Lucy Lewis May 23 2018 Failing to enhance pay for shared parental leave may be indirect sex discrimination Lewis Silkin LLP | Employment & Immigration - United Kingdom Lucy Lewis Employment & Immigration BackgroundFactsDecisionCommentIn Hextall v Chief Constable of Leicestershire Police the Employment Appeal Tribunal (EAT) indicated that enhancing maternity pay, but not pay for shared parental leave (SPL), may give rise to indirect sex discrimination claims by fathers. This follows the April 2018 EAT decision in Capita Customer Management Ltd v Ali that failure to pay a father enhanced pay for SPL was not direct sex discrimination (for further details please see "Failure to pay father full pay for shared parental leave is not sex discrimination").BackgroundThe SPL system allows parents to share leave between them for the purposes of caring for their new baby. The regime works by shortening the mother's maternity leave, meaning that the amount of SPL and pay available is reduced by any time spent by the mother on maternity leave.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.FactsLeicestershire Police paid 18 weeks' enhanced maternity pay to mothers on maternity leave, but paid only statutory pay to parents taking SPL. Mr Hextall took 14 weeks' SPL in the period that, had he been a woman on maternity leave, would have entitled him to full pay. Hextall claimed that this amounted to both direct and indirect sex discrimination.The employment tribunal held that it was neither direct nor indirect sex discrimination. Hextall appealed only the finding of no indirect sex discrimination to the EAT.Indirect sex discrimination occurs when an employer has a provision, criterion or practice (PCP) which applies to everybody but results in one sex (in this case, men) being disadvantaged. Unlike direct discrimination, employers can justify indirect discrimination.In Hextall the PCP was that Leicestershire Police paid only statutory pay to parents taking SPL. The employment tribunal held that this PCP did not disadvantage men because the same amount was paid to men and women on SPL. Instead, it opined that Hextall's true case was that men were disadvantaged not by the PCP, but rather by the fact that they cannot get pregnant, which does not constitute indirect sex discrimination.DecisionThe EAT held that the employment tribunal had not properly considered the test for indirect discrimination, holding that the purpose of indirect sex discrimination is precisely to consider whether men might be disadvantaged in circumstances where men and women appear to be treated the same (in this case, by receiving the same pay during SPL). The EAT remitted the case to a different employment tribunal to consider whether men were disadvantaged by the PCP.Although the EAT reached no decision, it provided some helpful guidance. It summarised Hextall's claim that there was a disadvantage because a man is "proportionately less likely to be able to benefit from an equivalent rate of pay when taking leave to act as the primary carer for his child to that received by a woman on maternity leave". This is because men must take SPL, while women who have given birth can choose to take maternity leave or SPL.In considering whether men have suffered a disadvantage, the tribunal will need to make a comparative assessment between men and women. To do this, it must determine who should be in the pool for making the comparison. Leicestershire Police had asserted that women on maternity leave should be excluded from the pool, but the EAT rejected that position. It held that the pool for comparison should include employees with a present or future interest in taking leave to look after a newborn child.The question of who should be in the pool for comparison is likely to be the most difficult issue before the tribunal. The EAT referred to employees taking leave "to look after a newborn child"; however, in Capita the EAT was clear that although women on maternity leave will be looking after a child, the primary purpose of maternity leave (at least in the early stages) is the health and wellbeing of the mother, not childcare. Therefore, a mother taking maternity leave may not be doing so "to look after her newborn child", but rather to safeguard her own health. This gives rise to arguments that some women on maternity leave should be in the pool for comparison, while others should not. If this is the employment tribunal's conclusion, creating legal certainty (which is much needed in this area) is likely to be problematic.Although the EAT referenced this challenge in its judgment, it also suggested that the appropriate time to deal with the difference in circumstances between women taking maternity leave and men taking SPL was when the employment tribunal considers whether an employer can justify indirect discrimination.CommentIndirect discrimination was always expected to prove a much greater challenge to employers paying different rates of pay to women on maternity leave and parents taking SPL. Unfortunately, the EAT has not resolved this issue, and a period of uncertainty is likely to remain while the employment tribunal considers whether men are in fact disadvantaged.Employers that pay different rates for maternity leave and SPL should consider (and record) their justification for doing so. Based on the EAT's conclusion in Capita, justification should be easier if the period of enhanced maternity pay is shorter, because in the period following birth, a mother is likely to be recovering (and may be breastfeeding), and the employer can assert that it does not want her to compromise her health and feel rushed to return to work for financial reasons.The point at which maternity leave shifts from being about the health and recovery of the mother to being about care for the child is unresolved. In Capita the EAT suggested that this may occur after the 14-week period protected by the Pregnant Workers Directive. It also referred to the suggestion made by Working Families, which intervened in the case, that the shift may occur at 26 weeks.Justification has also been upheld where the period of paid maternity leave is far longer. In Shuter v Ford Motor Company the employment tribunal accepted that paying women on maternity leave for one full year in order to recruit and retain them in a male-dominated workforce was a valid justification. Employers with a long period of enhanced maternity leave may wish to consider that decision.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.