April 2015 saw the reshaping of family-friendly leave with the birth of Shared Parental Leave (SPL). 18 months on, as anticipated, the issue now coming before the tribunals is enhanced contractual pay. Can employers offer enhanced contractual pay to mothers/primary adopters but not to fathers/partners?

The Glasgow Employment Tribunal has recently awarded a new father almost £30,000 for sex discrimination as his employer offered enhanced contractual shared parental pay to mothers/primary adopters but not to fathers or mothers'/primary adopters' partners.

Here our employment and equalities experts consider the curious case of Mr and Mrs Snell and its potential impact for employers who offer enhanced shared parental or maternity pay.

Shared parental leave - recap

Shared parental leave is designed to encourage:

  • Sharing of "family" leave between working parents.

In very broad terms, mothers and adopters can choose to curtail maternity and adoption leave to opt in to shared parental leave. Shared parental leave doesn't replace existing maternity and adoption leave rights. Instead it enables mothers/adopters to elect to convert a portion of that leave, so that up to 50 weeks' leave and 37 weeks' pay can be shared between both parents; and

  • Flexibility for when the leave is taken

    Parents can apply for continuous or discontinuous periods of leave which they can take at the same time or separately up to the child's first birthday/anniversary of placement.

Pay

The default position in relation to Statutory Shared Parental Pay is that it is paid at the flat statutory rate - currently £139.58 per week. But what is the position for employers who offer enhanced contractual maternity pay?

The Government's view is that there is no legal requirement for employers to offer corresponding enhancements to shared parental pay. Employers are free to offer more generous enhanced arrangements if they wish, but are not obliged. Whether an employer who fails to match maternity pay enhancements will face a successful discrimination claim remains to be seen. It is likely to turn on the particular circumstances of the employer and the reasons for adopting the policy in question.

Women who are entitled to enhanced contractual maternity pay need to be clear about their contractual position. A woman could find herself financially worse off when converting from maternity leave attracting contractual pay to statutory shared parental leave and pay. What is clear, is that an employer cannot offer enhanced contractual shared parental pay to mothers only. If an employer chooses to offer enhanced contractual shared parental pay it must offer it to both mothers/primary adopters and fathers/ mothers' or primary adopters' partners.

The curious case of Mr and Mrs Snell

A father has been awarded almost £30,000 for sex discrimination after his employer offered him only statutory pay during shared parental leave while mothers were given full pay for the first 26 weeks.

Facts

In the case Mr Snell v Network Rail Infrastructure Limited, both Mr and Mrs Snell worked for Network Rail. In anticipation of the birth of their first child they wanted to take advantage of shared parental leave.

Mrs Snell planned to take 27 weeks' leave, after which Mr Snell planned to take 12 weeks. He later planned to change his request from 12 to 24 weeks.

Network Rail's Family Friendly Policy defined shared parental leave as "a period of up to 52 weeks of leave to be shared between mothers/primary adopter/surrogate parents and their partners".

Under Network Rail's Family Friendly Policy in force at the time the request was made, mothers were entitled to contractual shared parental leave pay being:

  • 26 weeks on full pay,
  • followed by 13 weeks' statutory pay,
  • followed by a further 13 weeks' unpaid.

However, fathers/mother's partners were only entitled to:

  • 39 [sic] weeks' statutory pay,
  • followed by a further 13 weeks' unpaid.

Unhappy with the pay disparity in the policy, Mr Snell filed a formal grievance, which did not resolve the matter and Mr Snell brought a claim for unlawful sex discrimination.

Judgment of the Glasgow ET

By the time of the hearing, Network Rail conceded that Mr Snell was indirectly discriminated against in relation to his sex by the application of their family friendly policy which put him at a particular disadvantage as a man, when compared with women during periods of shared parental leave. Network Rail failed to provide evidence to support its earlier contention that the policy was objectively justified as pursuing the legitimate aim of recruiting and retaining women in a male dominated workforce.

As to remedy, the tribunal awarded:

  • £6,000 injury to feelings
  • £16,130 future loss
  • £1,750 pension loss
  • £2,780 uplift for failure to follow the Acas Code of Practice
  • £460 interest
  • £1,200 tribunal fees

The £16,130 for future loss was calculated by deducting from Mr Snell's normal weekly pay the statutory pay rate resulting in a weekly loss of £672 multiplied by 24 weeks (his intended SPL period).

