Is it discriminatory to pay shared parental pay at a lower rate than maternity pay?
A recent Court of Appeal decision considered whether an employer’s policy to pay statutory shared parental pay but enhanced rates of maternity leave, amounts to direct or indirect sex discrimination or constitute a breach of the equal pay legislation.
Shared Parental Leave
Shared parental leave was introduced in 2015. It allows parents to take leave of up to 50 weeks whilst receiving Shared Parental Pay (ShPP) for 37 of those weeks. Parents are able to take or share shared parental leave at their discretion. There is no statutory requirement on employers to offer enhanced ShPP and a recent combined case brought by two new fathers, heard by the Court of Appeal has given clarity on whether such practices could constitute discrimination.
Mr Ali v Capita and Chief Constable of Leicestershire Police v Hextall
Mr Ali was entitled to two weeks’ paternity leave at full pay. He then chose to take a further 26 weeks’ additional paternity leave for which he received statutory ShPP. His female colleagues at Capita were entitled to 14 weeks full maternity pay followed by 25 weeks statutory maternity pay.
Mr Hextall worked for Leicestershire Police which had a maternity policy providing that women on maternity leave would receive 18 weeks’ full pay whereas those on shared parental leave were paid at the statutory rate only.
Mr Ali and Mr Hextall claimed that because of these policies they had been discriminated against on the grounds of direct and indirect sex discrimination and that the practice was in breach of the equal pay legislation.
Court of Appeal Decision
The Court of Appeal dismissed both appeals. It held that the policies of both employers did not amount to direct or indirect sex discrimination, or a breach of the equal pay legislation.
In the case of Mr Ali’s claim of direct sex discrimination, the Court of Appeal held that Mr Ali’s circumstances were materially different to a mother who was on maternity leave. Contrary to what Mr Ali had submitted, the correct comparator in this case was not a female employee on maternity leave but a female employee on shared parental leave. In that scenario the female worker would be paid the same as Mr Ali and therefore his direct discrimination claim failed. The Court of Appeal stated that Mr Ali could not compare himself to a woman on maternity leave because the purpose of maternity leave is to facilitate the recovery and wellbeing of the woman after childbirth whereas the purpose of shared parental leave is to facilitate childcare.
In relation to the case of Mr Hextall, the Court of Appeal held that his claim was more properly categorised as an Equal Pay claim since he was claiming that there was a breach of his contractual rights by preventing him from taking leave to care for his baby at the same rate of pay as mothers taking maternity leave. The Court of Appeal held that the equality clause that would be implied into Mr Hextall’s contract of employment as a result of the Equality Act 2010 was excluded in this case as a result of the ‘special treatment’ exception that applies to women in connection with pregnancy and childbirth.
The Court of Appeal held that the indirect discrimination claim would have failed in any event since women on maternity leave are materially different from men or women taking shared parental leave. As such there was no valid comparison between Mr Hextall and a mother taking maternity leave. If there had been a disadvantage caused to Mr Hextall it would be justified as a proportionate means of achieving a legitimate aim, which is to assist with the recovery of mothers following pregnancy or childbirth.
This decision will surely be met with reassurance by employers who wish to continue to treat maternity leave and shared parental leave differently without the risk of similar legal claims.
Both Claimants are however, seeking permission to appeal to the Supreme Court so there may be a further chapter of this case still to come.
This briefing is for guidance purposes only. RadcliffesLeBrasseur LLP accepts no responsibility or liability whatsoever for any action taken or not taken in relation to this note and recommends that appropriate legal advice be taken having regard to a client's own particular circumstances.