Failing to enhance pay for shared parental leave is not sex discrimination – permission to appeal refused

Background

The system of shared parental leave (SPL) allows parents to share leave between them for the purposes of caring for their new baby through the mother shortening her maternity leave. For more information, see our Inbrief on SPL.

It is relatively common for employers to pay enhanced pay to mothers on maternity leave, but less common to enhance pay for parents taking SPL. The Hextall case considered the argument that it is indirect sex discrimination or a breach equal pay rights to pay different amounts for maternity leave and SPL.  

Indirect sex discrimination occurs when an employer has a provision, criterion, or practice (PCP) which applies to everybody, but results in one sex being put at a disadvantage. This type of discrimination can be justified.  Equal pay requires men and women to receive equal pay and other contractual terms for doing equal work, by implying a “sex equality clause” into contracts of employment.

Facts of the case

Leicestershire Police paid 18 weeks of enhanced maternity pay to mothers on maternity leave but only paid statutory pay to parents taking SPL. Mr Hextall took 14 weeks of SPL in the period that, if he had been a woman on maternity leave, would have entitled him to full pay.    

The Employment Tribunal (ET) found that this was neither direct nor indirect sex discrimination. Mr Hextall appealed the finding of no indirect sex discrimination to the Employment Appeal Tribunal (EAT), which held that the ET had not properly considered the legal test. The EAT also rejected the argument that this was really an equal pay claim.

Court of Appeal’s decision

The case then went to the Court of Appeal (CA), which ruled that there had been no indirect sex discrimination or unequal pay. As explained in our previous article, this was for the following reasons:

• This was an equal pay claim rather than a discrimination claim. All contractual terms which related to pregnancy and giving birth were not available to Mr Hextall because he is not a woman. A sex equality clause would give him a comparable term with the same rights to leave and pay to care for a newborn baby. But, crucially, a sex equality clause does not apply to contractual terms giving women special treatment in connection with pregnancy or childbirth. Maternity leave is part of this special protection, so the equal pay claim must fail.
• Claims for equal pay and sex discrimination are mutually exclusive. If something is properly characterised as an equal pay claim, it cannot also be indirect discrimination. This meant that Mr Hextall’s indirect discrimination claim could not be considered, because the CA had found that it fell within equal pay law.
• The CA went on to find that the indirect discrimination claim would have failed anyway. Firstly, the PCP was the application of the contractual provisions relating to SPL, so the pool for comparison should not include birth mothers on maternity leave because they are in a different situation. This meant that men were not caused a particular disadvantage, because women on SPL were also limited to statutory pay. Secondly, any indirect discrimination could be justified in any event as special treatment of mothers on maternity leave. Although this special treatment exemption is missing from the indirect discrimination provisions in the Equality Act, the CA regarded this as an error by Parliament because the exemption was included in EU law and in the previous UK legislation.

Implications for employers

The refusal of the Supreme Court (SC) to give permission to appeal means that the CA’s decision is the definitive position for the time being. This is good news for employers, as it establishes that it is lawful to enhance maternity pay but provide statutory pay only for SPL. The CA took the position that maternity leave provides special protection for mothers after giving birth, meaning it is always permissible to treat this differently from SPL.

It is worth noting that the case of Ali v Capita, which had been joined with Mr Hextall’s case, was not being appealed. The CA had found in that case that it was not direct discrimination to fail to enhance pay for SPL, because the correct comparator for a man on SPL is a woman on SPL - and everyone on SPL is treated the same. This also remains the law.

So, are employers now safe to enhance maternity pay only without the risk of a discrimination claim? We would say yes in most cases, but there may still be some risk where the enhanced pay lasts for all or most of the period of maternity leave.  

Under EU law, the minimum maternity leave period is 14 weeks. The UK has chosen to extend this to 52 weeks. There may still be an argument that the purpose of maternity leave ceases to be about the protection of the health and wellbeing of the mother after a certain period of time. This was not fully considered by the CA because both Mr Ali and Mr Hextall took SPL immediately or soon after their child’s birth. The CA referred to the purpose of statutory maternity leave in weeks three to 14 after childbirth, but it is unclear whether the judgment definitively establishes that the full 52 weeks of leave is for special protection of women after giving birth.

It is perhaps disappointing for some that the SC has turned down the opportunity to address important issues around equal pay, gender equality and the purpose behind SPL. We do not yet have details of the reasons for this, but generally it is because the SC considers that the appeal does not raise an issue of sufficient public importance. As noted in our previous article, ultimately this looks like a political question that only Parliament can resolve. Recognition of the special position of women after childbirth is important, but so is encouraging a more equal sharing of childcare between men and women. The limited pay available for SPL is one of the suggested reasons for its relatively low take-up so far.  

There continues to be political pressure in the area of family-friendly rights. The Conservative Party’s election manifesto said that it would look at ways to make it easier for fathers to take paternity leave. The previous government’s consultation document Good Work Plan: Proposals to support families set out a variety of proposals, including a new requirement for employers to publish their family-related leave and flexible working policies. It also asked questions about whether pay for SPL should be enhanced. Although that consultation closed last year and there has been no further word from the current government, it looks like any future changes to these rights will be driven by the politicians rather than the courts.

Chief Constable of Leicestershire Police v Hextall - CA judgment available here