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.

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 and consider that they are being treated less favourably than female employees on maternity leave. However, in Capita Customer Management Ltd v Ali; Hextall v Chief Constable of Leicestershire Police [2019] IRLR 695 CA, the Court of Appeal 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 Court of Appeal said it was necessary to consider the purposes of maternity leave and pay, which include assisting the mother to recuperate from the effects of the pregnancy and childbirth. It did not accept that, after two weeks' compulsory maternity leave, the subsequent maternity leave period was for the purpose of caring for the child, and therefore comparable to shared parental leave.

The Court of Appeal in Ali also considered whether or not a male employee could have an equal pay claim if they take leave to care for their newborn baby but are not paid at the same rate of pay as a mother taking maternity leave. The Court rejected this argument on the grounds that the Equality Act 2010 allows for contractual terms to afford special treatment to women in connection with pregnancy or childbirth. Similarly, it rejected the argument that a policy of enhancing maternity pay but not shared parental pay amounted to indirect sex discrimination against men. In any event, it could be justified as being a proportionate means of achieving a legitimate aim, namely the special treatment afforded to mothers in connection with pregnancy or childbirth.

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 they swap to shared parental leave.