Thu 10 May 2018

Shared parental pay and enhanced maternity pay

Two important decisions of the EAT look at the issue of whether a male suffers sex discrimination when his employer enhances maternity pay but not shared parental pay.

Last year two cases relating to whether a failure by employers to pay enhanced shared parental pay when maternity pay was enhanced was discriminatory were brought before different employment tribunals.  In Hextall v Chief Constable of Leicestershire Police the Tribunal dismissed a direct discrimination claim concluding that maternity leave and pay were special treatment afforded to women in connection with pregnancy and childbirth - this special treatment being something that the Equality Act 2010 specifically states no account should be taken of when assessing whether a man has been discriminated against. The Tribunal also considered that the correct comparator (the individual, real or hypothetical that the claimant compares himself to, in order to demonstrate the difference in treatment) for such a claim would be a woman taking Shared Parental Leave ("SPL") and not a woman on maternity leave.  A woman taking SPL would have been treated the same way as the male claimant and, on that basis, the direct discrimination claim was unsuccessful, the Tribunal finding that there had been no less favourable treatment.  The Tribunal also dismissed an indirect discrimination claim based on the same facts.  The Tribunal was of the view that its finding regarding comparators applied as much to a claim of indirect discrimination as it did to a claim of direct discrimination and, in addition, the PCP relied upon by Mr Hextall  did not put men at a particular disadvantage compared with women.

However, in the second case, Ali v Capita Customer Management Ltd, a Tribunal found that the employer's failure to match their enhanced maternity pay with enhanced shared parental leave was direct discrimination.  The facts of the case were a little complicated involving a transfer of an undertaking and the timing of the introduction of Shared Parental Leave ("SPL"), but the crux of the matter was that, at the time Mr Ali's wife gave birth his employer paid enhanced maternity pay to female employees for the first 14 weeks of their leave, but shared parental pay was paid at the statutory rate only.

Mr Ali managed to persuade the Tribunal that, because parents could choose which one of them took SPL it was sex discrimination to pay the mother more than a man in respect of that leave. In response Capita had argued that the right to maternity leave and therefore the enhanced pay arose because a woman had given birth and the special considerations that arise from the fact that only a woman can be pregnant or give birth.  They also relied upon provisions of the Equality Act 2010 that meant special treatment afforded to women in connection with pregnancy and childbirth could not be taken into account when attempting to establish sex discrimination. 

The ET held that the Claimant could compare himself to a female colleague even though he had not given birth.  The ET concluded that after the 2 weeks of compulsory maternity leave expired then maternity leave could be treated as being to care for the child.  That led them to conclude that the enhanced pay provided to the mother following the end of the compulsory period was not "special treatment in connection with pregnancy and childbirth" and therefore could be taken into account when assessing if discrimination had taken place. 

Mr Ali had also made an indirect discrimination claim however that was rejected by the Tribunal because the PCP relied upon was the employer's maternity policy.  As this policy was not gender neutral (a requirement for an indirect sex discrimination claim) that claim could not proceed.

Both cases were appealed to the EAT with the judgement  in Capita Customer Management Limited v Ali being handed down on 11 April and the judgement in Hextall v Leicestershire Police being handed down about three weeks later.

In Ali, the EAT over turned the decision of the Tribunal.  Central to the ET's judgement had been a conclusion that, following the completion of compulsory maternity leave, the purpose of the remaining leave was to care for the child.  The EAT did not agree.  It stated that the domestic and European legislation draws a clear distinction between the rights of pregnant workers, who by reason of biology are women, and the rights given to parents of either sex to take leave to care for their child.  The purposes of the two sets of rights are different, as are the circumstances in which they are given - the purpose of maternity leave being for the health and wellbeing of the pregnant and birth mother, not the care of the child.  The purpose of SPL was the care of the child. 

The consequence of this was that the ET erred in concluding that the Claimant could compare himself to a woman on maternity leave as his circumstances were materially different.  The appropriate comparator in this claim would be a woman on shared parental leave (who would have received the same terms as the Claimant) and not a woman on maternity leave. 

The EAT also found that, even if the appropriate comparator had been a female on maternity leave, that comparator's treatment should have been disregarded when assessing discrimination because it was special treatment in connection with pregnancy and childbirth.  The door was left open though for a similar claim relating to the later stages of a woman's maternity leave, the EAT noting that it may be that after 26 weeks of leave the purpose of it may change from biological recovery from childbirth to care of the child. 

This does mean that employers now have a degree of certainty in terms of a failure to enhance shared parental pay not amounting to direct sex discrimination.  

However, in the Hextall appeal,  the EAT concluded that it was an error for the Tribunal to apply their judgement on the correct comparator in the direct discrimination claim to the indirect discrimination claim.  The process involved in identifying a comparator in a direct discrimination claim is a different one from the process for identifying a pool for testing disparate impact of a PCP in an indirect discrimination claim.

With regard to the Tribunal's findings on the "particular disadvantage", the EAT were of the view that the ET had failed to clearly identify it which meant that the EAT could not reach a conclusion on whether men seeking leave to care for a newborn child were put at a disadvantage when compared with a woman in similar circumstances.  What is more, the Tribunal had also erred in holding the PCP - which was paying only the statutory rate to employees taking shared parental leave - did not put men at a disadvantage because both men and women were entitled to be paid the same amount.

The EAT remitted the case back to a different employment tribunal.  Of course, indirect discrimination claims can be justified as a proportionate means of a achieving a legitimate aim.  On that basis any employers with similar arrangements in place should be considering what justification they have -bearing in mind cost alone is not enough - for not enhancing shared parental pay. It is likely though that the judgement in the Ali case (in particular the different purposes of maternity leave and SPL)  will assist with formulating such a justification.

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