The Employment Appeal Tribunal (EAT) has left open the possibility that not enhancing shared parental pay could be indirect discrimination on the grounds of sex.
In a judgment released last week in the case of Mr A Hextall v Chief Constable of Leicestershire Police, the EAT found errors in the way that the employment tribunal had dismissed Mr Hextall's claim for indirect sex discrimination. As a result, his appeal against the decision has been allowed and the case sent back to be heard again by a differently constituted employment tribunal.
The case was based on the fact that the police force employing Mr Hextall provided 18 weeks' full pay to mothers on maternity leave, whereas shared parental pay was paid at the statutory rate.
At employment tribunal level, Mr Hextall's claims of both direct and indirect sex discrimination were dismissed. He appealed to the EAT against the dismissal of his indirect discrimination claim.
A number of errors were identified in the tribunal's reasoning for rejecting Mr Hextall's indirect discrimination claim. This led the EAT to helpfully set out the necessary elements of a successful indirect discrimination claim:
1. Identify the provision, criterion or practice (PCP) relied upon
Here, the relevant PCP was the employer paying only the statutory rate of pay for those taking a period of shared parental leave.
2. Show that the PCP puts men at a particular disadvantage when compared with women
The argument was that while the rate of pay for shared parental leave was the same for both father and mother, it had a disparate impact on fathers because mothers have the option to take maternity leave paid at an enhanced level, whereas fathers do not have this choice. This would deter men from taking leave to care for a child because by staying at work they receive full pay, whereas taking shared parental leave means they would only receive the statutory rate of pay. In comparison, the majority of women in materially the same circumstances suffer no such disadvantage because they have a full-pay alternative available to them in the form of enhanced maternity pay, making the choice to take leave much easier for women.
3. Show a comparative disadvantage using a pool
To demonstrate a comparative disadvantage, the women with whom the men are compared must be in no materially different circumstances. To make this comparison, a logically relevant pool of comparators should be used.
In this case, the relevant pool was those police officers with a present or future interest in taking leave to care for their newborn child. Those with no such interest should be excluded.
4. Where a comparative disadvantage is made out it is then for the employer to show that the PCP is objectively justified
The employer must show that the PCP is a proportionate means of achieving a legitimate aim. Cost considerations alone will not justify a discriminatory PCP.
In contrast to the recent EAT decision in Capita Customer Management Ltd v Ali, which we reported on in April here, the EAT decision in Hextall has left open the possibility that not enhancing shared parental pay could be indirectly discriminatory. In the Ali case, the EAT held that paying enhanced maternity pay but not enhanced shared parental pay is not direct discrimination (at least for the first 14 weeks of leave as per the facts of that case).
Employers will want to consider the indirect discrimination risk when deciding their shared parental leave policy on pay, and in particular whether the potential disadvantage caused to men by paying statutory rates of shared parental pay only can be justified.
Contributor: Amy Whiting