April 2015 saw the reshaping of family-friendly leave with the birth of Shared Parental Leave (ShPL). A mother can elect to curtail their maternity leave period two weeks after giving birth. She can then elect to convert the unused portion of that leave, so that up to 50 weeks' statutory leave and 37 weeks' statutory pay can be shared between both parents. BUT can employers offer enhanced contractual maternity pay to mothers for any part or all of those 50 weeks, but only statutory shared parental pay to fathers?
The Employment Appeal Tribunal (EAT) in Ali v Capita Customer Management Limited has now confirmed that it is not direct sex discrimination for employers to offer 14 weeks' enhanced maternity pay but only statutory ShPL pay.
While this case is in line with Government guidance and the traditional view, it is notable that this case concerned an enhanced maternity pay period of only 14 weeks which happens to be the minimum maternity leave period required under the EU Pregnant Workers Directive. As such, a question mark remains where enhanced contractual maternity pay period exceeds 14 weeks.
The baby elephant in the room
Whether an employer who fails to match maternity pay enhancements will face a successful discrimination claim from a man on ShPL has been the elephant in the room for some time. There is no express obligation on employers in the voluminous ShPL legislation to match enhanced contractual maternity pay. But are employers obliged to do so under the Equality Act 2010 in order to avoid discrimination claims from men on ShPL receiving less pay than women on maternity leave? Does and, if so at what point does, the primary aim of time off following the birth of a child go from protecting the health and wellbeing of the mother to time off for caring for an infant?
In March 2017, an employment tribunal in Ali v Capita Customer Management Limited found that the employer directly discriminated against Mr Ali when it offered enhanced contractual maternity leave pay to female employees for the first 14 weeks of maternity leave but only offered him enhanced contractual pay for two weeks' paternity leave followed by 12 weeks' statutory ShPL pay. The tribunal accepted that the disparity was founded on an assumption that mothers are best placed to undertake caring for a baby, but that assumption was no longer valid in today's society.
But a few months before the Ali decision, a different employment tribunal, in Hextall v Chief Constable of Leicestershire Police found an employer's policy of offering 18 weeks' enhanced contractual maternity pay but only statutory ShPL pay was not discriminatory.
What is shared parental leave pay?
The default position in relation to ShPL Pay is that it is paid at the flat statutory rate - currently £140.98 (rising to £145.18 from 1 April 2018) per week. Some employers offer contractual shared parental leave pay that is more favourable than the basic statutory entitlement. What is clear even before this decision, is that an employer cannot offer enhanced contractual ShPL pay to mothers only. If an employer chooses to offer enhanced contractual ShPL pay it must offer it to anyone eligible to take it (both mothers/primary adopters and fathers/mothers' or primary adopters' partners).
BUT - and this is the big question - what is the position for employers who offer enhanced contractual maternity pay for women but statutory ShPL pay for men and women?
The Government's view is that there is no legal requirement for employers to offer corresponding enhancements to shared parental pay. Employers are free to offer more generous enhanced arrangements if they wish, but are not obliged to do so (the 'Employer's Technical Guide to Shared Parental Leave and Pay' September 2014). But this is simply the Government's view.
Why the uncertainty?
Under section 13(6)(b) of the Equality Act 2010 when a man is looking to establish less favourable treatment for the purpose of a sex discrimination claim, 'no account is to be taken of special treatment afforded to a woman in connection with pregnancy and childbirth'.
The introduction of ShPL allowing for conversion of maternity leave to ShPL after only two weeks, increases the focus on the underlying aim of maternity leave. Does there come a point in time when maternity leave is no longer designed to protect a woman's biological condition following pregnancy and childbirth and instead becomes childcare?.
In Mr Ali's case, the employment tribunal stated:
"It was not clear why any exclusivity should apply beyond the two weeks after birth. In 2016, men are being encouraged to play a greater role in caring for their babies. Whether that happens in practice is a matter of choice for the parents depending on their personal circumstances but the choice made should be free of generalised assumptions that the mother is always best placed to undertake that role and should get the full pay because of that assumed exclusivity."
