Employers can pay less for shared parental leave than maternity leave

An important Judgment confirms that organisations are able to pay less to those on shared parental leave than those on maternity leave.

In an important Judgment that will be reassuring for many employers, the Employment Appeal Tribunal has confirmed that organisations are able to pay less to those on shared parental leave than those on maternity leave. When shared parental leave was introduced many employers who paid enhanced contractual maternity pay chose to pay statutory rate only (currently £145.18 per week) rather than enhanced pay for shared parental leave. The Judgment in the case of Capita Customer Management Limited v Ali has confirmed that it is not discriminatory for an employer to do so.

The facts 

Mr Ali wanted to take the first fourteen weeks following his child’s birth off work to assist with care of the child. Two weeks would be paid as paternity leave, but as the next twelve weeks were to be shared parental leave he was told that he would receive statutory pay only. He complained that his female colleagues were entitled to full pay for fourteen weeks of maternity leave under the relevant policy. He brought a claim alleging that this was sex discrimination.

At the Employment Tribunal he was successful, although in another similar case a Tribunal held that doing so was not discriminatory. The employer appealed and the Employment Appeal Tribunal was asked to decide whether such difference of treatment was discriminatory. It has held that it is not. An employer is able to pay different rates for shared parental leave and maternity leave. An employee on shared parental leave cannot use someone on maternity leave as a valid legal comparison for a sex discrimination claim.

What does this mean for me?

Our experience is that many organisations who offer enhanced maternity pay have chosen not to offer enhanced shared parental leave pay. This Judgment is important and reassuring for those of you in this position, confirming that you do not have to enhance shared parental leave pay. You must treat everyone on shared parental leave the same and cannot distinguish between male and female employees on shared parental leave, but you can pay enhanced pay to those on maternity leave without it being unlawful discrimination.

This Judgment is not necessarily the end of the story. Almost inevitably this, or another, case will be heard by the Court of Appeal. It is therefore possible that the legal position may yet change. However, following this Judgment there is a clear position which is reassuring for the many of you who have not offered enhanced shared parental leave pay (whilst offering enhanced maternity pay).

Comment

The rationale for the Judgment relies upon the different reasons for maternity leave and shared parental leave. The EAT says that maternity leave and pay is there for the health and wellbeing of the mother (demonstrated by the fact that some of the maternity leave and pay can be taken before the child is born), whereas shared parental leave is provided to care for the child. This difference is why an individual on shared parental leave cannot compare themselves to someone on maternity leave, because the aims of each type of leave are intrinsically different. This is a clear rationale, but it certainly could still be challenged in any further appeal.

The uptake of shared parental leave has been lower than the Government had hoped and there is currently a campaign aimed at increasing awareness. However one obvious reason for the relatively low uptake is the limited pay available. The charity Working Families was allowed to argue in this case, and the EAT acknowledged, that the policy behind UK and European law had been to encourage participation of the father in the care of his child. However it has confirmed that how this aim is to be achieved needs to be decided by the Government and not by the Courts upholding this claim (or other equivalent claims).


If the content of this alert raises any issues for you, or you would like to discuss any provision you make for maternity or shared parental leave, please liaise with your usual contact in the Weightmans Employment, Pensions and Immigration team or speak to Phil Allen, Partner (phil.allen@weightmans.com)

Share on Twitter