would happen in the following hypothetical case, which the Committee will forward in writing to the Department? I apologise for the length of question - I am not sure who thought it up.

A woman who is on maternity leave, having had a baby, conceives three months into her paid maternity leave. She continues on maternity leave (a further three months on paid leave and six month on unpaid leave). Her period of unpaid leave ends around the time of the birth of her subsequent child. What rights would she have regarding maternity leave and pay at that point?

That is a convoluted, hypothetical case. However, it is a possible scenario. What would happen in that combination of events?

Mr Caldwell: I hesitate to attempt to answer that question. That particular hypothetical case would require thought and calculation.

Mr Gamble: It seems as though the woman would begin a new period of maternity leave of up to 26 weeks. However, all circumstances would have to be considered.

The Chairperson: The question is whether the qualifying period is worked out only once for an employer, but covers a woman for any subsequent periods of maternity leave, even though she has not served another period of 26 weeks' work between pregnancies. Can you see what I mean? I may not have explained it well.

Ms Taylor: That is my understanding of the situation. However, the Department would need to give it closer consideration.

Mr Caldwell: The Department will assess that case when the Committee forwards it in writing.

Mr Hilditch: How would that affect any holiday pay accrued during that period of time?

Mr Gamble: My understanding is that women have certain rights regarding terms and conditions when they return to work after a period of maternity leave. If they extend maternity leave by six months of unpaid leave, there is some diminution of those rights when they go back to work. For example, they are not entitled to return to the same job, but to an equivalent one.

Moreover, there may be concerns about matters such as their entitlement to benefit from any salary changes during the second period. I must check on holiday pay - it should not be assumed that it carries on.

Mr Carrick: The qualifying service condition for statutory maternity pay discriminates against women who change jobs in the early stages of pregnancy. Career enhancement can, therefore, be affected. The trade unions raised that issue.

Mr Gamble: Statutory maternity pay is available from day one.

Mr Carrick: Is there a qualifying service condition?

Mr Gamble: No.

Ms Taylor: The 26 weeks' additional unpaid leave is fine.

Mr Carrick: Can you see a problem with that from a woman's point of view?

Mr Gamble: Career enhancement might be affected if a woman took a further six months off after receipt of statutory maternity pay. I do not see the problem clearly.

Ms Taylor: It returns to the earlier point about an established relationship with the employer. For someone to arrive, stay in a post for two weeks and then announce that she will disappear for a year is difficult for a business to accept.

Mr Carrick: The trade unions were concerned about that.

The Chairperson: I understand that subsections 18, 19 and 20 of the GB Employment Bill deal with the maternity pay period, the right to statutory maternity pay and entitlement. Those issues do not seem to be replicated in this Bill as it stands.

Mr Caldwell: There will be another Social Security Bill.

The Chairperson: That explains it.

Mr Gamble: Clause 13 is rather different from the other clauses. It concerns the provision of a new right for the parents of young children to request flexible working arrangements. The procedures that employers must follow when considering requests are specified, together with the grounds on which requests can be refused. The intention is to facilitate dialogue between parents and employers about working patterns that better meet the parents' responsibilities for childcare until a child's sixth birthday while taking account of the needs of the employer. Parents can balance work and parenting responsibilities during that time. Draft Regulations will be drawn up with regard to that, and there will be a period of consultation. A task force, chaired by Sir George Bain, was set up to develop an approach to flexible working for the UK as a whole. The task force's recommendations have influenced the approach that will be followed in the Regulations.

The employee must make a written request to the employer, and they then meet to discuss it. The employee must tell the employer how his flexible working proposals could tie in with the business needs. The employer is then supposed to make an assessment on whether he can accept the request or make some proposals for altering it. If he cannot accept it, he should give the reasons, based of the list of grounds set out in clause 13, of which there are about a dozen.

The employee can appeal if he does not agree that the decision is properly based. The intention is that the appeal could be settled in the workplace or through an arbitration arrangement. In England, the remit of the Advisory, Conciliation and Arbitration Service (ACAS) will be extended to bring binding arbitration to this type of situation. We should probably do the same with the Labour Relations Agency's arbitration scheme.

If none of that works, the employee could go to a tribunal. It is intended that the tribunal would consider whether the employer had followed the process properly and whether he had given a reasonable reason for not accepting it. It would not try to second-guess the employer's estimation of his business needs. The assumption is that the employer knows what his business is about. The tribunal would see whether the reasons for refusal, which would be listed in the Bill and Regulations, seemed reasonable.

It is a type of voluntary approach to see whether arrangements can be reached rather than giving an across-the-board right to flexible working, which some people thought would be a good idea. However, businesses thought that that would be a disaster, and it would be difficult for businesses to administer.

The Chairperson: In previous briefings, the point was made that the Bill focuses on one type of carer - parents. What about the perceived inequity of carers of elderly parents or elderly relatives?

Mr Caldwell: The Bill must be viewed in the context of the subject matter, which is work and parents. That is what the Bill is about. Other matters such as care for the elderly would be for an entirely different forum.

Mr Carrick: I want to confirm that there is no de minimis situation with small employers. If you have two or ten employees, there is no de minimis. Does it apply to everyone from one employee upwards?

The Chairperson: Yes.

Mr Carrick: If a retailer opens a shop six days a week from 9.00 am to 5.00 pm, must the flexibility be within that timescale? Can a proprietor be asked to open the shop at 10.00 am or close it at 6.00 pm?

Mr Gamble: If an employee of a retail outlet asked for flexible working time, he would make a proposal to the employer about how it could fit in with the business. If a reasonable proposal as to how the employer could get round that is not made, the process would stop immediately.

