Does an Employer have to enhance shared parental Pay?
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The answer is still uncertain….
The recent decision by the Employment Appeal Tribunal (EAT) in Capita Customer Management Limited v Ali provided welcome clarity on shared parental leave pay (“ShPP”) and whether it is directly discriminatory not to pay men enhanced ShPP in line with any enhanced maternity pay offered to women.
However, recent comments by the EAT in Hextall v Chief Constable of Leicestershire Police have muddied the waters on this issue again, as there now appears to be a risk that to not pay men enhanced ShPP in line with enhanced maternity pay may be indirectly discriminatory.
Employers have been faced with conflicting messages from the judgments so far on these two cases. In Ali, the Employment Tribunal found that it was directly discriminatory for Capita not to enhance ShPP when it did enhance maternity pay. However, this decision was overturned by the EAT. Later, in Hextall, the Employment Tribunal concluded that such a practice was not indirectly discriminatory either, since both men and women receiving ShPP were treated in the same way. However, following the EAT’s comments on the Hextall case, where it allowed the appeal on the grounds of the disparate impact that fathers have no choice but to take Shared Parental Leave (SPL) whereas mothers have the option of maternity leave at full pay, it seems likely this decision may go the other way after being remitted back to the Employment Tribunal.
To recap on the facts of the Ali case:
- – Following the birth of his daughter, Mr Ali indicated that he wished to take SPL. Capita confirmed Mr Ali was eligible for SPL but that he would only be entitled to statutory ShPP;
- – Mr Ali argued that he should receive the same enhanced pay as a female employee who was entitled to 14 weeks enhanced maternity pay following the birth of their child;
- – Mr Ali brought claims against Capita for direct and indirect sex discrimination and victimisation for failure to pay enhanced ShPP. In the first instance decision, the Employment Tribunal upheld Mr Ali’s claim of direct sex discrimination;
- – Capita appealed the Employment Tribunal’s decision and were successful in doing so.
The EAT concluded that Mr Ali should not be able to compare himself to a woman on maternity leave and found that the correct comparator was not a female employee on maternity leave but a female employee on SPL. As a result, Mr Ali could not be directly discriminated against because he was a man, as both men and women would be treated the same for the purposes of SPL.
In coming to its decision on the Ali case, the EAT considered European legislation (the Pregnant Workers Directive) which requires member states to provide a minimum of 14 weeks paid maternity leave for the health and wellbeing of the pregnant and birth mother. Conversely, European legislation (the Parental Leave Directive) makes no such provision of pay for parental leave which instead focuses on the care of the child.
However, it is interesting to note that the EAT did comment that the purpose of maternity leave for women may change after 26 weeks in that the focus of leave from that point onwards is less on their health and recovery after birth and more on the care of the child. In that regard, it may at least be possible after this point to draw a comparison between a father on SPL and a mother on maternity leave.
The argument in Hextall is being run on different grounds. Rather than claiming direct discrimination, Mr Hextall is claiming that the Leicestershire Police’s policy of enhancing maternity pay for the first 18 weeks but only paying ShPP for the same period amounts to indirect discrimination. Mr Hextall is arguing that the policy puts men at particular disadvantage as, unlike women, men do not have the option to take maternity leave to care for their child. If this argument succeeds, Leicestershire Police will need to be able to justify why they do not pay enhanced ShPP. At this point, it is likely that the argument put forward in Ali on the health and wellbeing of mothers in the early days of their maternity leave, will form a key part of this justification.
What does this mean for employers?
The Ali decision has been welcomed by employers, due to the beneficial financial implications of not having to offer enhanced ShPP to employees. However, the Hextall case has again created uncertainty for employers on this issue, as there may be a different route for employees to prove discrimination.
That said, this may be of little impact in practice as take up of SPL remains extremely low. According to statistics published earlier this year, even though 285,000 couples are eligible for SPL, the Department for Business, Innovations and Skills has indicated that uptake may be as low as 2%.
Further, is it unlikely that this figure will increase especially if employers are ultimately not obliged to offer any enhanced financial scheme to encourage men to take SPL. While we await the Hextall decision and further clarity from the Employment Tribunal, one thing these cases have achieved is to raise questions about whether the law as it currently stands is achieving its purpose of encouraging men to spend more time with their family.
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Author: Katie Craven of Shoosmiths LLP
This article is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given