Friday 5 February 2010

Consequences

Just before he left for the evening, my Practice Manager mentioned a small fact that had been drawn to his attention today. I tweeted it quickly at the time, but it deserves more attention than can be given in 140 characters.

The fact is that my firm, which has a mere 23 staff, has had to cope with the absence of at least one of them (and sometimes two or three), continuously for the last 3 years. Or, to put it differently, the last time when all our staff were present & correct was slightly over three years ago.

The reason is simple - a combination of maternity, paternity and sick leave. Whilst a degree of that is perfectly justifiable, and I for one would certainly never begrudge a reasonable level of leave for most of these reasons, the entitlement to these forms of leave has increased significantly under New Labour. Paternity leave, for example, did not exist at all ten years ago when my first child was born; I was only able to take a mere few days holiday. Maternity leave is the big winner, though - it is roughly double what it used to be.

Now, there are arguments in favour of this state of affairs. However, I want to bring home the real effect of these policies. The effect on my firm has been that roughly 5% of my staff have, at any one time, been absent. If we assume that New Labour have roughly doubled staff leave entitlements (which I would say is about right, on the whole), then 2.5% of my salary bill goes on staff who are not there as a result of New Labour's laws*. Add in the cost of temporary staff to cover for them and our back of the envelope calculation is back up to 5% or so.

So, dear reader, if you are in employment and are wondering where your last pay rise vanished to, there is your answer. Unwind those employment regulations and I will have a budget for an instant 5% pay rise for all my staff.

Ah, you say, but I am an evil capitalist employer so if I am released from the need to fund this, I will surely just keep the money. You may be right, to a degree. So let us assume that I save the cash. My profits will then increase commensurately, which will translate to an increase in my income. The same increase will apply to my income tax, of course - which I will pay at 40-50% instead of the 20% paid by the majority of the staff who would have received the pay rise. This means that the tax paid by the business on that 5% of the salary bill will double. All that money, there for the Government to invest wisely**.

Whether you are in employment or not, if you use public services or pay tax yourself, these regulations hurt you. There is my point. These regulations have a definite and distinct cost, and that cost is not just borne by nasty rich evil capitalists who can afford it easily.

The cost falls on you. It falls on all of us.

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*to remain competitive, and encourage good staff to return in due course, we are quite generous with salaries during permitted absences. Gordon's recession means that may have to change, however.

**don't laugh.

10 comments:

  1. When holiday entitlement went from 4 - 5 1/2 weeks last year I thought I would cover it myself instead of getting in a replacement. I worked a six day week for 25 weeks.
    I took 10 ten days holiday last year to placate Mrs Q as that is 5 more than than the last five years.

    I am in favour of paternity. I remember that lousy 2 days. But Maternity should be totally redone. Why business should fund babies is a mystery? We don't suddenly pay out benefits for disability or unemployment.

    I once did a paper for a company I worked for that employed a pretty even M/F split of in the main 20 -30 year olds. Four women out of 100 came back to work. Yet all received full maternity pay and all were encouraged by the system to pretend that they were coming back, so had their jobs held open for a year.
    The company destroyed that report under advice from the HR police.
    Maternity really does need an overhaul, but it won't happen.

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  2. My daughter has a woman "working" for her whom she reckons has done less than a month's "work" in the last 18 months due to sick leave before the birth, maternity leave afterwards and even more sick leave. And all the time she was pregnant she found reasons why she couldn't do particular jobs. "Can't carry those files, they're too heavy in my condition"; "Can't stand by the photocopier too long".
    This is the Civil Service where they can swing the lead without too much difficulty, but as my daughter said a couple of days ago "and now the bloody woman's pregnant again".
    If this is typical, heaven help us!

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  3. Why business should fund babies is a mystery? We don't suddenly pay out benefits for disability or unemployment.

    Good point Bill. I could make more sense of it, if the Government cared more about children's well-being.

    I suspect the issue is that some equality dogma means it would be "discrimination" if women who have recently (or not so recently) given birth should lose out on the benefits of their jobs (even though they aren't doing their jobs).

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  4. All of the above reasons are why the company I work for has slashed the number of employees and have no intention of taking any more on. Reproduce this across the country and the unemployment stats start to make more sense.

    Thank you Labour.

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  5. Thanks, all of you. It is re-assuring to hear that I am not alone in being concerned.

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  6. Patently,

    You are not going to get away with this post that lightly. You worded the post carefully when you identified various reasons for legitimate absenteeism, but you did highlight maternity leave.

    "Maternity leave is the big winner, though - it is roughly double what it used to be."

    May I just analyse this. First there is the loss to your firm for not having the female employee in the office and secondly, there are the payments that have to be made for a statutory period if that employee has worked for you for more than 26 weeks. The loss in productivity to the firm is unfortunate and hard to compensate, but the pay is a burden the Government has deliberately transferred to the private sector.

