An Employment Tribunal had held that an employer directly discriminated against a male employee by paying enhanced pay to women on maternity leave and statutory pay only to men on shared parental leave. The Tribunal took the controversial step of allowing the Claimant to compare himself to a woman on maternity leave, rather than confine him to a comparison with a woman on shared parental leave. They also held that after the compulsory two-week period, the purpose of maternity leave was detached from pregnancy and childbirth and so the special treatment derogation did not apply (Ali v Capita Customer Management Ltd).

Background

Direct and indirect discrimination

Direct sex discrimination occurs where, because of sex, a person treats another less favourably than others (section 13(1), Equality Act 2010 (EqA 2010)). However, there is a derogation to this general rule in relation to special treatment given to women in connection with pregnancy or childbirth (section 13(6)(b), EqA). This means that special treatment given on these grounds should be disregarded and a man cannot claim he has been treated less favourably than a woman because he has not received the same treatment. Any such special treatment should be proportionate i.e. limited to that which is reasonably necessary to remove the disadvantages caused by their condition.

Indirect sex discrimination occurs where the employer applies an ostensibly neutral provision, criterion or practice (a PCP) which puts persons of the claimant's sex at a particular disadvantage and which also puts the claimant at that disadvantage and the disadvantage cannot be objectively justified by the employer.

Shared parental leave and pay

Shared parental leave (SPL) and pay was introduced in 2015. Co-parents are able to share up to 50 weeks' leave and 37 weeks' pay. The pay rate for statutory shared parental pay (SSPP) is the same as statutory maternity pay (SMP) (save that SSPP is paid at a flat rate throughout and there is no enhancement to 90% of pay for the first 6 weeks as there is for SMP). There is no statutory requirement to equalise shared parental pay with any enhanced maternity pay package offered to female staff. The Government's view is that it is not unlawful for employers to differentiate, yet commentators have argued there is a risk that this would be discriminatory.

However, the limited case law on the subject so far has supported the Government's approach. In the case of Shuter v Ford Motor Company Ltd (a case concerning additional paternity leave (APL) and pay, the predecessor to SPL), an Employment Tribunal decided that it was neither directly nor indirectly discriminatory to pay a woman 100% of pay for 52 weeks of maternity leave and to pay a man statutory pay only for a period of APL. Similarly, in the case of Hextall v Chief Constable of Leicestershire Police an Employment Tribunal decided that it was not discriminatory to pay enhanced pay for maternity leave compared with statutory pay for shared parental leave.

In both Shuter and Hextall, the direct discrimination claims failed because the Tribunals rejected arguments that the male claimants on APL and SPL were entitled to compare themselves with women on maternity leave. Instead, the correct comparators were said to be a woman on APL (Shuter) or SPL (Hextall).

Facts

The Claimant began working for the Respondent following a TUPE transfer. Female transferring employees were entitled to an enhanced maternity pay package of 14 weeks' pay, followed by 25 weeks' SMP. Male transferring employees were entitled to 2 weeks' paid ordinary paternity leave and up to 26 weeks' additional paternity leave which was said "may or may not be paid".

After the birth of his daughter the Claimant took 2 weeks' ordinary paternity leave for which he was paid in full. He wanted to take additional time off and was told that he was eligible to take SPL (the system of leave which had replaced APL) and receive SSPP. The Claimant argued that he should be entitled to the same enhanced payments as the female transferring employees i.e. up to 14 weeks' full pay.

The Claimant went on to bring direct and indirect sex discrimination claims in the Employment Tribunal, arguing that the special treatment derogation under section 13(6)(b), EqA only applied in respect of the first 2 weeks of compulsory maternity leave. Thereafter, the parents were free to transfer the leave between them in any arrangement they chose. In other words, there was no material difference between a man taking SPL and a woman taking maternity leave after the expiry of the compulsory 2-week maternity leave period. After that point the purpose of the leave is childcare and no special treatment of women was warranted. The Claimant argued that the provision of statutory pay only to him for the following 12 weeks: "took away the choice that he and his wife wanted to make as parents for the baby" and "this was not a valid assumption to make in 2016".