On that basis, the employment tribunal found the employer had directly discriminated against Mr Ali as the provision of enhanced maternity pay after two weeks did not fall within the special treatment in connection with pregnancy and childbirth exemption in section 13(6)(b). But the Employment Appeal Tribunal (EAT) has now disagreed.
Health and wellbeing of the mother not child care
The EAT has held that the tribunal was wrong to find the purpose of maternity leave and pay after two weeks (the compulsory maternity leave period) is for the care of the child. That finding was contrary to the purpose of the Pregnant Workers Directive which requires that women receive statutory maternity leave and pay for a minimum of 14 weeks. The Directive makes it clear that maternity leave and the pay associated with it are for the health and wellbeing of a pregnant woman, one who has recently given birth and/or who is breastfeeding. As the EAT states:
"whilst a woman on maternity leave will no doubt take care of her baby, that is not the expressed or primary purpose of such leave. By contrast the purpose or reason for shared parental leave is for the care of the beneficiaries' child".
In the EAT's view, Mr Ali's circumstances were not comparable to a woman who had recently given birth. The correct comparator was instead a woman on ShPL, who like Mr Ali, would only receive statutory ShPL pay under the employer's policy.
But the grey area persists
It is important to note that Mr Ali's case concerned an employer's policy that only provided enhanced contractual maternity pay for the first 14 weeks and so fell squarely within the minimum leave and pay period set out in the Pregnant Workers Directive for the health and wellbeing of the birth mother.
But what about employer policies offering enhanced maternity pay in excess of 14 weeks? Does there come a point in time when maternity leave and pay is no longer designed to protect a woman's biological condition following pregnancy and childbirth and instead, its purpose becomes childcare?
On the one hand, under the UK legislation, surrogate mothers and other birth mothers who give their child up for adoption are entitled to take the full period of statutory maternity leave and pay, regardless of whether or not they continue to have contact with the child following the birth (also entitled are those who sadly suffer a stillbirth). This indicates a primary purpose of maternity leave being for the woman's health and wellbeing following pregnancy/childbirth.
On the other hand, the EAT noted that it may be, as suggested by Working Families who intervened in the appeal, that after 26 weeks (the Ordinary Maternity Leave period) the purpose of maternity leave and pay may change from the biological recovery from childbirth and special bonding period between mother and child, and it may at that point be possible to draw a valid comparison between a father on ShPL and a mother on maternity leave. As such, the EAT appears to leave the possibility of a challenge to policies offering enhanced maternity pay in excess of 26 weeks but not enhanced ShPL pay.
While the EAT's judgment refers to the case of Mr Hextall (see above) and the same judge heard the appeal, the EAT's Hextall judgment is still outstanding. The case concerned an employer's policy which offered enhanced pay for 18 weeks. As such it may shed a bit more light on enhanced maternity pay periods exceeding 14 weeks (though Mr Hextall only actually took 14 weeks ShPL).
What should employers consider now?
As has always been the case, ensure shared parental pay policies treat mothers/primary adopters and fathers/mothers' or primary adopters' partners equally (see our earlier insight Shared parental leave: the curious case of Mr and Mrs Snell).
In an era of changing traditional gender roles with more men wanting to take an active role in child-rearing from an early age, employers should consider whether to offer enhanced shared parental pay which mirrors any enhanced maternity pay policy. Ask yourself:
- Will enhanced ShPL pay assist in attracting and retaining talent in your organisation?; and
- What are the potential discrimination risks versus costs if you offer enhanced maternity pay in excess of 14 or 26 weeks but not enhanced ShPL pay?
Responding to the EAT judgment, Working Families' Chief Executive Sarah Jackson encourages employers not to view this issue as a zero-sum game:
"Today's decision is an important safeguard for the special employment protection needed for pregnant women and new mothers. We intervened in this case because the particular workplace disadvantage women face having experienced pregnancy and childbirth must continue to be recognised in law. Only women can experience childbirth, and maternity leave is to protect women's health and wellbeing - it cannot simply be equated with "childcare". We have long called for greater rights and pay for working fathers, including properly paid, standalone period of extended paternity leave for fathers; but these should complement, not undermine, the rights of working mothers. This is a not a zero-sum game."