Failing to enhance pay for shared parental leave may be indirect sex discrimination

Background

The system of shared parental leave (“SPL”) allows parents to share leave between them for the purposes of caring for their new baby.  The regime works by the mother shortening her maternity leave, meaning that the amount of SPL and pay available is reduced by any time spent by the mother on maternity leave. For more information, see our Inbrief on SPL here.

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.

Facts of the case

Leicestershire Police paid 18 weeks enhanced maternity pay to mothers on maternity leave but only paid statutory pay to parents taking shared parental leave.  Mr Hextall took 14 weeks shared parental leave in the period that, if he had been a woman on maternity leave, would have entitled him to full pay.   Mr Hextall claimed that that amounted to both direct and indirect sex discrimination. 

The Employment Tribunal held that it was neither direct nor indirect sex discrimination.  Only the finding of indirect sex discrimination was appealed to the EAT.   Indirect sex discrimination occurs when an employer has a provision, criterion, or practice (“PCP”) which applies to everybody but results in one sex (in this case men) being put at a disadvantage.  Unlike direct discrimination, it is possible for an employer to justify indirect discrimination.

In this case, the PCP was that Leicestershire Police only paid statutory pay to parents taking SPL.  The Employment Tribunal held that this PCP did not put men at a disadvantage because the same amount was paid to men and women on SPL.   The Employment Tribunal felt that Mr Hextall’s true case was that men were not disadvantaged by the PCP but disadvantaged by the fact they cannot get pregnant (and that was not capable of being indirect sex discrimination).

The EAT decision

The EAT held that the Employment Tribunal had not properly considered the test for indirect discrimination.  It held that the purpose of indirect sex discrimination was precisely to consider whether men might be disadvantaged in circumstances where men and women appear to be treated the same (in this case by receiving the same pay during SPL).  The EAT remitted the case to a different Employment Tribunal to consider whether men were in fact disadvantaged by the PCP.

Although the EAT did not come to a decision, it provided some helpful guidance.  The EAT summarised Mr Hextall’s case that there was a disadvantage because a man is “proportionately less likely to be able to benefit from an equivalent rate of pay when taking leave to act as the primary carer for his child to that received by a woman on maternity leave”.  That is because men have to take SPL whilst women who have given birth can choose to take maternity leave or SPL.

In considering whether men have, in fact, suffered a disadvantage, the Employment Tribunal will need to make a comparative assessment between men and women.  In order to do that, the Employment Tribunal must determine who should be in the pool for making that comparison.   Leicestershire Police had asserted that women on maternity leave should be excluded from the pool but the EAT rejected that position.  The EAT held that the pool for comparison should include police officers with a present or future interest in taking leave to look after a newborn child.

The question of who should be in the pool for comparison, is likely to be the most difficult issue before the Employment Tribunal.  The EAT language about the pool for comparison is interesting because it refers to police offers taking leave “to look after a newborn child”.   In last month’s EAT case Capita Customer Management Ltd v Ali  (see our comments on this case here), the EAT were very clear that although women on maternity leave will necessarily be looking after a child, the primary purpose of maternity leave (at least in the early stages) is the health and well-being of the mother and not childcare. Therefore, a mother taking maternity leave may not be doing so “to look after her newborn child” but to safeguard her own health.  That potentially gives rise to arguments that some women on maternity leave should be in the pool for comparison but others not.  If that is the Employment Tribunal’s conclusion, creating legal certainty (something that is much needed in this area) is likely to be problematic.

Although the EAT made reference to this challenge in its judgment, it also suggested that the appropriate place to deal with the difference in circumstances between women taking maternity leave and men taking SPL was when the Employment Tribunal considers whether an employer can justify indirect discrimination.

Implications

We had always anticipated that indirect discrimination would prove a much greater challenge to employers paying different rates of pay to women on maternity leave and parents taking SPL.  It is unfortunate that the issue has not been resolved by the EAT and there is likely to be a period of uncertainty whilst the question of whether men are, in fact, disadvantaged is considered by the Employment Tribunal.

However, it would be sensible for employers who pay different rate for maternity leave and shared parental leave to consider (and record) their justification for doing so.  Based on the EAT conclusions in Capita, justification should be easier the shorter the period of enhanced maternity pay.  That is because in the period following birth, a mother is still likely to be recovering (and may be breastfeeding) and an employer will be able to assert that it does not want her to compromise her health and feel rushed to return to work for financial reasons. 

The point at which maternity leave tips from being about the health and recovery of the mother to being about care for the child is unresolved.  The EAT in Capita suggested that may occur after the 14 week period protected by the Pregnant Workers Directive.  It also specifically referred to the suggestion made by Working Families, which intervened in this case, that the tipping point might be at 26 weeks.

Justification has also been upheld where there is a far longer period of paid maternity leave and in the previous case of Shuter v Ford Motor Company, the Employment Tribunal accepted that paying women on maternity leave for a full year in order to recruit and retain them in a male-dominated workforce was a valid justification.  Employers with a long period of enhanced maternity leave may wish to consider that decision.

Hextall v Chief Constable of Leicestershire police - judgment available here