HM Insights

Does shared parental pay have to be at the same level as maternity pay?

A recent Employment Appeal Tribunal considered whether an employer's failure to pay a male employee enhanced shared parental pay was direct sex discrimination.

The judgement in in Capita Customer Management Ltd v Ali and another, issued earlier this month, confirms that Mr Ali, who argued that he should be entitled to the higher enhanced maternity pay rate offered by his employer Capita, had not been subjected to sex discrimination.

The confirmation that failing to enhance shared parental pay to match enhanced maternity pay is not discriminatory gives employers some much needed certainty on this issue.

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The facts

Mr Ali's wife gave birth to their daughter on 5 February 2016, two weeks prematurely week as annual leave. Upon returning to work on 7 March he advised his manager that his wife had been suffering from post-natal depression. Mr Ali said that his wife had been advised to return to work to assist her recovery, and accordingly he wished to take shared parental leave to care for his new born baby.

He was permitted to do so, but was informed that he would only be entitled to statutory shared parental pay during this time. He was aware that female employees on maternity leave from Capita were entitled to 14 weeks' at full pay and asked for the same treatment. When this was refused, Mr Ali submitted a grievance on the grounds of sex discrimination. The grievance was not upheld and Mr Ali brought claims in the Employment Tribunal (ET) where he was successful. Thereafter, Capita appealed to the EAT.

Shared Parental Leave

The concept of Shared Parental Leave was introduced in 2015 and allows up to 50 weeks of leave – 37 of which is paid – which can be shared by parents if they meet certain eligibility criteria. The current rate of Shared Parental Leave Pay is £145.19 per week, although employers are entitled to offer contractual shared parental leave pay which is more favourable than this basic statutory entitlement.

The submissions

Mr Ali's contention focused on the fact that in restricting his pay to the statutory level during this leave, Capita were essentially depriving he and his wife of the choice of who should care for their new born baby during this time and that as his female colleagues would be entitled to 14 weeks' paid leave, it was discriminatory to limit his pay to the statutory level.

Mr Ali accepted that the compulsory maternity leave during the initial two weeks immediately following the birth of the child should be disregarded for the present purpose as this time related to the mother's biological and physiological condition and was intended to facilitate her recovery following childbirth. The matter therefore concerned the additional 12 week period thereafter, during which time he argued that no further special treatment was justified under S.13(6)(b) of the Equality Act 2010. He argued that following the two-week compulsory leave period, the purpose of maternity leave was to allow the mother to care for her baby and to suggest that he (as a man) was not entitled to the same pay as a woman performing the role was directly discriminatory on the grounds of sex, culminating in taking away the choice he and his wife wanted to make as parents.

Capital refuted this stance and instead insisted that the comparison which had been put forward by the Claimant was not a valid one because the Claimant had not given birth. This is the reason why female employees are given the right to maternity leave and pay, and while they will likely undertake care of their child during this time, this is not the main purpose of the leave.

The Respondent also submitted that S.13(6)(b) of the Equality Act did in fact apply and the Claimant could not rely on the special treatment afforded to his female colleagues in connection with pregnancy and childbirth. Furthermore, the 14 weeks of enhanced pay was reasonably necessary to ensure that woman are not disadvantaged by taking maternity leave and as this leave is provided under the Pregnant Worker's Directive, no account should be taken of this benefit.

The decision

The ET upheld the claim of direct discrimination, accepting that Mr Ali could compare himself with a hypothetical female taking leave to care for her child after the compulsory two-week maternity leave. It was held that following the initial two-week compulsory maternity leave, the mother should no longer be considered to be in a unique position due to the physical and emotional toll of childbirth. The ET agreed that during the following 12 weeks of leave the Claimant would be carrying out the same role as a woman on maternity leave, that being – primary care of the child. Accordingly, it was held that Mr Ali was being treated less favourably in comparable circumstances.

The EAT overturned the decision of the ET, holding that shared parental leave (and pay) is not comparable with maternity leave/pay and should therefore be considered very separately. The EAT reiterated that the purpose of shared parental leave and pay is not the same as the purpose of maternity leave and pay; the former being the care of the child, and the latter being the health and well-being of the mother. The EAT disagreed with the ET and considered it irrelevant that during any maternity leave the mother would almost always take on the care of her child, this was ancillary to the primary purpose of the leave.

In reaching this decision the EAT considered that any decision to the contrary would disregard the purpose of the Pregnant Workers Directive which requires Member States to introduce legislation to enable women to take maternity leave with adequate remuneration of a minimum of fourteen weeks.

Accordingly, Mr Ali had failed to identify the correct comparator. He could not legitimately be compared to a woman who had recently given birth and was on maternity leave. Instead, the correct comparator in Mr Ali's case is a woman on shared parental leave (i.e the female partner of a woman who had recently given birth) and not a woman on maternity leave. Capita gave shared parental leave to parents of either sex on the same terms, therefore there was no discrimination. Mr Ali had been given the correct pay entitlement for shared parental leave.

As maternity pay is inseparably linked to the purpose and circumstances of maternity leave, it is not discriminatory for an employer to pay enhanced pay for maternity leave and not for shared parental leave.

The EAT noted that it may be that after 26 weeks the purpose of maternity leave may change from the biological recovery from childbirth and special bonding period between mother and child, and it may at that point be possible to draw a valid comparison between a father on shared parental leave and a mother on maternity leave, but this was not the case in the present circumstances and the appeal was therefore allowed.

The implications

This judgment serves as a useful clarification of the law in this regard. It is the is the first case at appellate level to resolve the issue of whether or not an employer discriminates against men if it pays enhanced maternity pay but only statutory shared parental pay. The decision of the ET in this case was in conflict with that of the ET in a similar case of Hextall v Chief Constable of Leicestershire Police. This decision now confirms that the approach taken in Hextall was the correct one.

While we await final judgement from the EAT in the Hextall appeal, it is likely that the EAT will uphold the ET's decision which will result in two appellate decisions confirming that failing to enhance shared parental pay to match enhanced maternity pay is not discriminatory giving employers some much needed certainty on this issue.

This decision also serves to mitigate concerns from some interested parties that employers may have be tempted to restrict maternity pay to a statutory level had the decision of the ET been upheld. While it will not be direct sex discrimination for an employer to enhance maternity pay but not shared parental pay, employers who wish to promote family friendly workplaces may wish to review their level of shared parental pay and consider enhancing it.