Does failure to enhance shared parental leave pay amount to sex discrimination?

When shared parental leave was introduced in April 2015 many employers with enhanced maternity pay policies grappled with whether or not they should provide a similar enhancement to shared parental leave pay (“SPP”). The particular concern for employers in this position was whether failure to enhance SPP would be sex discrimination. 

In the case of Ali v Capita Customer Management the Employment Tribunal held that failure to enhance SPP in circumstances where maternity pay is enhanced amounts to direct sex discrimination, but as the case is being appealed, the position isn’t settled yet. 

A recap of the law

  • Direct discrimination occurs where a person is treated less favourably than another because of a protected characteristic. 
  • Indirect discrimination occurs where a policy criteria or practice (for example a parental leave policy) is ostensibly neutral but, in reality, disadvantages people who have a particular characteristic. Indirect discrimination can be lawful if an employer can demonstrate it is a proportionate means of achieving a legitimate aim.
  • Special treatment of women in connection with pregnancy or childbirth is permitted under the Equality Act 2010 and has traditionally been used to allow women beneficial treatment in terms of her entitlement to maternity leave and pay without such treatment being discriminatory.

The facts of the Ali case

Following the birth of his daughter Mr Ali’s wife was diagnosed with post-natal depression and was advised to return to work to help her overcome this. Having taken his two weeks’ paternity leave, Mr Ali asked to take further paid leave. Capita’s response to Mr Ali’s request was that he was eligible to take leave under its shared parental leave policy but that he would receive SPP at the statutory rate only. By comparison, a woman taking maternity leave at Capita would have received full pay during 14 weeks of maternity leave.

Mr Ali brought a claim for direct sex discrimination. Setting aside the two week compulsory maternity leave period which is designed to safeguard a new mother’s physical health following childbirth, Mr Ali argued that thereafter it was open to either parent to assume the role of primary carer for a new child. Mr Ali compared himself with a woman on maternity leave who would have received 12 weeks full pay (following the two week compulsory maternity leave period) compared with the statutory SPP he was going to receive. Mr Ali argued that this treatment was directly discriminatory on the grounds of his sex.     

In addition to his direct sex discrimination claim, Mr Ali also claimed that Capita’s maternity policy was indirectly discriminatory. 

The Tribunal’s decision

Direct Discrimination

The Tribunal agreed with Mr Ali that he had been directly discriminated against by Capita. The Tribunal accepted that the correct comparator in Mr Ali’s case would be a female colleague taking leave to care for her child after the two week compulsory maternity leave period. Such a comparator would receive enhanced maternity pay under Capita’s policy which was not available to Mr Ali as a man. 

The Tribunal found that this difference in treatment wasn’t permitted under the “special treatment” exemption as it did not relate to “pregnancy or childbirth”. After the two week compulsory maternity leave period the treatment afforded to women under the maternity leave policy related to them caring for a new-born baby rather than to their pregnancy or childbirth. 

Indirect Discrimination

Mr Ali’s claim for indirect sex discrimination did not succeed on the basis that the maternity policy applied only to women and, as such, was not ostensibly neutral in its application.

What action should employers be taking now?

The Tribunal’s decision regarding direct sex discrimination is at odds with an earlier Tribunal decision in Hextall v Chief Constable of Leicestershire Police. In the Hextall case the Tribunal found there was no direct sex discrimination as the correct comparator for such a claim would be a female colleague taking shared parental leave. Such a comparator would be treated in the same way as a man taking shared parental leave and, as such, there was no discriminatory treatment.  

Both the Ali and the Hextall case are being appealed up to the Employment Appeal Tribunal (“EAT”) and, as such, it’s not yet clear which is the correct position. 

Employers may wish to consider whether or not to alter their shared parental leave policies following the decision in Ali. However, unless facing an immediate threat of a sex discrimination claim from an employee (in which case bespoke advice should be sought), employers may prefer to wait until the EAT judgments in these cases are issued. These judgments should provide more definitive guidance as to whether or not failing to enhance SPP is discriminatory and shared parental leave policies can then be updated as necessary at that point in time. 

The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.