Two recent employment tribunal cases have reached different conclusions on whether the failure to pay fathers an enhanced rate during a period of shared parental leave (SPL) amounted to discrimination, in circumstances where mothers taking maternity leave were paid an enhancement. In this law-now we consider the impact of these cases. Given the uncertainty we recommend a watching brief, rather than a policy change at this stage.

Background

Prior to the introduction of SPL in April 2015, we received a number of queries from employers about replicating benefits under their SPL policies, where enhanced maternity pay was offered to mothers. Although the government Technical Guidance stated that there was no legal obligation to match enhanced rates of pay for parents taking SPL, many commentators considered that there was potential for a discrimination claim by men. That risk was most likely to arise in the form of an indirect discrimination claim. To minimise risk employers were encouraged to identify reasons for not introducing enhanced rates for Shared Parental Pay (SPP), which in the event of a challenge would form the basis of an objective justification defence.

What is interesting about the most recent SPL case is that the father successfully argued that his employers’ failure to pay him at the enhanced rate amounted to direct discrimination, which as a matter of law cannot be justified.

Ali v Capita Customer Management Ltd

In Ali the claimant wanted to take SPL after his wife was diagnosed with post-natal depression and was advised by her GP to go back to work. Capita paid enhanced maternity pay for the first 14 weeks of leave and enhanced paternity pay for 2 weeks followed by statutory SPP. The claimant asked to be paid the same higher rate as a woman on maternity leave. After his grievance was rejected he issued proceedings claiming both direct and indirect discrimination. In relation to the latter, he argued that the provision criterion or practice (PCP) that put men at a disadvantage involved his employer’s maternity policy, which the tribunal considered could not form the basis of a PCP as it was not gender neutral. It is perhaps regrettable that the PCP was not framed in a different way relating to the impact the SPL policy had on men. In the earlier case of Shuter v Ford Motor Company, (a case concerning Additional Paternity Leave – but involving similar arguments) the tribunal accepted that a PCP of paying enhanced pay to women on maternity leave was a PCP which all men, and some women, could not comply with and was therefore indirectly discriminatory. The issue then turned on Ford’s justification, and on the facts of the case the tribunal accepted Ford’s arguments and rejected the claim.

In contrast, in Ali the legal argument focussed on direct discrimination, and unlike the Hexall case below, the tribunal only briefly dealt with the issue of the correct comparator. The tribunal ruled that the claimant could compare himself to a female employee who was taking leave (but did not specify what type of leave) to care for her child although this would not apply until after the 2 week compulsory maternity leave period.

The tribunal also rejected the argument put forward by the employer that s.13(6)(b) (the special protection afforded to women on maternity leave which allows more favourable treatment) could shield an employer from a challenge to enhanced maternity pay, since the issue after the first 2 weeks was about caring for the child – it was not special treatment in connection with the mother’s pregnancy or childbirth. The tribunal accepted that after 2 weeks the government had offered parents the option of choosing who should care for the child: that the primary carer under SPL could therefore be the father or the mother. The claimant was also successful in a number of his complaints regarding victimisation after raising his grievance and his subsequent stress related absence.

The tribunal seem to have been strongly influenced by the personal circumstances of the couple in this case where medical evidence had said the mother should go back to work, and the father was arguing that this leave was necessary to enable him to be the primary caregiver. They did not suggest that the respondents’ policy on SPL should have been amended for everyone, but rather that any complaint should have been considered on a case-by-case basis which would have prevented any discriminatory treatment.

Hextall v Leicestershire Police

Hextall involved similar facts: a father who was not paid enhanced pay during a period of shared parental leave. In Hextall both the indirect discrimination and the direct discrimination claims by the father were dismissed because of the comparator point, i.e. that a man taking SPP cannot compare himself with a women taking maternity leave because there is a material difference. The tribunal ruled that the correct comparator was a female same sex partner taking SPL after her partner or wife had given birth.

In contrast to Ali, the tribunal also ruled that the special protection afforded to women on maternity leave in s.13 (6)(b) applied here since maternity leave and pay are by definition linked to pregnancy or childbirth. Accordingly this fell within the scope of the exception because this special treatment was reasonably necessary to compensate them for the disadvantages occasioned by their condition.

Although the tribunal dismissed the indirect discrimination claim because of the comparator point, the tribunal said that in case they were wrong on this, they would consider whether the Police Force could objectively justify their decision. The tribunal determined that the decision had been made purely because of cost, and this was not sufficient to justify discrimination. As such, had the claim of indirect discrimination been made out, the Police Force would of been unable to justify their actions.

Impact for employers

Both of these cases were first instance decisions, and are not binding on other tribunals. We would not recommend that employers change their approach based only on these cases.

  • Employers should keep a watching brief over this issue. If the EAT were to endorse the reasoning in Ali that the correct comparator is a woman on maternity leave, and that SPL becomes detached from pregnancy and childbirth, then this would give claimants the ability to successfully claim direct discrimination, to which there is no defence. A change of approach would therefore be required. There is some force in this argument taking into account European cases which involve similar but not identical points, which were not mentioned in Ali.
  • It seems likely that Ali will be appealed, and while certain parts of the argument are persuasive, it is perhaps disappointing that less time was spent considering the comparator and this reasoning seems vulnerable to legal challenge.

  • The risk of an indirect discrimination claim continues to pose a threat to employers although Hextall would indicate that there may be a way of meeting a claim by disputing that a woman on maternity pay is the correct comparator.

  • In relation to objective justification, the tribunal in Hextall were dismissive of the employers reasons for not introducing enhanced rates for SPL, and made a finding a fact that the real reason boiled down to cost “ and cost per se does not justify the perpetuation of otherwise unlawful discrimination. An employer cannot be heard to say “we can’t afford not to discriminate.”

  • While we await clarity from the EAT, if a request does arise from a man asking for an enhanced level of pay to match maternity pay we recommend that employers consider individual circumstances and take advice.