Netflix has announced that its employees can take as much time off as they wish during the first year after their child’s birth or adoption and still be paid in full.
The aim of the policy is to attract and retain the best talent by providing a valuable benefit which far exceeds legal entitlement. Parents will have the flexibility to return to work part-time, full-time, or dip in and out of work as they wish. Presumably they can also choose not to work at all. They won’t have to worry about money, as whatever they decide to do they will be paid as if they were working normally.
The Netflix policy applies to mums and dads working at all levels across its global workforce, including those in the UK. UK employers competing for the best talent may consider offering something similar, but the financial implications may put them off.
Is there any reason why they shouldn’t cherry pick who gets it? This is certainly an option, although it’s not entirely without risk.
You can’t normally choose to offer the benefit only to one sex, as this will be direct discrimination on grounds of sex. It might be possible to offer the benefit only to women on maternity leave, as preferential treatment of women on maternity leave does not generally amount to unlawful discrimination against men. If the woman is not on maternity leave, but some other form of parental leave, the benefit will have to be offered to men as well. There is no justification defence for claims of direct sex discrimination.
Employers may want to limit the benefit to senior roles where it’s more difficult to recruit. This could give rise to claims of indirect sex discrimination if there are more men than women in senior roles. However, the need to attract and retain talent should defeat claims, provided this goal can’t be achieved by less discriminatory means.
What about making it performance-related, so those who perform best are rewarded? Again there is nothing wrong with this in principle. There’s a good business reason for it. However, employers need to be alert to possible disability discrimination issues, for example if a particular level of sickness absence disentitles the employee from receiving the benefit. Employers considering going down this route should ensure the policy is flexible, so that they retain discretion to allow employees to benefit in some cases where absence is related to a disability. In order to avoid pregnancy discrimination, illnesses occurring during and related to pregnancy would need to be ignored in their entirety.
Netflix policy compared to statutory entitlements
In many countries the benefit offered by Netflix far exceeds statutory entitlement. In the UK, parents can take up to 12 months off work, but this has to be shared between them. Alternatively, the mother can take 12 months maternity leave, in which case the father is only entitled to two week’s paternity leave.
Statutory pay is nowhere near as generous as Netflix is offering. Women on maternity leave are paid for six weeks at 90 percent of normal pay and 33 weeks at the statutory rate, currently £139.58. Fathers on paternity leave are paid £139.58 for the two weeks. If parents opt to share leave, they get 39 weeks’ pay between them, but only at the statutory rate of £139.58.
It is also worth noting that whilst employees on shared parental leave can dip in and out of work (although the employer can limit this to a degree), women on maternity leave have to take leave as a single block.
Employers considering following in Netflix’s footsteps will have to think through the implications, both legal and practical.
Can you afford to offer this benefit to all staff? If not, will you offer it for a shorter period or only to some staff and if so, who?
Identify where indirect discrimination risks may lie: sex and disability discrimination claims are the most obvious, but think also about age discrimination. A benefit that can only be enjoyed by parents has the potential to be indirectly discriminatory on grounds of age.
How are you going to justify any possible indirectly discriminatory impact you have identified? Think through all of your business reasons for offering the benefit and document them. Consider whether these business aims can be achieved by less discriminatory means and document your conclusions. Thinking about these issues in advance will put you in good stead should claims be brought in the future.
Are you going to allow staff to dip in and out of work? If so, how are you going to manage this? How much notice are you going to need of planned working/leave patterns, if any? How are you going to cover the role when the employee is not there?
Once you have decided on these matters, you will need to include them in a comprehensive policy.