If an employer pays enhanced maternity pay, must it also enhance pay to employees on shared parental leave?
It is for employers to decide whether or not to enhance contractual pay to employees on shared parental leave, where they already pay enhanced maternity pay. There is no statutory provision requiring them to do so. However, when making such a decision, employers should bear in mind the need to avoid any discrimination.
If an employer pays enhanced pay to employees on maternity leave, but not to employees on shared parental leave, there is a risk of sex discrimination claims from male employees who take shared parental leave who consider that they are being treated less favourably than female employees on maternity leave. However, in Capita Customer Management Ltd v Ali and another EAT/0161/17, the Employment Appeal Tribunal (EAT), held that a policy of paying 14 weeks' full pay to women on maternity leave, but only two weeks' full pay to men taking paternity leave and shared parental leave did not amount to direct discrimination. It held that the correct comparator for a man on shared parental leave is a woman on shared parental leave, not a woman on maternity leave. The EAT said it was necessary to consider the purpose of maternity leave and pay, which it said was the health and wellbeing of the mother, at least for the first 14 weeks. It did not accept that, after two weeks' compulsory maternity leave, the subsequent 12 weeks were for the purpose of caring for the child, and therefore comparable to shared parental leave.
Employers that seek to defend an indirect sex discrimination claim by justifying a policy of enhancing maternity pay but not shared parental pay will need evidence to show that the policy is a proportionate means of achieving a legitimate aim. In the employment tribunal case of Shuter v Ford Motor Company Ltd ET/3203504/2013, the employer was able to justify its policy of enhancing maternity pay but not additional paternity pay, as it had clear evidence that the aim of the policy was to attract and retain female employees, and that female representation in the workforce had improved.
An employer considering enhancing pay to employees on shared parental leave should take into account that shared parental leave can be taken in discontinuous periods. The employer would have to decide whether, for example, it will enhance pay for all periods of shared parental leave, for only the first period taken by an employee or for only a certain number of weeks. It should also consider whether or not an employee who has already benefited from enhanced maternity pay will be entitled to a further period of enhanced pay if she swaps to shared parental leave.