Mr Caldwell: If the employee can convince the employer that there would be no detrimental effect in starting the business an hour later, it may be possible to agree that flexible way of working. The employer may lose out or it may enhance the business.

Mr Carrick: It is a judgement call. However, the employee should not be allowed to usurp the judgement of the employer, who is paying the bills.

Mr Gamble: The employee would propose how flexible working could fit in with the employer's business, and subsequently they discuss that. The employer may decide that it cannot be done, or that the reasons are not strong enough, and the employee may accept that. However, if the employee disagrees with the decision, the case could be taken to a tribunal.

Mr Carrick: Who would meet the costs of the tribunal?

Mr Gamble: As with unfair dismissal, each side would meet its own costs, unless the tribunal chose to put them on one side, for example, for vexatious behaviour.

The Chairperson: Tribunals make decisions on narrow grounds. It is not a judgement of unreasonableness; it is based on the employer stating the facts incorrectly.

Mr Caldwell: It is not a judgement of the particular circumstances; it is to do with whether the process has been adhered to.

Mr Gamble: There could be a dispute about whether an employer rejected a proposal on the basis of facts that were incorrect, but not on the employer's judgement of whether the business would suffer. If the employer makes a reasonable argument for the judgement, the tribunal will not dispute that.

The Chairperson: Presumably you have ruled out extending those grounds because of the balance of opinion in the consultation.

Mr Gamble: That part of the consultation aroused the greatest interest, as there seemed to be a demand for flexible working.

Mr Carrick: There is a proposal that employers will have a duty to consider flexible working hours for the parents of children who are under six years of age; that is the cut-off point. Did that come out of the consultation?

Mr Gamble: Yes. There was a discussion about children starting school. Six years was the age that was thought reasonable. It could be set at any age, but most of those consulted felt that six years of age was reasonable.

Mr Carrick: The trade union representatives thought that that was an unacceptable cut-off point. They were thinking of 18 years of age.

Mr Gamble: Twenty-five. [Laughter]

The Chairperson: Sixty-five. [Laughter]

Mr Gamble: The final batch of clauses is quite short. Clause 14 is concerned with the nature of the regulation- making powers, and that they will be subject to negative resolution by the Assembly. In some cases the Bill is inserting powers into another piece of legislation such as the Employment Rights (Northern Ireland) Order 1996. If that is the case, it is that Order that determines the process for the Regulations. If it says they are affirmative, they are affirmative. The Regulations take their tone from the legislation concerned.

Mr Caldwell: Many Regulations are required to be made under the Bill. There are nine different sets of Regulations relating to maternity, paternity and adoption.

The Chairperson: There is an avalanche in the offing.

Mr Caldwell: Everything must be ready for the legislation to come into effect on 6 April 2003.

The Chairperson: Theoretically, the Committee could ask for an extension of Committee Stage in September. However, that could cause problems with timing. How much time is there to reach Royal Assent? The Committee Stage is due to end on 23 September.

Mr Gamble: Consideration Stage would have to take place in October. The Bill needs to receive Royal Assent not later than December 2002, or early January 2003, because the powers in it are used to bring Regulations before the Assembly. We hope to have dealt with those Regulations by early March so that when they come into effect in April, employers and employees will have had some time to consider them. Information will be published in the meantime, on the basis that the Assembly is expected to agree the Regulations in due course.

Mr Caldwell: There are one or two as yet unsolved timing problems, the main one being that until the Bill receives Royal Assent, the Regulations cannot be made.

Furthermore, babies expected to be born in the week beginning 6 April could be born prematurely as early as mid-November. No solution has been developed to deal with that problem.

Mr Carrick: There is a practical issue to be considered concerning the Inland Revenue and its documentation. It would have to redesign its literature.

Mr Gamble: The Inland Revenue is working on this on the basis of certain assumptions. If the assumptions turn out to be wrong, it would not be possible for everything to come on line by 6 April. The corresponding GB Employment Bill has still not reached Final Stage.

Mr Caldwell: The Bill reaches Report Stage today.

The Chairperson: In the past couple of days, we have received a letter from the Minister concerning the fixed-term contracts with regard to Northern Ireland being covered in the GB Bill. Previously, the Committee thought that that would apply from July, but it has been put back to October. Will that cause problems with regard to the European Union? I had thought that the date in July was fixed.

Mr Caldwell: It was fixed, but a one-year extension was given. This was to apply from 10 July 2001, but it was changed to 10 July 2002. Certain difficulties arose in GB.

Quorum lost at 4.17 pm.

Quorum restored at 4.20 pm.

Mr Gamble: I think he said that it could be changed but the convention was to keep the titles of Bills reasonably broad because amendments and additions might have to be made. Something could be added in and in the future no one would know where it is because it is in an anomalous place. There is time to think about that, and if there are strong feelings, we could ask George Gray, the chief legislative counsel, to give us a more formal response. That was his immediate reply, but we could ask him how strongly that convention holds.

The Chairperson: Ms McWilliams was arguing that the title should be something like "parental and workers' rights Bill". That title may not capture everything.

Mr Gamble: Flexible working is included.

Mr Caldwell: That point could be addressed by the Regulations. They will be specific and the title will give a better indication of the subject matter.

The Chairperson: That is a presentational political point. The public may be trying to get a handle on what the Assembly is doing, and they read the Employment Bill and wonder what difference it makes, and that is a concern. However, I appreciate the tradition and the legal point.

Thank you for coming, and I apologise for the late start. The Bill is complex and I thank you for answering our questions and wish you well as you progress it.