According to a recent Tribunal decision, failure to pay a father enhanced shared parental pay when a mother is entitled to enhanced maternity pay is direct sex discrimination. We consider the implications for employers who pay enhanced maternity pay.
What the law says
Provided certain eligibility criteria are met, an employee can take Shared Parental Leave (SPL) of up to 50 weeks and Shared Parental Pay (ShPP) of up to 37 weeks. The weekly rate of pay for statutory ShPP and statutory maternity pay are the same. However, many employers provide women with enhanced maternity pay for part or all of their maternity leave period. In contrast, few employers have chosen to enhance ShPP.
Ali v Capita Customer Management Limited ET/1800990/16
Mr Ali was employed by Capita Customer Management Limited (Capita) following a TUPE transfer. Transferring female employees were entitled to enhanced maternity pay and male employees were entitled to two weeks' paternity leave on full pay. However, there was no enhancement of ShPP for either mothers or fathers employed by Capita.
Following the birth of his child, Mr Ali took two weeks' paternity leave on full pay. His wife suffered from postnatal depression and she was advised to return to work before the end of her maternity leave period to assist her recovery. Mr Ali asked Capita about his rights to time off to care for his child and was informed he was eligible for shared parental leave but that he would only be paid statutory shared parental pay.
Mr Ali brought claims against Capita for direct and indirect sex discrimination and victimisation for failure to pay enhanced ShPP. His case was that as a male employee he was entitled to only two weeks' paid leave following the birth of his child whereas a female employee was entitled to 14 weeks' enhanced pay. He argued that after the two week compulsory maternity leave period which the mother was required to take, either parent could care for the baby, which was the aim of the SPL regime. However, Mr Ali argued that he was put off taking SPL because he would only receive statutory ShPP and not an enhanced ShPP.
The Employment Tribunal upheld Mr Ali's claim that Capita's failure to pay enhanced ShPP, when it paid enhanced maternity pay, amounted to direct sex discrimination. The Tribunal concluded that it was possible to compare a man on SPL and a woman on maternity leave on the basis that paying enhanced maternity pay after the two week compulsory leave period did not amount to special treatment for women in connection with pregnancy and childbirth. The assumption that as a man caring for his baby, he was not entitled to the same pay as a woman performing that role, took away the choice he and his wife wanted to make as parents for their baby.
Uncertainty for employers
However, far from clarifying the position for employers, the Tribunal's decision adds confusion to the issue of whether employers should enhance ShPP. This is because the decision in Mr Ali's case is at odds with the earlier case of Hextall v The Chief Constable of Leicester Police. In this case the Employment Tribunal had decided that it was not discriminatory to offer enhanced maternity pay but only statutory ShPP. The Tribunal decided there was no valid comparison between a man on SPL and a woman on maternity leave, that the correct comparator was a woman on SPL and, as such, there was no less favourable treatment between a man or a woman on SPL.
What does this mean for employers?
There is no statutory duty on employers to match ShPP with enhanced maternity pay. However, employers are left in the uncomfortable position of having two conflicting Employment Tribunal decisions on whether a failure to enhance ShPP could amount to sex discrimination.
As these are both just first instance Tribunal decisions, there is no binding decision on whether an employer should pay enhanced ShPP if they pay enhanced maternity pay. We understand that both decisions are being appealed so hopefully some clarity on this issue should be provided by the Employment Appeal Tribunal.
In the meantime, where does this leave employers who provide enhanced maternity pay but only pay statutory ShPP? For those employers who wish to take a risk free approach enhancing pay for SPL so that it reflects any enhanced maternity pay would be the way forward. However, if the Employment Appeal Tribunal confirms that there is no valid comparison between a man on SPL and a woman on maternity leave then trying to reverse the policy would be problematic as arguably it could be a contractual right. As an alternative, some employers may respond by withdrawing enhanced maternity pay in order to avoid discrimination claims in respect of paying statutory ShPP only but this withdrawal could lead to claims in itself. Given the relatively low uptake of shared parental leave, many employers may simply be prepared to wait and see what future guidance is given before changing their current policies.