Have we seen the end of enhanced company maternity pay?

An Employment Tribunal has recently ruled that an employer’s failure to pay enhanced shared parental pay to a father, at the same rate as the mother’s company’s enhanced maternity pay, amounted to indirect sex discrimination.  As a soon to be father (gulp) I must confess to having a vested interested in this case.

Shared parental leave entitles parents to share up to 50 weeks of leave and 37 weeks of pay in the year following the birth or adoption of their child, provided that they meet certain eligibility requirements. The minimum rate of shared parental pay is set by the Government and is currently £139.58 a week or 90% of an employee’s average weekly earnings, whichever is lower.

The Government advised that it is “entirely at the discretion of employers whether they wish to offer” enhanced shared parental pay.  It also suggested that it would not be discriminatory if women were paid enhanced maternity pay but men and women were not paid enhanced shared parental pay.

This advice was always going to be vulnerable to challenge, particularly following the Employment Tribunal case of Shuter v Ford Motor Company, which suggested that an employer’s failure to pay fathers enhanced additional paternity pay in circumstances where mothers received enhanced maternity pay, could amount to indirect sex discrimination. The Government’s advice on enhanced shared parental pay now seems incompatible with the Tribunal decision in the recent case of Snell v Network Rail.

David Snell and his wife both work for Network Rail. Mr Snell’s wife intended to take 27 weeks’ leave following the birth of her child with Mr Snell opting to take 12 weeks’ shared parental leave. Mr Snell subsequently discovered that whilst his wife would be entitled to 26 weeks’ full pay, he would only be entitled to shared parental pay at the much reduced statutory rate.

Mr Snell raised a grievance, alleging that Network Rail’s policy constituted sex discrimination. The grievance was unsuccessful and Network Rail advised Mr Snell that it had complied with its legal obligations as it was only required to pay him statutory shared parental pay. Mr Snell’s grievance appeal was also rejected.

Mr Snell brought a claim in the Employment Tribunal alleging indirect sex discrimination. Network Rail contested the indirect discrimination claim and suggested that any disadvantage could be justified, based on a legitimate aim of recruiting and retaining women in a male-dominated workforce. Before the hearing, Network Rail conceded indirect discrimination, so the Tribunal was left to determine remedy only. Mr Snell was subsequently awarded £28,321.03 in compensation by the Tribunal.

Network Rail has said in press reports following this case that it has reduced its maternity payments to bring them into line with statutory payments to avoid discrimination.  Rather than simply match the same rate of pay for both sexes, it seems that everyone misses out. 

What does this mean for you or your business?

If you or your employers do not offer any enhanced company maternity pay then you needn’t worry; the facts of this case are only apply to those employers who offer enhanced maternity pay.  This principle would also only be likely to apply when mother and father both work for the same employer.  It is important to note that the decision of the Employment Tribunal in this case is not binding on future Tribunals but it may be persuasive. It may also be appealed.

What do you need to be doing now?

Consider carefully yours or your company’s approach to shared parental leave pay. Should your policy be amended to ensure it does not discriminate?

These notes have been prepared for the purpose of an article only. They should not be regarded as a substitute for taking legal advice.