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Is there a sex discrimination risk in offering enhanced maternity pay? And other strange questions.

Background

The introduction of Shared Parental Leave (SPL) was met with widespread acclaim by parents upon its introduction in April 2015. The move, which allows mothers to curtail up to 50 weeks’ maternity or adoption leave and instead opt into SPL for both parents, was designed to “challenge the old-fashioned assumption that women will always be the parent that stays at home” (Nick Clegg).

As employers rushed to draft their SPL policies one particular issue came to light. What happens with regards to pay where an employer already offers enhanced maternity leave to mothers? Would it be discriminatory if such enhanced terms were not mirrored under the SPL offering?

The Government thought they had the answer. Under the Children and Families Act 2014, which implemented SPL, it was clear that such payments could be paid at the usual statutory rate (currently £140.98 per week). Employers were further referred to Government technical guidance which confirmed that employers were not required to mirror any enhanced maternity pay structure. Unfortunately, this has now found to be wrong by an Employment Tribunal.

In Ali v Capita Customer Management Limited, Mr Ali’s partner suffered from post-natal depression. Under her Doctor’s advice she requested to return to work after her two weeks’ compulsory maternity leave ended. As a result, Mr Ali applied for SPL as a primary caregiver to the child and was told that it would be paid at the statutory rate. Mr Ali raised a grievance internally, questioning why he was only to be paid the statutory rate, whereas a mother on maternity would be paid the company’s enhanced rate of a further 12 weeks’ full pay. The grievance was rejected and Mr Ali brought an Employment Tribunal claim for direct sex discrimination.

At the Hearing, the Tribunal found that Capita had directly discriminated against Mr Ali because of his sex. In allowing Mr Ali’s argument that a mother on maternity leave should be allowed to be used as a comparator, the Tribunal questioned why, in 2016, mothers should have any exclusivity to enhanced pay beyond the 2 weeks of compulsory maternity leave provided to the mother as a result of childbirth. In a society where men are now being encouraged to play a more family friendly role in the upbringing of their children, any choice about who undertakes that role “should be free of generalised assumptions that the mother is always best placed to undertake that role and should get full pay because of that assumed exclusivity”.

This judgment goes against the Government understanding of how SPL can be implemented.  It also conflicts with previous case law on the topic, namely the recent Employment Tribunal case of Hextall v Chief Constable of Leicestershire, in which it was decided that such a method of implementation was not sex discrimination.

In the opinion of the writer the latest case of Ali has been decided wrongly. Allowing a male employee on SPL to use a female comparator on maternity leave cannot be correct. The correct comparator, for the basis of a direct sex discrimination claim has to be a female employee on SPL. In addition, more favourable treatment of employees in connection with pregnancy or childbirth is specifically allowed under the Equality Act 2010. Whilst it is acknowledged that any such treatment must not go “further than necessary”, European case law has ruled that maternity pay up to 14 weeks is reasonable and therefore cannot be direct discrimination.

It is believed that both the Hextall and Ali cases have been appealed to the Employment Appeal Tribunal.  They will likely be heard together in early 2018.

What should you be doing now?

At the moment, in the absence of any EAT decision, we do not have a binding decision as to how shared parental leave pay should be applied. It is likely therefore that any further cases due to be heard in the Employment Tribunal will be stayed until the EAT case is heard in early 2018. It will only be following this judgment that we will be sure exactly how UK employers should implement payments in relation to SPL.

What does this mean for your business?

Whilst it is easy to see why the case of Ali has sent alarm bells ringing amongst employers, it is not advised that employers hit the panic button and start amending enhanced maternity policies at this stage. We will be keeping a close eye on any developments in this matter and will keep you updated via these monthly blogs and also on our twitter feed @bpe_employment

A link to Tribunal judgment can be found here

 

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

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