An employment tribunal has ruled that an employer was not obliged to provide enhanced occupational pay during Additional Paternity Leave (APL) in circumstances where they also provide a generous enhancement to women on maternity leave.
As a first instance decision, Shuter v Ford Motor Company is not binding, and it was clear it turned quite heavily on its own facts. Nevertheless, it provides a helpful indication of how a tribunal will approach the failure to pay enhanced payments to fathers. This is particularly relevant for employers finalising their Shared Parental Leave (SPL) schemes ahead of the changes due to take place for babies born on or after 5 April 2015.
The claimant, Mr Shuter, took APL from 15 July to 6 December 2013, after his partner returned to work from maternity leave. During APL, Ford paid Mr Shuter the statutory rate of pay, which was the lesser of £136.78 per week or 90% of average earnings.
At the same time Ford also operated an enhanced maternity pay scheme, in which mothers were paid 100% of their basic pay for the 52 weeks of maternity leave. This difference meant that Mr Shuter lost approximately £18,000 compared to a woman receiving enhanced maternity pay.
Mr Shuter lodged a claim for direct and indirect discrimination based on this difference in pay between APL and maternity leave. The direct sex discrimination claim was dismissed on the basis that Mr Shuter had chosen the incorrect comparator in identifying a female employee who had taken maternity leave. The correct comparator would have been a female employee applying for APL, i.e. the partner of a woman who had given birth. In this situation Ford would have paid the female employee the same as Mr Shuter. Therefore there was no direct discrimination as both men and woman were paid the same on APL.
The indirect discrimination claim also failed. The tribunal did not accept Mr Shuter’s argument that a number of European cases had broadened the concept of maternity leave after 20 weeks to something more akin to child care leave; notably in Roca Alvarez, where a Spanish father successfully argued that a national law which did not enable him to take time off for bottle feeding his child was discriminatory, as it was only available to mothers. The CJEU said that the provision was not about supporting the biological needs of the mother but rather about time off to support the child and balancing family and work.
Mr Shuter argued that the provision, criterion or practice (PCP) that led to indirect discrimination was “the practice/policy of paying woman basic pay when on leave beyond 20 weeks after the birth of their child when looking after their child.” The tribunal found that this was a discriminatory policy. On considering whether it was justified however, Ford successfully argued that this PCP was necessary in order to achieve a legitimate aim, which was to increase the number of woman employed by Ford, which had a male dominated workforce.
Many employers may struggle to find similar evidence. Ford was able to provide detailed records of its efforts to increase the number of female employees in the workforce. It had set a target that its workforce was to be 25% female by 2005. A Maternity Working Group had been set up in 2000, and recommended enhanced maternity leave pay as a way to increase “the Company’s ability to recruit and retain more female employees.” Although Ford were well behind their target, they were able to provide figures that demonstrated an increase in the number of female employees as a percentage of the total workforce, as well as an increase in the number of female employees in managerial roles.
The tribunal noted that Parliament did not intend to change the nature of maternity leave by introducing APL, and that the Government’s advice to employers was that there was no requirement for APL pay to match any enhanced maternity pay. Therefore a difference in pay between the two types of leave could be justified, because the reasons for taking maternity leave and APL were different.
How might this affect arguments around Shared Parental Leave (SPL)?
This is the first reported case to look at a failure to pay enhanced rates to men in an APL context. While there are a number of differences between SPL and APL, the legal arguments are similar. Although there may still be scope to revisit the direct discrimination argument based on the European cases, it was rejected here and will require further guidance at appellate level before we have clarity on this point. This case would certainly suggest that the greatest risk from failing to pay men in these circumstances is a claim for indirect discrimination.
Shared Parental Leave: to pay or not to pay?
Employers who provide enhanced occupational maternity pay, but who choose not to provide a similar enhancement to parents taking SPL should (if they have not done so already) document why this decision is taken, and review the impact of the enhanced rate of maternity pay to support their reasoning. A legitimate aim, for example, may be to encourage more women to take a longer period of maternity leave. It would not be enough to identify the cost of paying parents under SPL as being too expensive (although this can be a factor provided there are additional reasons to supplement this point).
Anecdotally, we are aware that most employers have chosen to follow the Government’s guidance in the Modern Workplace consultation response (November 2012) that they are not obliged to pay enhanced rates to parents taking SPL: “Maternity Leave is a protected period, and companies are able to offer maternity benefits to women only. There is no legal requirement for companies to create occupational parental leave schemes.”