Shared parental leave pay - to enhance or not?
The Employment Appeal Tribunal (EAT) has held in Capita Customer Management Ltd v Ali and another that an employer's failure to pay a male employee enhanced shared parental pay was not direct sex discrimination.
The EAT held that the purpose of shared parental leave (SPL) is different to maternity leave. The Pregnant Workers Directive (PWD) provides for the health and wellbeing of the pregnant and birth mother and requires member states to provide a minimum of 14 weeks' maternity leave paid at least at the same level as statutory sick pay. By contrast, the Parental Leave Directive focuses on the care of the child and makes no provision for pay.
This meant that a father taking shared parental leave was not in a comparable situation to a mother taking maternity leave. The correct comparator would be a woman on shared parental leave, who would have been given shared parental leave and pay on the same terms as the claimant. The more favourable treatment given to women on maternity leave was rendered lawful by section 13(6)(b) of the Equality Act 2010.
Hot on the heels of the decision in Ali the EAT has held in Hextall v The Chief Constable of Leicestershire Police that although a failure to pay men enhanced shared parental pay will not be directly discriminatory, it may be indirectly discriminatory.
In order to bring a claim for indirect discrimination a claimant has to identify a provision, criterion or practice (PCP) which puts them at a particular disadvantage in relation to people who do not share the claimant's characteristic (in this case the characteristic being Mr Hextall's sex). Mr Hextall relied on the PCP of "paying only the statutory rate of pay for those taking a period of shared parental leave". The next thing to identify is the particular disadvantage alleged, and then a comparative exercise must be carried out to decide whether the PCP puts men at a particular disadvantage when compared with women in no materially different circumstances.
The disadvantage to men was argued to be obvious, in that it is more difficult for men to take the leave available to them than it is to stay at work. A man staying at work will receive full pay, but if he takes SPL he will only receive the statutory rate of pay. The overwhelming majority of women in materially the same circumstances suffer no such disadvantage because they have a full pay alternative available to them in the form of occupational maternity pay.
The EAT has remitted the matter to a differently constituted tribunal for consideration.
Take note : SPL was introduced to enable families to make choices about who cares for the child during the first year of life, and to encourage fathers to take a more active role in bringing up their children. It aimed to relieve the childcare burden on female employees. In practice though, very low numbers of eligible fathers have taken up SPL, in part because for many it is unaffordable. It seems, following the decision in Hextall, that paying men at the statutory rate for SPL may be open to challenge on the basis that it indirectly discriminates against them on grounds of their sex.
While the matter has been remitted to a differently constituted tribunal for consideration, employers need to be aware that while claims for direct discrimination in relation to shared parental pay arrangements will not succeed, there may be a bit more mileage in those for indirect sex discrimination. Employers should keep their practices on whether to enhance SPL under review and take advice on possible objective justification defences.
This article is taken from HR Law - May 2018.