Shared parental leave: Important judgment from the Court of Appeal
It is not discriminatory to pay men on shared parental leave less than an enhanced rate of pay available to a woman on maternity leave.
In the combined appeals of Ali v Capita Customer Management Ltd and Chief Constable of Leicestershire Police v Hextall, the Court of Appeal has confirmed that it is not discriminatory to pay men on shared parental leave (SPL) less than an enhanced rate of pay available to a woman on maternity leave.
The facts and issues
The central issue in these two appeals was whether it is unlawful discrimination on the basis of sex, whether direct or indirect, for men to be paid less on SPL than birth mothers are paid on statutory maternity leave. The Court of Appeal also considered whether such a disparity could form the basis of a successful equal pay claim.
In the first appeal, Mr Ali wanted to take the first fourteen weeks following his daughter’s birth off work to care for the child, as his wife had been diagnosed with post-natal depression and advised by her doctor to return to work. His first two weeks were paid as paternity leave, but the following 12 weeks were shared parental leave, paid at the statutory rate (which was much lower than Mr Ali’s usual rate of pay). He claimed this was direct discrimination on the grounds of sex, as his female colleagues were entitled to full pay for fourteen weeks of maternity leave.
In the second broadly similar appeal Mr Hextall, a police constable, took 14 weeks of SPL for which he received statutory pay only. However, he framed his claim slightly differently to Mr Ali, claiming indirect discrimination on the grounds that the ‘provision, criterion or practice’ (PCP) of ‘paying only the statutory rate of pay for those taking a period of shared parental leave’ placed men at a particular disadvantage in comparison to women.
In Mr Ali’s appeal, the Court of Appeal upheld the earlier decision of the Employment Appeal Tribunal (EAT) and found that no direct discrimination had occurred. The Court of Appeal confirmed that it was not appropriate for Mr Ali to compare himself to a woman on maternity leave. It reiterated that maternity leave and SPL are fundamentally different and serve different purposes (the former relating primarily to the health and wellbeing of the mother and the latter primarily to the care of the child). The Equality Act 2010 permits ‘special treatment’ of women in respect of pregnancy and childbirth, which covers enhanced maternity pay. The Court of Appeal rejected Mr Ali’s argument that this ‘special treatment’ should be restricted to the first two weeks of compulsory maternity leave.
The Court of Appeal also dismissed the second appeal. It held that Mr Hextall’s claim should have been brought as an equal pay claim, rather than a claim of discrimination, as he was effectively claiming that his contractual entitlement to paid leave was less favourable than that of his female colleagues. However, the Court of Appeal dispensed with this argument fairly quickly.
The basis of any equal pay claim is that the Equality Act 2010 implies a ‘sex equality clause’ into every contract of employment to ensure pay parity between men and women. However, it is clearly stated in the Equality Act that this principle does not prevent women receiving special treatment in relation to pregnancy and childbirth (and therefore would not make it unlawful for employers to pay an enhanced rate to mothers on maternity leave).
The Court of Appeal helpfully went on to think about Mr Hextall’s claim from the alternative angle, finding that he had not suffered indirect discrimination. Again, this conclusion was founded on the special status of maternity leave. To determine whether a PCP has an indirectly discriminatory effect, it is necessary to identify a ‘pool’ of people whose circumstances are the same as, or not materially different from, the claimant’s. The Court of Appeal held that women on maternity leave were in materially different circumstances to men (or women) on SPL and should be excluded from the comparison pool. When Mr Hextall was compared against other men and women taking SPL, he had received exactly the same rate of pay and had not suffered any disadvantage. In any event, the Court of Appeal held that any indirect discrimination in these circumstances would be a ‘proportionate means of achieving a legitimate aim’ (namely the ‘special treatment’ of mothers in connection with pregnancy and childbirth).
This much anticipated decision resolves legal uncertainty in this area (for now) and should reassure you if your organisation enhances maternity pay but pays for SPL at statutory rates. Remember that, while you can pay enhanced pay to those on maternity leave without it being unlawful discrimination, you must still treat everyone on SPL equally and cannot distinguish between male and female employees on SPL.
Both claimants have indicated that they would like to appeal to the Supreme Court, so this may not be the end of the line for this interesting case.
If you have any questions about your current parental leave policies and pay practices in light of this decision we would be happy to advise you.
Ben Daniel, firstname.lastname@example.org is head of Employment, Pensions and Immigration at Weightmans LLP. If you have any questions, please do not hesitate to contact Ben or speak to your usual Weightmans advisor.