In RE v Praxair MRC SAS the European Court of Justice has ruled that the calculation of compensation payments for dismissal and redeployment of an employee on a full-time contract, who was on part-time parental leave (as permitted under French law), must be carried out on the basis of the full-time salary. Calculating these payments based on reduced pay during parental leave would be contrary to the Framework Agreement annexed to the Parental Leave Directive and potentially indirect sex discrimination, given that parental leave is overwhelmingly taken by women.

Although there is no right to part-time parental leave in the UK, the ruling suggests that EU law would require benefits such as redundancy pay or holiday pay to be calculated on the basis of the individual’s normal salary, ignoring any periods of parental leave in which pay is reduced or suspended. The same might apply if employees are permitted temporarily to reduce their hours and pay for reasons of childcare, before returning to their previous working pattern.