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Clarity on Shared Parental Leave Pay

MH
BY Miranda Hughes
Employment Law & HR

The Court of Appeal on 24th May has ruled that it was not discriminatory for a man to be paid shared parental pay at a lesser amount than enhanced maternity pay for a woman.

Background

In June 2017, a male employee won a direct sex discrimination claim in the case of Ali v Capita Customer Management Ltd on the grounds of his employer’s failure to enhance shared parental pay in the same way as occupational maternity pay.  The tribunal took a broad view, finding it discriminatory to pay a woman more than a man in respect of leave to care for their new baby, and determining that maternity and shared parental leave were for that same purpose.

Initial Appeal

The Employment Appeals Tribunal (EAT) heard the appeal of this case in April 2018 and overturned the tribunal’s decision. This was on the basis that the pay for a male employee taking shared paternal leave cannot be compared to the pay of a female employee on maternity leave because the purpose of the leave is different. The primary purpose of maternity leave is aimed at the health and wellbeing of the mother whilst shared parental leave is for the care of the child.

It ruled that, rather than using a female employee on maternity leave and pay as a comparator, the correct comparator would be a female employee on shared paternal leave and pay. As shared parental leave was paid at the same rate for both male and female employees, there was no direct sex discrimination in this case. In addition, the EAT stated that even if the comparator had been correct, this would not be discrimination due to the exception contained in the law which provides that women can be afforded more favourable treatment in connection with pregnancy or childbirth. 

The EAT did say it may be possible to argue that after 26 weeks of maternity leave, the purpose changes from recovery from childbirth to mother/child bonding, at which point a comparison could be made with shared parental leave and pay. 

Less than a month after this decision, the EAT also considered the case of Hextall v Chief Constable of Leicestershire Police. The case has factually similar circumstances to that in Ali, where a male employee claimed direct and indirect sex discrimination. Both of Mr Hextall’s claims were dismissed by the Employment Tribunal. Direct discrimination was dismissed on the same ground as that in Ali on the basis that a woman on maternity leave was not a valid comparator. In relation to indirect discrimination the tribunal applied the same reasoning to reject this claim.

The indirect discrimination was challenged on appeal. The EAT said that the ET had erred in law in applying this finding. The ET had wrongly applied the test for direct discrimination to the claim for indirect discrimination and remitted the claim to the ET for a fresh earing.

Court of Appeal

Both Mr Ali and the Chief Constable of Leicestershire Police appealed these EAT decisions and these have now been heard together by the Court of Appeal. Having considered both cases, they reached the decision last week that failing to enhance pay for shared parental leave at the same rate as maternity pay is neither direct nor indirect sex discrimination. The Court of Appeal confirmed that birth mothers cannot be the subject of a direct discrimination claim because Parliament had made an exception for provisions giving special treatment for women in connection with pregnancy or childbirth. Additionally, both men and women are entitled to SPL and therefore men were not placed at any particular disadvantage by a policy not to enhance shared parental pay.

Conclusion

Such a decision will be welcomed by employers who offer enhanced maternity pay but do not offer the same pay enhancement to parents taking shared parental leave. However, it will no doubt come as a blow to those campaigning for greater uptake of shared parental leave. HMRC revealed that less than 1% of those eligible had made use of it in 2016. Part of the reason for this low uptake is attributed to financial constraints as often the father earns more than the mother and employers do not tend to enhance shared parental pay in the same way as they do maternity pay.

According to this decision, employers will not be guilty of sex discrimination if they fail to enhance shared parental pay in the same way as maternity pay.

Should you have any queries on the various types of family friendly leave available to employees and what impact this has on your business, contact your employment solicitor today.

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