Key parental leave rules

Six months' paid maternity leave Six months' unpaid maternity leave Two weeks' paid paternity leave Statutory maternity pay increased Firms reimbursed parental leave payments

The measures are part of the new Employment Bill, one of the most comprehensive packages of workplace-related legislation the Labour government has drawn up so far.

The Department of Trade and Industry (DTI), which is responsible for the bill, aims to strengthen employee rights, but claims to have spared employers most of the costs of tighter labour laws.

"This package is good for British business and it is good for the people who work in business," said Trade Secretary Patricia Hewitt.

But the resulting compromise legislation has come in for criticism from small businesses, which fear the increasing burden of paperwork.

Parent power

The most high-profile section of the bill deals with maternity rights, an area where Britain is seen as severely lagging the rest of Europe.

Broadly, the new rules increase the amount of paid maternity leave from the current 18 to 26 weeks, and also increases unpaid leave to 26 weeks - taking the overall maternity leave allowance to one year.

The same maternity leave rights will also become available to mothers of adopted children, and fathers will have the right to two weeks' paternity leave.

Maternity pay will also be made somewhat more generous, and employers will receive additional recompense from the government.

Small businesses will in some cases be repaid the full amount of parental leave allowances, and may receive additional compensation for related expenses.

Lagging Europe

The new rules should come into effect in April 2003, and the DTI projects that over 350,000 new mothers and around 450,000 new fathers in work will benefit every year.

Key tribunal rules

Employers and staff must follow three-stage in-house procedure Tribunal payouts will be altered if procedure is not followed Fast-track tribunal procedures

The rules do not, however, bring Britain into line with most other European countries, where maternity rights tend to be far more generous.

"It still leaves us some way behind the best European practice," says Dorothy Henderson, employment partner at law firm Travers Smith Braithwaite.

Others gave the rule a cautious welcome.

Theo Blackwell, policy specialist at the Industrial Society, said: "This is a move in the right direction for parents.

"As employers come to believe that family friendly policies are a business asset rather than a liability, the government could be persuaded to go further."

A boost to maternity rights has been in the government pipeline for some time now, and a few observers had hoped that the DTI might have been willing to make a more radical step to promote flexible working practices.

Dealing with disputes

The other main part of the bill deals with employment tribunals, the courtroom-like mechanism for dealing with workplace disputes.

The problem with tribunals has been the dramatic surge in the number of cases, which have trebled in the past decade.

The DTI fears that both employers and staff tend to move disputes to the tribunal stage too hastily, without exploring all potential avenues for resolution.

The Employment Bill mandates a three-stage procedure for in-house dispute resolution, and makes provision for levying penalties on parties who call unnecessary tribunal cases.

One initial proposal - that employees should bear some of the financial costs of staging tribunals - was quietly dropped earlier in the year.

Ask the staff

The main omission in the DTI's bill was the idea of broadening rules on worker consultation.

UK companies can currently be penalised for not consulting staff on major changes such as mass lay-offs.

But - unlike in most of the rest of Europe - there is no provision for obliging them to listen to their workers' views.

In much of Europe, companies legally cannot make certain moves without worker approval, and firms are obliged to have employee representatives on their board.

But while similar rules were absent from the Employee Bill, experts say it is only a matter of time before the UK is obliged to fall into line with European legislation.

No surprises

Employment lawyers say there is nothing genuinely new in the bill, which merely rounds up a series of measures that were pending in any case.

The DTI has extensively trailed many of the measures, as well as launching a lengthy consultation process.

"This bill is pretty much all as the government said it would be," says Ms Henderson.

The main voice of opposition has come from small companies, which fear it will simply add to the already heavy burden of bureaucracy.

Under the tribunal rules, for example, companies of under 20 staff will be obliged to have formal dispute-resolution procedures in place, something they have so far been spared.

The Federation of Small Businesses called on the government to ensure that no further employment legislation would be introduced.

"Small businesses cannot take any more without their ability to hold onto or create new jobs being affected," said FSB employment spokesman Bill Knox.

Small firms, which employ half the British private-sector workforce, have complained about a raft of new government rules, including stakeholder pensions and regulations on working time.