Speaking to the Economic Affairs Scrutiny Panel this week, Senator Lyndon Farnham said he understood why some businesses, particularly small firms, were concerned about the burden that proposals to extend parental leave rights could place on them, but that such developments were ‘inevitable’.
And he said that it was important to ‘keep things in perspective’ when considering the proposals, which are due to be debated by States Members next month.
Social Security Minister Judy Martin has proposed extending parental leave rights to 52 weeks, taken in up to four blocks over three years, following the birth or adoption of a child, including via surrogacy. The first six weeks of both parents’ leave would be paid for by their employers.
The proposals form the second part of a plan to improve family friendly employment rights, based on recommendations by the Employment Forum.
Earlier this year, the Jersey Chamber of Commerce called on the States to share the financial burden of the planned extensions and debate on the latest proposal was put off for a month pending a review by Scrutiny.
Giving evidence to the panel as part of that review, Senator Farnham said that if the States were to share the financial burden of the legislation then social security contributions for employers may have to rise.
And he said that although some businesses may find the legislation difficult at first, and some may not be able to cope altogether, there would be benefits to employers in the long term if the proposals come into force as planned on 1 September.
‘I think they [Chamber] raise a valid point, and they talk about the UK where small businesses can claim back a proportion of what they pay out,’ he said.
‘But national insurance is 13.8% in the UK and 12% for employees, it is 6.5% and 6% in Jersey, so it is double in the UK. In addition, businesses have to pay up to 28 weeks’ sick pay whereas there is no provision here.
‘If small businesses are going to need some support, then they may well have to accept there is going to be a small increase in employer contributions to cover that. It is a reasonable point, but we have to keep things in perspective.’
He added it was ‘inevitable’ that family friendly legislation would be improved and exemptions for small businesses could hinder them attracting and retaining staff.
His priority, he added, was to ensure a strong economy.
‘Whilst it may cause some difficulties that we may have to help some businesses through, the potential advantages when we are talking about diversity and closing gender pay gaps and putting the family first and children first, I think the advantages in time could outweigh the disadvantages. So, at this moment in time I am leaning to “let’s get on and do this”.’
Pressed by the panel on whether businesses had been properly consulted about the proposals, Senator Farnham said the changes had been coming for a number of years and organisations such as Chamber had been consulted.
However, he acknowledged that in general terms the government could improve the way it consults.
