Lucy Lewis March 11 2020 Failing to enhance pay for shared parental leave is not sex discrimination – permission to appeal refused Lewis Silkin | Employment & Immigration - United Kingdom Lucy Lewis Employment & Immigration BackgroundFactsCourt of Appeal decisionImplications for employersThe Supreme Court has refused permission to appeal in Chief Constable of Leicestershire Police v Hextall. This means that the law remains as set out in the Court of Appeal's judgment, which stated that failure to enhance pay for shared parental leave (SPL) was neither indirect discrimination nor a breach of equal pay rights.BackgroundThe system of SPL allows parents to share leave between them for the purposes of caring for their new baby through the mother shortening her maternity leave.(1)It is relatively common for employers to pay enhanced pay to mothers on maternity leave, but less common to enhance pay for parents taking SPL. Hextall considered the argument that it is indirect sex discrimination or a breach of equal pay rights to pay different amounts for maternity leave and SPL.Indirect sex discrimination occurs when an employer has a provision, criterion or practice which applies to everybody, but results in one sex being put at a disadvantage. This type of discrimination can be justified. Equal pay requires men and women to receive equal pay and other contractual terms for doing equal work, by implying a sex equality clause into contracts of employment.Facts Leicestershire Police paid 18 weeks' enhanced maternity pay to mothers on maternity leave but only paid statutory pay to parents taking SPL. Mr Hextall took 14 weeks' SPL in the period that, if he had been a woman on maternity leave, would have entitled him to full pay.The Employment Tribunal found that this was neither direct nor indirect sex discrimination. Hextall appealed the finding of no indirect sex discrimination to the Employment Appeal Tribunal (EAT), which held that the Employment Tribunal had not properly considered the legal test (for further details please see "Failing to enhance pay for shared parental leave is not sex discrimination"). The EAT also rejected the argument that this was really an equal pay claim.Court of Appeal decisionThe case then went to the Court of Appeal, which ruled that there had been no indirect sex discrimination or unequal pay due to the following reasons:This was an equal pay claim rather than a discrimination claim. All contractual terms relating to pregnancy and giving birth had not been available to Hextall because he is not a woman. A sex equality clause would give him a comparable term with the same rights to leave and pay to care for a newborn child. However, crucially, a sex equality clause applies no contractual terms giving women special treatment in connection with pregnancy or childbirth. Maternity leave is part of this special protection, so the equal pay claim must fail.Claims for equal pay and sex discrimination are mutually exclusive. If something is properly characterised as an equal pay claim, it cannot also be indirect sex discrimination. This meant that Hextall's indirect discrimination claim could not be considered because the Court of Appeal had found that it fell within the scope of equal pay law.The Court of Appeal went on to find that the indirect discrimination claim would have failed anyway. First, the provision, criterion or practice was the application of the contractual provisions relating to SPL, so the pool for comparison should not include birth mothers on maternity leave because they are in a different situation. This meant that men were not caused a particular disadvantage, because women on SPL were also limited to statutory pay. Second, any indirect discrimination could be justified in any event as special treatment of mothers on maternity leave. Although this special treatment exemption is missing from the indirect discrimination provisions in the Equality Act, the Court of Appeal regarded this as an error by Parliament because the exemption is included in EU law and previous UK legislation.Implications for employersThe Supreme Court's refusal to give permission to appeal means that the Court of Appeal's decision is the definitive position for the time being. This is good news for employers, as it establishes that it is lawful to enhance maternity pay but to provide statutory pay only for SPL. The Court of Appeal took the position that maternity leave provides special protection for mothers after giving birth, meaning that it is always permissible to treat this differently from SPL.Notably, Ali v Capita, which had been joined with Hextall's case, was not being appealed. In Ali, the Court of Appeal had found that it was not direct discrimination to fail to enhance pay for SPL, because the correct comparator for a man on SPL is a woman on SPL – and everyone on SPL is treated the same. This also remains the law.So, are employers now safe to enhance only maternity pay without the risk of a discrimination claim? The answer is yes in most cases, but there may still be some risk where the enhanced pay lasts for all or most of the period of maternity leave.Under EU law, the minimum maternity leave period is 14 weeks. The United Kingdom has chosen to extend this to 52 weeks. There may still be an argument that the purpose of maternity leave ceases to be about the protection of the health and wellbeing of the mother after a certain period. This was not fully considered by the Court of Appeal because both Mr Ali and Hextall took SPL immediately or soon after their child's birth. The Court of Appeal referred to the purpose of statutory maternity leave in weeks three to 14 after childbirth, but it is unclear whether the judgment definitively establishes that the full 52 weeks' leave is for special protection of women after giving birth.It is perhaps disappointing for some that the Supreme Court has turned down the opportunity to address important issues around equal pay, gender equality and the purpose behind SPL. The details for this reasoning are unclear, but generally it is because the Supreme Court considers that the appeal does not raise an issue of sufficient public importance. Ultimately, this looks like a political question that only Parliament can resolve. Recognition of the special position of women after childbirth is important, but so is encouraging a more equal sharing of childcare between men and women. The limited pay available for SPL is one of the suggested reasons for its relatively low take-up so far.There continues to be political pressure in the area of family-friendly rights. The Conservative party's election manifesto said that it would look at ways to make it easier for fathers to take paternity leave. The previous government's consultation document Good Work Plan: Proposals to support families set out a variety of proposals, including a new requirement for employers to publish their family-related leave and flexible working policies. It also asked questions about whether pay for SPL should be enhanced. Although that consultation closed in 2019 and there has been no further word from the current government, it looks like any future changes to these rights will be driven by the politicians rather than the courts.For further information on this topic please contact Lucy Lewis at Lewis Silkin by telephone (+44 20 7074 8000) or email ([email protected]). The Lewis Silkin website can be accessed at www.lewissilkin.com. Endnotes(1) Further information is available here.