The Respondent argued that the Claimant was not entitled to compare himself to a woman who had given birth and was on maternity leave. However, even if he was, the special treatment derogation applied and the treatment was proportionate given that the payment was confined to the minimum period of maternity leave provided for under the Pregnant Workers Directive 92/85/EEC.

Decision

The Employment Tribunal upheld the direct discrimination claim.

Interestingly, they departed from the approach taken in Shuter and Hextall and allowed the Claimant to compare himself to a woman on maternity leave (after the first 2 weeks' of compulsory maternity leave). The Tribunals in Shuter and Hextall had rejected the argument that a man on APL or SPL could compare himself to a woman on maternity leave:

  • In Shuter, the Tribunal's position was that there were substantial differences between a woman on maternity leave and a man on APL e.g. the fact that the woman had been pregnant, given birth and cared for the child since birth and was possibly still breastfeeding.
  • In Hextall, the Tribunal highlighted the significant differences between maternity leave and SPL including the fact that maternity leave can be taken before birth and the consent of the co-parent to take the leave is not required, whereas the opposite is true for SPL.

Having allowed a comparison between a man taking SPL and a woman taking maternity leave, they went on to find that the differential approach to pay was less favourable treatment because of sex. On the question of the derogation permitting special treatment, the Tribunal accepted that the purpose of leave after the first 2 weeks' of compulsory maternity leave was to care for the child, and this was not exclusively tied to the mother. The Tribunal said: "In 2016, men are being encouraged to play a greater role in caring for their babies. Whether this happens in practice is a matter of choice for the parents depending on their personal circumstances but the choice made should be free of generalised assumptions that the mother is always best placed to undertake that role and should get the full pay because of that assumed exclusivity".

The Tribunal concluded that the enhancement of maternity pay was not special treatment in connection with pregnancy or childbirth, meaning that the derogation did not apply.

The Tribunal dismissed the indirect discrimination claim on the grounds that the PCP relied on was the maternity policy. As this was not a gender neutral policy, there was no indirect discrimination.

It's worth remembering that the Tribunal in Shuter had conceded that if it could be shown that Parliament intended to detach maternity leave from that necessary to protect health and safety arising from the biological condition of pregnancy then the special treatment derogation would not apply since the purpose of the leave would be childcare alone.

However, the Tribunal in Shuter was not prepared to infer that Parliament had, in fact, intended to detach maternity leave from pregnancy or childbirth, because: (i) the APL regulations were silent on that point: (ii) the right to APL was not freestanding but required the mother to end her maternity leave when she was ready to return to work; and (iii) the Government's advice when APL was introduced was that there was no legal requirement to match enhanced maternity pay and additional paternity pay.

All of these same considerations apply in respect of SPL. Nevertheless, the Tribunal in this case was prepared to find that the purpose of maternity leave was childcare and had become detached from pregnancy and childbirth. We are now left with conflicting Tribunal decisions on this key issue, neither of which are binding. However, both Hextall and Ali are to be appealed and the EAT's decision will be binding.

Employers offering differential pay for maternity leave and SPL should follow these appeals and give consideration to their response if the EAT upholds this decision.

  • One option would be reduce enhanced maternity pay to statutory pay only, although this may be unacceptable from an employee relations perspective.
  • A more palatable option might be to equalise maternity pay and shared parental pay by reducing maternity pay and uplifting shared parental pay.
  • The final, but most expensive, option would be to uplift shared parental pay to match existing enhanced maternity pay rates.

Recent CIPD research has indicated that the uptake rates of SPL have been low, with only 5% of eligible fathers opting to take SPL. In light of this, some employers may feel that the cost of uplifting shared parental pay is a price worth paying to avoid discrimination complaints and become an "employer of choice".

Ali v Capita Customer Management Ltd