Shared parental leave was launched in 2015 but the uptake has been relatively low. A common question that employers asked prior to its introduction was what approach they should take to shared parental pay. In particular, employers wanted to understand whether a male employee might succeed in a sex discrimination claim if he only received statutory shared parental pay in circumstances where a female employee taking maternity leave would receive enhanced maternity pay. The Government's view was that this would not be sex discrimination.
Most employment lawyers considered that the appropriate comparison should be with a female employee on shared parental leave and that, provided she would also only receive statutory pay, then this should not be discriminatory. Some employers decided to only pay statutory pay whereas others decided to be more generous and enhance shared parental pay to encourage its uptake.
We now have a clear steer on the discrimination question from the Employment Appeal Tribunal (EAT) in Capita Customer Management Ltd v Ali and another UKEAT/0161/17.
Mr Ali complained that as a male employee he was entitled to only two weeks' paid paternity leave following the birth of his child in April 2016, whereas a female employee would be entitled to 14 weeks' enhanced pay when taking maternity leave. Mr Ali alleged that he was deterred from taking shared parental leave; if he had been a female employee taking maternity leave he would have received 14 weeks' enhanced pay but his employer had told him that if he took shared parental leave for the 12 weeks after his ordinary paternity leave had come to an end, he would only receive statutory pay and not full pay for that leave. Mr Ali argued that as a man caring for his baby, he should be entitled to the same pay as a woman performing that role and claimed that the employer's practice in not providing for this amounted to sex discrimination.
Mr Ali brought a sex discrimination claim before the employment tribunal (ET).
Employment tribunal decision
The ET concluded that the employer's approach did amount to direct sex discrimination. It agreed that Mr Ali could compare his treatment with that of a hypothetical female comparator taking maternity leave to care for her child after the two week compulsory maternity leave period, even though he had not given birth (and his circumstances were therefore arguably different).
Mr Ali also successfully persuaded the ET that such a hypothetical female comparator would receive more favourable treatment and that he was deterred from taking the leave in comparison. Accordingly, he had been treated less favourably because of his sex. The ET therefore concluded that the mother was being paid more than the father would be entitled to for "performing the same role" and the reason for the difference in treatment was sex. Capita appealed the decision to the EAT.
Employment Appeal Tribunal decision
The EAT overturned the ET's decision. It held that the ET failed to have regard to the purpose of and reason for maternity leave and pay. Mr Justice Underhill explained that "Maternity pay is given not for performing a role but to enable the mother to take leave for her own health and wellbeing. That maternity leave and pay are provided not or not other than incidentally for childcare is illustrated by the fact that a pregnant woman is entitled to those maternity benefits before the birth of a child". Accordingly, the purpose of maternity leave and pay and shared parental leave and pay were different: the former was about more than just caring for a child.
It was held that Mr Ali had failed to establish that he had been treated less favourably than a hypothetical comparator and there was a material difference between him and his comparator. That difference was that Mr Ali was on shared parental leave for childcare reasons, whereas his hypothetical comparator was on statutory maternity leave for health and safety reasons.
A direct sex discrimination claim will fail if, in this context, a man cannot show he has been treated less favourably than an actual or hypothetical comparator whose circumstances are otherwise materially the same. As Mr Ali could not identify such a comparator, he could not succeed in a direct sex discrimination claim.
This case provides helpful clarification that it will not be direct sex discrimination for an employer to enhance maternity pay but not enhance shared parental pay. It therefore supports the position taken by employers who have decided not to enhance shared parental pay. Of course, employers would be at risk of a discrimination claim if they treated women and men taking shared parental leave differently.
While taking Capita's approach to shared parental pay is fairly common, the lack of enhanced shared parental pay is potentially one of the reasons why the uptake of shared parental leave has been low. Employers who want to provide genuinely family friendly workplaces and encourage the sharing of childcare responsibilities may want to consider enhancing shared parental pay. However, it should not be direct discrimination not to do so.
We are awaiting the EAT's decision in Hextall v Chief Constable of Leicestershire Police, where at ET level there was a contradictory outcome to the ET decision in Capita Customer Management Ltd v Ali and another. In Hextall v Chief Constable of Leicestershire Police however, Mr Hextall brought a claim for indirect sex discrimination. The decision will hopefully provide more clarification on this issue in respect of indirect sex discrimination.