Employers frequently pay enhanced maternity pay as part of their employee benefit package. However, it is not uncommon for employers to pay only statutory minimum Shared Parental Pay (ShPP). A debate arose as to whether an employer who pays enhanced maternity pay, but not enhanced ShPP was discriminating against men. The Court of Appeal in the joint cases of Ali v Capita Customer Management Ltd and Chief Constable of Leicestershire v Hextall has, for now, settled that debate, confirming that the practice is not discriminatory.
In very simplistic terms, Shared Parental Leave (SPL) effectively allows parents to share the mother’s maternity leave. Importantly, however, SPL is separate to maternity leave. It works by the mother electing to give up the unused portion of her maternity leave and turn this into SPL. This SPL can either be split between the mother and father or can be gifted to the father in its entirety. It therefore allows the father to take time off work to help look after the child, which many people praised as a step forward in encouraging men to take a greater role in childcare.
However, with the disparity in pay between fathers and mothers by employers who pay enhanced maternity pay but not enhanced ShPP, take-up of SPL has been low and the argument from some is that the step forward in encouraging men to take a greater role in childcare is somewhat of a baby step.
In the combined cases of Ali and Hextall, the claimant fathers brought claims asserting that the practice of paying enhanced maternity pay but not enhanced ShPP is unlawful as either being directly or indirectly discriminatory on the grounds of sex, or that it is contrary to equal pay requirements.
The Court of Appeal has rejected all three grounds of claim. Looking at the court’s decision on each of these claims in turn:
In order to show that the practice amounts to direct discrimination, the claimants would need to show that a woman in materially the same circumstances is treated more favourably. For these purposes, the court held that a woman being paid enhanced maternity pay was not the correct comparator to a man not being paid enhanced ShPP, as maternity leave and SPL are not the same and do not serve the same purpose. The correct comparator is a woman who is also on SPL, who, in these cases, would also not have received enhanced ShPP. The difference in treatment was therefore not gender, but the fact that the male claimants were on SPL, not maternity leave. The practice was therefore deemed not to be direct discrimination.
The Equality Act 2010 requires men and women in comparable positions to be paid the same. The Court of Appeal rejected the claim that failing to pay enhanced ShPP while paying enhanced maternity pay was contrary to equal pay legislation. Much like its reasoning on direct discrimination, it held that the contractual term entitling an employee to maternity pay was not a proper corresponding term to the term which entitles an employee to ShPP, given that the two leave regimes are different.
Further, and on a more technical point, the court held that the claim would also fail as the Equality Act 2010 contains a provision which disapplies the requirement to provide equal terms in relation to terms affording mothers special treatment relating to pregnancy or childbirth.
The court rejected the indirect discrimination claim on a technical point. The Equality Act 2010 prevents an indirect discrimination claim being brought if it is, in reality, an equal pay claim. Given that the claim was in effect an argument of equality of pay (even though this part of the claim was unsuccessful) the claim for indirect discrimination could not succeed.
However, the court went on to explain that, even if the claim could be brought, it would have failed. In order to prove indirect discrimination, the claimants would need to have shown that the practice put men at a disadvantage as compared to women and that this could not be justified as a proportionate means of achieving a legitimate aim. The court again pointed to the fact that a woman on maternity leave cannot be the correct comparator to a man on SPL as the two sets of leave are different. Therefore, any disadvantage suffered by men was not because of the practice of not paying ShPP (which applied to both men and women), but was instead because men cannot take maternity leave. It also held that, even if this were not the case, the difference in treatment would be justified as being a proportionate means of achieving a legitimate aim given the allowance in the Equality Act 2010 for more favourable treatment being afforded to women in relation to childbirth or pregnancy.
The decision will be welcomed by employers, who now have greater certainty regarding how this issue should be handled. Provided that employers pay men and women on SPL the same, it appears that they will not be open to criticism from the courts for sex discrimination if they pay women on maternity leave more.
However, with the claimants seeking to appeal their cases to the Supreme Court, this may not be the final word on this issue.