    This has to be balanced against the benefit to the baby and society as a whole, as well as to the mother in the weeks, that can be exhausting, following the birth. Statutory Maternity Pay (SMP)also arises from the prejudice older woman faced in returning to skilled positions after they have had children, possibly because they are more less attractive in a number of ways compared to younger candidates. Don't get me wrong; someone's loss is probably another's opportunity but I wish you would acknowledge the importance of maternity and paternity leave, with the crux of your argument being on who precisely should fund it.

    Possibly SMP is too high, but it is supporting a family when outgoings rise. I suggest that you might be better off being prickly about outgoings that do not directly go to individuals but directly to HMRC, like VAT or PAYE. Look on the bright side; at least SMP reduces your corporation tax bill. :-)

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  7. Hi M,

    I don't pay corporation tax; we trade as a partnership!

    Maternity pay & leave to a reasonable degree is something that I do not begrudge. Its original purpose was to ensure that it was possible for the mother to return to work, and I do not have a problem with that. Allowing me to sack someone just because she is pregnant is unreasonable; requiring me to keep her job open for her for a reasonable time is not.

    Now, there will be many views on what is reasonable and what is not. I can accept that. However, is it really reasonable that (for example):

    - a woman can take up a job offer knowing that she is pregnant, without telling me, and then claim the full maternity entitlement from me?

    - that all maternity leave is effectively extended by the woman's holiday entitlement plus 8 days, on the basis that she still accumulates entitlement to holiday leave and bank holidays, even while on maternity leave?

    - that maternity leave can easily be greater than the actual time that the woman ever spent working?

    Yes, maternity leave is a balance. It is a balance in which the benefits accrue to the parents and to society, and the costs are dropped almost exclusively in the lap of the employer. This is done in the name of "fairness".

    In the end, parenthood is a choice. It is something that you can (and should) decide to do or not do. Yes, it is hard work - I know that only too well - but it is hard work that someone chose to take on. We should be encouraging self-reliance and self-responsibility, not encouraging people to find someone who they can set up as being responsible for their needs ad infinitum.

    One final thought (for now). I have already decided that, should I ever have to leave my current firm, I will establish my own firm and trade as a sole practitioner (at least initially). Rule 1 for that firm will be that it takes on no employees; it will outsource or use IT instead. What does that say about the current state of the UK's labour laws?

    If this is harsh, then I am sorry, but life is harsh.

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  8. Patently,

    You raise three points:

    i. "- a woman can take up a job offer knowing that she is pregnant, without telling me, and then claim the full maternity entitlement from me?"

    Are you unlucky? The human gestation period is 40 weeks. The female employee has to work for you for at least 26 weeks to qualify for SMP. She can, at the earliest, claim maternity leave 15 weeks before the birth. This leaves 25 weeks for the pregnancy to have elapsed before she claims. It is deliberately set so she is not pregnant when she starts.

    ii. "- that all maternity leave is effectively extended by the woman's holiday entitlement plus 8 days, on the basis that she still accumulates entitlement to holiday leave and bank holidays, even while on maternity leave?"

    Holidays and bank holidays are her entitlement above and beyond maternity leave. Why should she be dealt with differently to other employees in this respect? Don't be petty. :-)

    iii. "- that maternity leave can easily be greater than the actual time that the woman ever spent working?"

    Yes, it can but aren't you investing in the future with SMP? Just as you choose who you employ, discrimination and constructive dismissal still exist.

    All I am trying to get across is that women do not have an easy ride in the workplace in my experience. Yes, I have seen SMP taken advantage of, such as the Head of Sales at a Japanese Bank who hated her job so she now has four children. I should hope that you inspire your staff, you are a pleasure to work with and you show interest so your colleagues are motivated to return to work. When you run a firm, you cannot escape the modern social responsibilities that now go with this. "Ad infinitum" is harsh.

    You did admit "Maternity pay & leave to a reasonable degree is something that I do not begrudge." so we are, in fact, agreed.

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  9. I honestly think that employment and career prospects would be better, overall, for women if the maternity rules were not so onerous on employers. Employment law is always a balance between preventing wage-slavery and preventing employment being created. I feel the balance has shifted far too far in favour of the entitlement culture and that will only discourage employers from taking people on at all.

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  10. ...Just as you choose who you employ...

    Yes, I do choose, and BE highlights why improving maternity rules is not in fact good for women's employment. I shall say nothing more than that.

    As regards bank holidays and the like, they mean that she is entitled to stay at home on those days and not work. And she does, indeed, stay at home on those days and not work. But she is apparently entitled to stay at home and not work for another day as well, because on that day she had two reasons to stay at home and not work.... No sorry, I still don't understand it.

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