PLANS to introduce greater flexibility for working parents have been given a conditional seal of approval by employers.

Extending paid maternity leave and establishing three months paid paternity leave was in line with the modern approach to maintaining the family and work balance, says the Kent branch of the Institute of Directors (IoD).

However, the organisation has warned that the Inland Revenue must absorb the burden of administration if the proposals are to work.

While the IoD backs most aspects of the Work and Families Bill, announced by Trade and Industry Secretary, Alan Johnson, it says it still has concerns that businesses would have to stump up maternity and paternity pay out of company coffers and then recoup the money from HM Revenue and Customs.

Chairman of the Kent branch of the IoD, Alyson Howard, said: "Our members, by and large, support family-friendly policies. Three out of four believe it is morally right for society to have these kinds of policies in the workplace. People believe such flexibility aids staff recruitment and retention and ultimately boosts morale.

"However, that said, we cannot ignore the fact that smaller firms will find it harder to cope with these proposals, hence the pressing need to reform the administration of maternity and paternity pay.

"If the Government is to win over sceptical businesses then it is crucial they transfer responsibility for paying statutory maternity and paternity pay from employers to the State. This would help companies manage this important change in employment law."