No requirement to match enhanced maternity pay with enhanced shared parental leave pay
Author: Darren Newman
Consultant editor Darren Newman examines the recent Court of Appeal decision that puts paid - for now at least - to the argument that employers that offer enhanced maternity pay must offer the equivalent for employees on shared parental leave.
Should employers that pay an enhanced rate of maternity pay be obliged to do the same for employees taking shared parental leave? This had been an unresolved question since shared parental leave was introduced in 2015. However, in Capita Customer Management Ltd v Ali; Hextall v Chief Constable of Leicestershire Police  IRLR 695 CA the Court of Appeal has now answered it with a resounding "no".
Mr Ali's case was concerned with a claim of direct discrimination and Mr Hextall's with a claim of indirect discrimination. The facts of the cases were essentially the same. In each case, a father sought to take shared parental leave soon after the birth of his child, and the employer would have paid a woman on maternity leave her full pay for at least part of the period that the father took as shared parental leave. However, the employer paid shared parental leave only at the statutory rate (currently £148.68). Was that sex discrimination?
Section 13(6) of the Equality Act 2010 provides that in a direct discrimination case "no account is to be taken of special treatment afforded to a woman in connection with pregnancy or childbirth". However, the employment tribunal in Mr Ali's case held that this exception did not apply and upheld his direct discrimination claim. Once the initial two-week compulsory maternity leave period was over, a woman taking maternity leave was in the same position as a man taking shared parental leave. Both parents were essentially taking time off to care for their child and the additional pay given to a woman on maternity leave was not therefore in connection with pregnancy or childbirth.
The Court of Appeal roundly rejected the notion that the sole purpose of maternity leave is to provide childcare. Referring to the Pregnant Workers Directive (92/85/EC) and European Court of Justice case law, the Court held that maternity leave allows an employee to recover from the effects of pregnancy and childbirth, to develop the "special relationship" between mother and newborn child and to breastfeed. The Court concluded that the extra pay for maternity leave did indeed fall within s.13(6) - but its decision goes wider than that. There was no need for the exception to apply because there was no direct sex discrimination in the first place. Men taking shared parental leave are not in the same position as women taking maternity leave. The proper comparator in Mr Ali's case was a woman taking shared parental leave - and she would have been treated in exactly the same way.
When the Court moved on to Mr Hextall's case, it became clear that Mr Ali's claim was wholly misconceived in any event. Mr Hextall was, by the appeal stage, claiming that his employer's differential treatment of maternity leave and shared parental leave amounted to indirect sex discrimination. However, the employer successfully argued that, since the claim was concerned with the terms and conditions of Mr Hextall's employment - rather than with the way in which he was treated by the employer - the only claim he could bring was one for equal pay. Equal pay claims are not confined to claims about the basic rate of pay, but cover any contractual terms - indeed the Equality Act 2010 replaces the old terminology of the Equal Pay Act 1970 by referring throughout simply to "equality of terms". The Equality Act 2010 makes clear (in s.70) that a sex discrimination claim cannot be brought if the case is properly a claim for equal terms.
But any claim for equal terms by Mr Hextall was doomed to fail. This is because sch.7 to the Equality Act 2010 provides that the equality clause on which such a claim relies does not apply to terms affording special treatment to women in connection with pregnancy or childbirth. The Court of Appeal held that this exception applied and prevented Mr Hextall from comparing his terms with those of women taking maternity leave. The exception in sch.7 is even wider than the exception in s.13(6) because it prevents any claim for equality of terms, even if the claim is based on indirect rather than direct discrimination.
To be on the safe side, the Court did consider Mr Hextall's indirect discrimination claim, and held that even if it were a permissible claim it would be rejected. There were no grounds for finding that men suffered a particular disadvantage in relation to the employer's policy on maternity leave. Even in an indirect discrimination claim it was necessary to compare "like with like" and the pool for comparison would be men and women taking shared parental leave - it would not include women taking maternity leave. In any event, the employer's preferential treatment in relation to maternity leave was "a proportionate means of achieving a legitimate aim".
The Court of Appeal has been careful not to leave any avenue open for those seeking to use discrimination law to claim that shared parental leave should be paid at the same rate as maternity leave. Employers that currently pay an enhanced rate of maternity pay - even for an extended period - can continue to do so (although they should be aware that an application for leave to appeal to the Supreme Court has been made).
There is, of course, a public policy argument that we should encourage a more equal distribution of leave between parents so that it is no longer assumed that women will take an extended period of leave following childbirth and fathers will take only a much shorter period to provide support. Shared parental leave was intended to do this, but take-up has been disappointingly low. The fact that it is paid at such a low rate is surely a major factor in this. However, had these cases been decided differently, the result would probably not have been a widespread increase in employers paying an enhanced rate for shared parental leave, but rather a reduction in the number of employers offering enhanced maternity pay. A public policy problem needs a public policy response and it should now be for the Government to look at how it can encourage fathers to take on more childcare responsibility.