Parents will be able to split maternity leave between them under new plans to be unveiled by the deputy prime minister Nick Clegg.
Under the proposals, parents will be able to split the traditional year's allowance of maternity leave however they wish from 2015, with the one proviso that mothers take the first two weeks after birth.
It's understood Clegg had considered extending paternity leave from the current two weeks, but backed down because of the cost to businesses, although this will be reviewed again in 2017.
As part of a wider speech on women and flexible working, to be delivered on 13 November in Putney, Clegg will also say: "The problem comes down to a whole range of clapped-out rules and arrangements. Whether that's the balance between maternity and paternity leave; or the childcare that's available; or the way our tax and welfare systems don't fully reward part-time work.
"Arrangements which assume that families are still comprised of one bread winner and one homemaker; mum in the kitchen; dad in the office. Even though the reality is that, in many families, both parents work, often juggling busy lives, often working part-time, often without relatives or friends close by who can help out."
New fathers are currently entitled to up to two consecutive weeks of 'ordinary statutory paternity leave', which must be taken within eight weeks of the child's birth, with pay of either £135.45 a week or 90% of average weekly earnings.
Additional paternity leave is unpaid, unless the mother has any of her statutory maternity pay entitlement still outstanding, in which case the balance will be paid to the father.
Employers are able to claim back 92% of statutory paternity leave payments, while small businesses entitled to Small Employers Relief can claim back the full 100% plus an additional amount in compensation for their portion of the National Insurance contributions made on the payment.
Business leaders have reacted with mixed emotions to the planned move.
Simon Walker, director general of the Institute of Directors, welcomed the move from Clegg, saying businesses would be pleased that splitting the maternity leave had been chosen, rather than simply granting fathers more paternity leave.
"We agree this is not just a question of equality, but also of economic necessity. IoD members want to be accommodating to their staff, and to work with mothers and fathers in sharing leave after they have had a child. Being able to split leave flexibly will be attractive to parents, but will inevitably increase uncertainty for employers, who must be given suitable notice beforehand.
“We are pleased the government has listened to those in business who were concerned about increasing the amount of dedicated leave for fathers. Any extra leave would clearly have been an additional burden for employers."
However, small businesses face a potential increased burden as a result of Clegg's measures, according to John Walker, national chairman for the Federation of Small Businesses.
Walker said small firms were already operating flexibly and that extending the right to request flexible working would simply increase administrative pressures on the smallest of businesses.
“Small firms are key to taking on staff that have been out of the labour market for more than 12 months, but constant changes to legislation is a burden for them," Walker continued.
"Allowing chunks of maternity and paternity leave of as little as one week to be taken will place a disproportionate strain on small firms and will be very complicated to administer. We would want to see a much higher level in place, in addition to safeguards for employers are unable to accommodate requested leave patterns.”
Diversity in the workplace campaigners have welcomed the proposed changes, although Helen Wells, director of Opportunity Now, warned the success of the reforms would depend upon effective implementation and businesses working to prevent flexible working becoming a new form of segregation.
"When 49% of the UK’s labour workforce is female, coming only 15th in the Organisation for Economic Co-operation and Development [nations] for female activity in the economy is a clear indication of just how much employers need to rethink traditional working practices away from ‘presenteeism’ towards employee output," Wells said.
"A compelling business case confirms that increasing flexibility reduces overheads, carbon emissions, sick days and attrition. Not only that, but flexible working is an essential component in creating the agile workforce that every business will depend on to be competitive in a 21st century world economy.
"I encourage employers to see work as an activity not a place, judge people on performance not presenteeism and use the change in law as a springboard for creating cultures that are truly flexible and deliver maximum business benefit."