The Employment Appeal Tribunal (“EAT”) has decided that it is not sex discrimination to fail to pay full salary to a father taking shared parental leave, in circumstances where a mother taking maternity leave during the same period would have received full pay.

Background

The system of shared parental leave (“SPL”) allows parents to share leave between them for the purposes of caring for their new baby. This right applies to both opposite-sex and same-sex couples, and similar rights apply to couples who are adopting a child.

The regime works by the mother shortening her maternity leave, meaning that the amount of SPL and pay available is reduced by any time spent by the mother on maternity leave after the initial compulsory leave period. The compulsory maternity leave is two weeks in most cases (increased to four weeks for certain types of work). For more information, see our inbrief on SPL.

It is relatively common for employers to pay enhanced pay to mothers on maternity leave, but less common to enhance pay for SPL.

Facts of the case

Capita Customer Management (“Capita”) had various policies about pay for different types of family leave. Mr Ali took two weeks of paternity leave immediately after the birth of his baby. As his wife was unwell with post-natal depression and had been advised to return to work, Mr Ali asked to take SPL so that he could care for the baby.

Capita only paid basic statutory pay for SPL. Mr Ali was aware that female employees on maternity leave from Capita were entitled to 14 weeks at full pay and asked for the same treatment. When this was refused, Mr Ali submitted a grievance alleging sex discrimination, and then brought various claims in the Employment Tribunal (“ET”).

The ET decided that this treatment of Mr Ali did amount to direct sex discrimination. The initial compulsory maternity leave period of two weeks was specifically associated with recovery after childbirth, and so was unique to the mother. After this two-week period, however, Mr Ali could compare his treatment with that of a hypothetical female colleague on maternity leave.

The ET rejected Capita’s argument that the full 14 weeks of maternity leave were special treatment in connection with childbirth, which is an exception to sex discrimination under the Equality Act 2010. Mr Ali wanted to carry out a caring role which was not exclusive to the mother, and so equality of treatment required the same pay for carrying out the same role.

The EAT’s decision

Capita appealed this decision, and the EAT upheld this appeal on two main grounds. First, the ET had used the wrong comparator for Mr Ali’s claim. The correct comparator was a female employee who was taking SPL in order to care for her child – who would have been treated in exactly the same way as Mr Ali.

The EAT said that the purposes of maternity leave and SPL were not the same. The right to maternity leave is based on the EU Pregnant Workers Directive and its primary purpose is the health and wellbeing of the pregnant and birth mother.Rights to parental leave have the primary purpose of caring for the child. This means that a woman on maternity leave and a man taking SPL are not in comparable circumstances, because the purposes of the leave are different.

Turning to the EAT’s second ground, even if Mr Ali had been able to compare himself with a female employee on maternity leave, his claim could still not succeed. his was because the Equality Act allows special treatment to be given to a women in connection with pregnancy or childbirth. The EAT said that this exemption covers additional pay for a woman on maternity leave.

This meant that it was not direct sex discrimination to pay a woman on maternity leave more than a man taking SPL, even when the leave was being taken within the same short amount of time after the birth.

Implications

The ET decision in this case was potentially worrying for the many employers who have chosen to provide enhanced pay for maternity leave but not for SPL. As noted in our previous comment, there were various legal problems with the ET’s approach, which the EAT has addressed in its judgment.

As has been found in some other cases, a man on SPL simply cannot compare himself with a woman on maternity leave. The EAT has confirmed that the purposes of these two types of leave are different, and so they cannot be compared for the purposes of a direct sex discrimination claim.

Nonetheless, there are some remaining areas of uncertainty. The EAT based its decision on the difference purposes of the two types of leave, with maternity leave being primarily for the protection of the health and wellbeing of the birth mother. This is the underlying purpose of the Pregnant Workers’ Directive, but that only sets a minimum period of 14 weeks of leave. There is a question as to whether this purpose remains valid for longer periods of maternity leave.

The work-life balance organisation Working Families had intervened in the case, suggesting that after the initial 26 weeks of leave, “the purpose of maternity leave may change from the biological recovery from childbirth and special bonding period between mother and child. At that point it may be possible to draw a valid comparison between a father on shared parental leave and a mother on maternity leave.” The EAT’s judgment does not decide this point, but notes that a claim based on these facts “may well” give rise to a comparison.

In addition, there remains an alternative argument that this is indirect sex discrimination. A rule that enhanced pay is only paid for maternity leave rather than SPL will disadvantage both men and women, because both sexes can take SPL. But it will particularly disadvantage men, because they never have the option of taking maternity leave instead.

The difference with indirect discrimination is that the employer’s pay policy can potentially be objectively justified, which is not possible with direct discrimination. In the previous case of Shuter v Ford Motor Company, an ET accepted that the employer’s policy of paying full pay to women on maternity leave in order to recruit and retain them in a male-dominated workforce was a valid justification.

We are still waiting for the EAT’s decision in Hextall v The Chief Constable of Leicestershire Police, a case on a very similar point in which the ET decided there had been no sex discrimination. This may provide further guidance on this area.

In the meantime, it appears that employers are able to pay different rates of pay for maternity leave and SPL without a risk of a direct sex discrimination claim, at least during the initial 14 weeks of the leave period. The argument remains open that the purposes of maternity leave change after a longer period. Employers who pay enhanced maternity pay after the first 26 weeks of leave, but do not offer the same enhancement for SPL, may want to review this policy in light of the EAT’s comments.

Capita Customer Management Ltd v Alijudgment available here