Deloitte’s decision to equalise parental leave for UK staff may well spur other companies to follow suit. In-House Perspective explores what employers must bear in mind.

Big Four accountancy company Deloitte announced in September plans to equalise parental leave for all its UK staff. Deloitte said the move was about showing its commitment to equality and demonstrating the ‘significance and value we place on looking after our people during some of the most important moments in their lives’.

As of January 2025, the company will give 26 weeks of fully paid family leave to all new parents, effectively bringing its paternity package, which currently entitles new fathers to four weeks of paid leave, into line with its maternity policy.

The measure has been put in place after a YouGov survey, commissioned by Deloitte, found that almost nine out of ten employees – 87 per cent – said family leave was a crucial consideration when choosing where to work, while for 85 per cent it was a key motivator for them deciding to stay put.

‘These findings underscore the urgent need for employers to adopt policies that support all parents in balancing work and family responsibilities, ultimately fostering greater gender equality in the workplace,’ said Jackie Henry, Deloitte’s Managing Partner for People and Purpose.

Although the measures are company specific – and only apply to Deloitte’s UK business – Anna West, a knowledge counsel in the Employment Department at Travers Smith, highlights that, in the professional services sector in particular, where one business leads others tend to follow. That means other companies will need to consider the staffing implications if they’re considering putting a similar scheme in place. Companies ‘might be concerned about there being a large take-up and what the cost of that would be, plus the disruption,’ she says.

Particularly in law firms and professional services companies, ‘groups of people come in at the same time and move through various stages together so there could be bumps when lots of people are wanting to take leave at the same time,’ West explains. ‘Employers would have to think about finding cover for people in order to manage the workforce.’

Under UK legislation new mothers are entitled to 39 weeks of paid maternity leave – six weeks at 90 per cent of salary and 33 at £184.03 – and new fathers to two weeks of paid paternity at the statutory rate.

In a bid to see more fathers enter the scope of the entitlement, the UK government has mooted changes in its recently lodged Employment Rights Bill that would make paternity leave a day one right rather than an employee requiring 26 weeks of continuous service in order to apply.

However, while the disparity between the allowances is a key reason why it’s mothers, not fathers, who typically halt their careers to look after young children, Abhijit Mukhopadhyay, Regional Fora Liaison Officer on the IBA Corporate Counsel Forum, says it would be concerning for small businesses if these changes to paternity leave became the norm across the private sector. ‘From a social point of view we need this; it’s important,’ says Mukhopadhyay, who's also Group General Counsel of the Hinduja Group. ‘But for smaller companies, I don’t think that maternity leave can be extended in the same way for a new father. Maternity leave is a must and paternity leave could maybe be one month or two months, but I’d be worried about smaller businesses being able to survive,’ particularly – in the UK – taking into account the recently announced increase in employer National Insurance, he says.

For Vikram Shroff, Co-Chair of the IBA Employment and Industrial Relations Law Committee, the policy change represents a ‘bold and interesting move’. However, speaking more generally, he doesn’t believe that equalising parental rights will necessarily redress the gender imbalance in this area in places where the workplace culture means men shy away from taking long periods off work. In India, for example, ‘it’s unlikely that a male employee would stay away from work for such a long time due to the performance culture in the country,’ explains Shroff, who's also a partner at AZB & Partners in Mumbai.

West agrees that it can feel as though it’s ‘frowned upon’ for men to want to take long periods of leave and highlights that when shared parental leave was introduced almost a decade ago, fears about widespread take-up proved unfounded, with employers having to find ways of incentivising their staff to use their entitlement. ‘When shared parental leave came in most employers just paid the basic rate,’ she says. ‘They thought it would be disruptive but because take-up was much lower than expected, a few years later employers started looking at ways to encourage fathers to take it up and started paying more.’

When it comes to incentivisation, Shroff says the flipside is that it’s possible that staff who are on course to earn a loyalty or performance bonus might be reluctant to take extended paid leave. It’s for this reason, he says, that employers will have to think very carefully about how they structure employee-incentive packages if they do decide to make changes to paternity leave policies.

‘We’re working on a long-term incentive plan for a client where employees will be rewarded on their performance after three years – it’s a mix of loyalty and performance,’ he says. ‘But if you have payments linked to a particular term of employment and then the employee is out of that pace for six months how are you going to judge that performance and other parameters? You can’t take that into consideration for not making payments – that’s dicey – but how to deal with it when the absence is long will play on a lot of employers’ minds.’