Why the case raises some curious questions

It is unsurprising that the tribunal concluded that a policy which offers enhanced contractual shared parental pay to mothers but not fathers amounted to unlaw sex discrimination. As we stated back in April 2015, The impending 'birth' of shared parental leave, an employer cannot offer enhanced contractual shared parental pay to mothers only. If an employer chooses to offer enhanced contractual shared parental pay it must offer it to both mothers/primary adopters and fathers/ mothers' or primary adopters' partners.

But some aspects of this judgment are rather curious.

Curious

The entire judgment is predicated on the basis that the 27 weeks of leave Mrs Snell intended to take was statutory shared parental leave rather than statutory maternity leave. As Mr Snell was intending to take leave only after Mrs Snell intended to stop taking leave, there was no need for her to go onto shared parental. She could have taken maternity leave for the first 27 weeks and elected to convert the remaining 25 weeks of the leave period to shared parental leave to enable her husband to take it.

Curiouser

Under the Equality Act 2010, the two weeks of leave taken by Mrs Snell immediately following the birth must have been compulsory maternity leave. It is not possible to convert compulsory maternity leave to shared parental leave. It is odd and disappointing that the tribunal did not address the question of whether Mrs Snell was in fact on maternity leave at some point.

What this case does not address is the much more difficult question of whether it is discriminatory for an employer to offer enhanced pay for mothers on maternity leave but only offer statutory pay to both mothers and fathers on shared parental leave. Can such differing policies be lawful? Under the Equality Act 2010, no account is to be taken of special treatment afforded to a woman in connection with pregnancy or childbirth. Government guidance is that there is no legal requirement for employers to offer corresponding enhancements to shared parental pay as enhanced maternity leave pay falls within the pregnancy/childbirth exception. But can maternity leave outside the compulsory period still be said to fall within the pregnancy/childbirth exception? At what point does leave relate to childcare shard by both parents rather than childbirth?

Curiouser and couriouser

Mothers and fathers do not have separate shared parental leave entitlements. Shared parental leave doesn't replace existing maternity leave rights. Instead it enables mothers to elect to convert a portion of their leave so that up to 50 weeks' leave and 37 weeks' pay can be shared between both parents.

In this case, Mr Snell's complaint was that the shared paternal leave pay provisions were different for mothers and fathers. However, Mr Snell was only intending to take the leave after his wife had used 27 weeks of the leave entitlement. Even if the policy had treated mothers and fathers equally, he still would only be entitled to statutory pay. Arguably, it is only the first 26 weeks of the 52 weeks of leave as a whole that attracted full pay, not the first 26 weeks as taken by the mother and the first 26 weeks as taken by the father.

Surprisingly this does not appear to have been argued before the tribunal. However, this may have been down to the drafting of the particular policy. Network Rail's policy clearly defined shared parental leave as a single period that could be shared between mother and fathers. However, the shared parental pay policy arguably treats the enhanced pay periods for the mother and the father as two separate independent periods. The policy gives fathers up to 39 weeks' statutory pay, when under statute mothers can only transfer up to 37 weeks' of their statutory maternity pay period. Clearly the tribunal treated the policy as giving each parent an independent enhanced pay period.

What does this all mean?

As regards Network Rail employees this was great news for Mr Snell, but bad news for other employees. Unsurprisingly, Network Rail has simply levelled down its shared parental leave pay for mothers and fathers so both are now only entitled to the statutory minimum.

Employment tribunals are 'non-binding' and as such do not set a precedent that future tribunals must follow. Nevertheless, it may be persuasive indicating how tribunals are likely to treat such claims.

Employers should

  • Ensure shared parental pay policies treat mothers/primary adopters and fathers/mothers' or primary adopters' partners equally.
  • Ensure maternity/adoption/parental/shared parental pay policies clearly set out that any enhanced pay periods are a single continuous period, unless intended otherwise. For example, if the father only starts shared parental leave after the mother has already taken 26 weeks of paid leave (whether with the same or a different employer), the father will only be entitled to the enhancement applicable in the 27th week of leave.
  • Consider whether to offer enhanced shared parental pay which mirrors any enhanced maternity pay policy. While this is still a 'grey' area, there are currently further cases pending before the tribunals challenging disparate polices as sex discriminatory. Ask yourself:
    • Will enhanced SPL pay assist in attracting and retaining talent in your organisation?
    • What are the potential discrimination risks if you offer enhanced maternity pay but not enhanced SPL pay?
    • What is the basis for any disparity, in other word, what is the legitimate aim being pursued?