Shared parental leave and sex discrimination
Shared parental leave was introduced in 2015 with the aim of allowing working parents to share the care of their children. The statutory rate for shared parental leave is £148.68 or 90% of average weekly earnings (whichever is lowest) for the first 38 weeks and the final 12 weeks are unpaid. In comparison, statutory maternity pay includes six weeks paid at 90% of the mother’s income (with no maximum). With employers increasingly offering enhanced maternity pay, it still makes more financial sense for the mother to take leave.
Earlier this month, the Court of Appeal gave judgment on two cases, Ali v Capita Customer Management and Chief Constable of Leicestershire Police v Hextall, ruling that it is not considered discrimination to pay men on shared parental leave less than a woman on maternity leave whether the claim was one of direct discrimination, indirect discrimination or equal pay.
In the case of Ali, Mr Ali’s wife had been suffering with post-natal depression and was returning to work following medical advice. As a result, Mr Ali used his entitlement to shared parental leave to care for their young child. Mr Ali requested equal pay to that of his female colleagues who were on maternity leave. Capita rejected his request and Mr Ali subsequently bought a claim for direct discrimination, based on his sex.
The Court of Appeal rejected Mr Ali’s claim, ruling that there are notable differences to the terms of shared parental leave and maternity leave, so the two are not comparable. The purpose of maternity leave is not for the care of a child, but for the health and protection of the mother. Maternity leave can be taken before a child is born and can be taken after the birth, even in the event where a child is still born. The same purpose and terms do not apply to shared parental leave. It was therefore concluded that a birth mother taking her entitlement to maternity leave cannot be used as a legitimate comparator for the purposes of a direct discrimination claim. The Court of Appeal said the correct comparator for the purposes of Mr Ali’s claim must be a female employee taking shared parental leave. On these facts, a female was not treated any different under the terms of shared parental leave and, therefore, no direct discrimination took place and Mr Ali’s claim was unsuccessful.
The case of Hextall involved a claim for indirect sex discrimination against Leicester Police. Mr Hextall argued that men were at a disadvantage because they were less likely to take the leave than women who were entitled to enhanced maternity pay, because they received less payment.
Under the Equality Act, a claim for indirect discrimination cannot be brought where the situation could be subject to an equal pay claim. However, the Court made further comment that, in any event, a claim for indirect discrimination would have failed because the PCP (provision, criterion or practice) relied upon by Mr Hextall did not cause a specific disadvantage compared to women because women also received the same rates under shared parental leave.
Mr Hextall attempted to re-characterise the basis of his claim to that of equal pay, stating that his contract included less favourable terms than his female colleagues. Mr Hextall said he should be able to rely on the sex equality clause in the Equality Act to upgrade his contract terms so he would receive the same rate of pay on SPL as a woman does on maternity leave.
The Court of Appeal ruled that Mr Hextall would not be successful in an equal pay claim because there is an exception applied to women who are pregnant, who have recently given birth or woman whom are breastfeeding. The court found this exception to be wide enough to include an enhanced maternity pay package, and therefore a claim for equal pay would not have been successful either.
It is therefore clear that there is no chance of success for a direct, indirect or equal pay claim arising from paying women on maternity leave more than parents on shared parental leave. The implications of this judgment are therefore positive for employers. Currently around 45% of employers are offering enhanced maternity packages. This judgment indicates that employers do not have to shift away from offering these packages because they are under an obligation to equalise the pay rate to men wanting to take shared parental leave.
It is also important to note that these cases have highlighted the low financial protection afforded to men seeking to use their entitlement to shared parental leave, and this is counter to the intention of the Government when first introducing it; to encourage fathers to take a greater share in their childcare duties.
Although the judgments provide clear guidance on this matter, both claimants are seeking permission to appeal to the Supreme Court and so there is likely to be further comment.
If you would like to know more about how shared parental leave and maternity pay affect your business, please do not hesitate to contact our employment solicitors at Herrington Carmichael on 0118 977 04045.
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