When Shared Parental Leave rights came in to force, the aim of them was to encourage both parents to spend time with their child in the first 12 months of the child’s life. However, whilst some employers offered enhanced maternity pay, most did not extend enhanced pay arrangements to those taking shared parental leave.
The Government guidance at the time stated that providing parity was not required. However, it didn’t take long for men to argue that they were being discriminated against because of their sex. This was because women had the choice of taking maternity leave or shared parental leave whilst men could only take the latter. It was also argued that where employers applied the same shared parental leave policy to both sexes, as women (unlike men) had the option to take maternity leave instead, this policy adversely affected men and was not justified.
Given the concern revolved around pay, whether the difference also amounted to a breach of the ‘sex equality clause’ requirement relating to contracts in The Equality Act 2010 was also debated. This provision implies a sex equality clause into all contracts of employment to ensure that if a term in a contract is less favourable to a man than a corresponding term in relation to a woman (or vice versa), that term is modified so as to not be less favourable, except where more favourable terms are enjoyed by a woman as a result of pregnancy or childbirth.
The Court of Appeal has now considered 2 cases and concluded that there is no direct or indirect discrimination or breach of the equal pay sex equality clause. Employers are therefore not obliged to replicate enhanced maternity pay for individuals taking shared parental leave.
In Ali v Capita Customer Management Ltd, Mr Ali was entitled to 2 weeks’ paternity leave at full pay and up to 26 weeks’ additional paternity leave at Shared Parental Pay rate (SHPP). The SHPP rate was the same as the statutory maternity pay rate (SMP). His female colleagues who opted to take maternity leave were entitled to 14 weeks’ maternity pay at full pay and 25 weeks’ SMP. The Employment Tribunal upheld his claim for direct discrimination but rejected his indirect discrimination claim. The Employment Appeal Tribunal concluded that there was no direct discrimination as Shared Parental Leave was different to maternity leave, the latter aimed at protecting the health and wellbeing of the pregnant and birth mother, the former based on caring for the child. They concluded that the correct comparison was between a man and woman on Shared Parental Leave, not a man on Shared Parental Leave and a woman on Maternity Leave. As a result there was no difference in treatment and no less favourable treatment of Mr Ali. In any event, they felt that any more favourable treatment of birth mothers would have been lawful by the provision in the Equality Act that stated that men cannot make a claim based on terms enjoyed by a woman due to pregnancy or childbirth.
Mr Ali’s legal team argued that women were protected for health and safety reasons by virtue of the compulsory maternity leave period, which was the first 2 weeks after childbirth or for 14 weeks, which was the minimum amount of leave required by the European Pregnant Workers Directive. However, as the woman could return to work after 2 weeks, the argument that leave (and enhanced pay) was afforded to protect the health and safety of the mother following to childbirth could no longer apply and that it must instead relate to the facilitation of childcare, in the same way Shared Parental leave did.
The Court of Appeal agreed that the correct comparator was a female employee on Shared Parental leave and that there was therefore no less favourable treatment. They concluded that the purpose of statutory maternity leave, after the 2 week compulsory leave period, was not for childcare purposes but to recuperate from the pregnancy, effects of childbirth, develop a special relationship between mother and child, breastfeed and care for the child. Maternity leave could commence before birth, was in part compulsory, could apply even where there was no child to look after and therefore must be to look after the mother’s health and wellbeing. In contrast, Shared Parental leave could only be taken post birth, was entirely optional, required the mother’s agreement to relinquish her right to statutory maternity leave and did require there to be a child to look after. The two were not comparable, therefore pay was linked to pregnancy and childbirth and thus he could not rely on the equal pay sex equality clause.
In Chief Constable of Leicestershire Police v Hextall, Mr Hextall took 14 weeks of Shared Parental Leave and was paid SHPP. His female colleagues had the option of receiving 18 weeks’ full pay under the enhanced maternity policy. The Employment Tribunal rejected his claims of direct and indirect sex discrimination. The decision on indirect discrimination was appealed. The Employment Appeal Tribunal concluded the comparator should have been his colleagues who had a present or future interest in taking leave to care for their newborn child, therefore the Tribunal was wrong in concluding that that men were not placed at a disadvantage by the policy. The case was remitted to a fresh Employment Tribunal. The Court of Appeal concluded that Mr Hextall was unable to bring an indirect discrimination claim as where a term was inserted by virtue of the sex equality clause, this could not amount to sex discrimination. In any event, the comparator should be a woman on shared parental leave and thus there was parity in treatment, and any difference in treatment would be justified as the aim of it was to afford special treatment to mothers in connection with pregnancy or childbirth which was a legitimate aim and paying enhanced maternity pay was a proportionate means of providing for that special treatment.
The winners and losers
This is welcome news for employers who offer enhanced maternity pay and who were concerned that they may have to increase shared parental pay rates to match or consider having to remove enhanced maternity pay arrangements. It is less welcome news for parents of newborn children who had been hoping to benefit from enhanced pay arrangements for fathers in an effort to share childcare responsibilities.
Please note this information is provided by way of example and may not be complete and is certainly not intended to constitute legal advice. You should take bespoke advice for your circumstances.