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Enhancing shared parental leave pay
Ali v Capita Customer Management; Hextall v Chief Constable of Leicester Police
Enhancing the pay of women on maternity leave but not men on shared parental leave is not direct or indirect sex discrimination and even if indirect, it would be objectively justified. Where enhanced maternity pay is contractual, the sex equality clause does not apply as it relates to special treatment related to maternity.
Subject to eligibility criteria, parents can share 50 of the 52 weeks of maternity leave available to women. They can also share up to 39 weeks of statutory maternity pay, reduced by any weeks of statutory maternity pay which have already been paid to the mother – this is called statutory shared parental leave pay (‘SPP’). While there is no statutory requirement to enhance SPP, where an employer offers enhanced contractual maternity pay to a mother is it only obliged to offer statutory SPP to fathers? In other words, does a failure to match a mother’s contractually enhanced maternity pay for fathers taking shared parental leave amount to direct or indirect discrimination? This issue is important because when the SPL scheme was introduced, the government’s technical guidance stated that it was not necessary for employers to enhance statutory shared parental pay even if they enhanced maternity pay – and many employers have relied on this to justify differences in their family leave policies.
The EAT has already considered this issue in two cases. In Ali v Capita Customer Management the EAT held that a failure to pay a father his full salary during shared parental leave was not direct sex discrimination where a mother taking maternity leave during the same period would have received full pay. In Hextall v Chief Constable of Leicester Police the EAT indicated that enhancing maternity pay only may give rise to indirect sex discrimination claims by fathers, which could be justified. Both Mr Ali and Mr Hextall appealed, and the Court of Appeal heard both cases jointly.
Court of Appeal decision
The Court of Appeal has emphasised that maternity leave is not there for the care of the child but the health and protection of the mother, to deal with the trauma of having a child. It is for this reason that maternity leave can start before the baby is born and why women are able to take maternity leave even in the sad circumstances of them losing the child. Therefore maternity leave and shared parental leave cannot be compared.
They have accepted the decision of the EAT that it cannot possibly be direct sex discrimination because men and women taking shared parental leave are treated equally.
They also found that this was not indirect discrimination because 'the pool of individuals upon whom the effect of the provision, criteria or practice (PCP) is evaluated must be populated by persons whose circumstances are the same [as], or not materially different from, the claimant'. The Court of Appeal had already found that women on maternity leave are materially different from men or women taking shared parental leave and should therefore be excluded from the pool. Having found this, it was clear that the PCP caused no particular disadvantage to the claimant, and so it was not indirect discrimination and the issue of justification simply does not arise.
However, the Court of Appeal went on to find that even if they were wrong on this, they would been prepared to hold that any disadvantage to the claimant was justified as being a proportionate means of achieving a legitimate aim, namely the special treatment of mothers in connection with pregnancy or childbirth.
Finally, an argument was put forward that where there is a contractual right to maternity pay (as there was in Hextall) this gives rise to an equal pay or equality of terms claim. The Court of Appeal accepted that this was the correct way for the claim to be brought but said that it would fail because even where the terms are properly comparable, the sex equality clause implied to every contract does not apply where there is special treatment relating to maternity.
Link to judgment: https://www.bailii.org/ew/cases/EWCA/Civ/2019/900.html
Whilst this decision may at first appear to be very unfair, the practical outcome of it is a positive one. If the court had held that SPP should be enhanced for men then the likely outcome would have been companies withdrawing enhanced maternity pay, so that they did not have to match it