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Shared parental leave: Court of Appeal finds failure to enhance shared parental pay in line with contractual maternity pay is not discriminatory

29 May 2019
In the combined cases of Ali v Capita Customer Management Limited and Chief Constable of Leicestershire v Hextall, the Court of Appeal has found that is it not discriminatory to pay different rates of pay for women on maternity leave and men on shared parental leave.

The Court of Appeal considered both direct and indirect discrimination together with equal pay.  

Background

Mr Ali 

Mr Ali joined Capita in 2013, via a transfer from Telefonica under the Transfer of Undertakings (Protection of Employment) Regulations 2006 ("TUPE").  Under the terms of its family friendly policies, female employees who had transferred from Telefonica were entitled to 14 weeks’ maternity leave at full pay following the birth of their child.  However, male employees who had transferred, such as Mr Ali, were entitled to two weeks’ paid leave following the birth of their child.

Mr Ali's daughter was born prematurely in April 2016 following which he took two weeks' paid paternity leave and a week's annual leave.  Mr Ali then wished to take more time off to take care of his daughter after his wife suffered from post-natal depression and was advised to return to work by medical professionals in order to assist her recovery.

Mr Ali was informed that he would be entitled to shared parental leave which, in accordance with the Capita policy, and many employers' policies, would be paid at the statutory rate.  Mr Ali argued that he was being discriminated against on the basis that a female employee taking maternity leave would have received 14 weeks' full pay.  Mr Ali accepted that he had been paid paternity pay at full pay during the first two weeks immediately following the birth of his daughter and so his claim focused on the subsequent 12 weeks when a female employee would have been entitled to maternity leave at full pay.  

The Employment Appeal Tribunal ("EAT") found that Mr Ali had not been directly discriminated against.  The purpose of maternity leave and pay is for the health and wellbeing of a woman during pregnancy, confinement and after recent childbirth.  The EAT found that "maternity pay is given not for performing a role but to enable the mother to take leave for her own health and wellbeing".  For further information please see our Legal Insight

Mr Hextall 

Mr Hextall joined the Respondent Police Force in 2003. Following the birth of his second child on 29 April 2015 he took a three month period of shared parental leave and was paid at the statutory rate of pay (£139.58 per week at the time). A female police constable on maternity leave would have been entitled to her full salary during this period. Mr Hextall brought claims of direct and indirect sex discrimination.

The Employment Tribunal dismissed both the direct and indirect discrimination claims.  Mr Hextall appealed to the EAT with regard to the indirect discrimination claim.  The EAT found that the Employment Tribunal had erred in its analysis and remitted the case to a new Employment Tribunal to consider the particular disadvantage and to identify the appropriate pool for comparison.  For further information please see our Legal Insight.

Court of Appeal 

The two cases were combined and considered by the Court of Appeal on 1 and 2 May 2019.  The Court of Appeal decided that it was not discriminatory to pay men a statutory rate of pay for shared parental leave and to pay women an enhanced rate of pay for maternity leave. 

The Court considered the various claims asserted:

Direct discrimination 

The Equality Act 2010 allows for special treatment to be afforded to women in connection with pregnancy or childbirth. This special treatment exception is wide enough to include the concept of enhanced maternity pay. The Court of Appeal re-affirmed the EAT's finding that the predominant purpose of maternity leave is not to care for the child but includes other matters exclusive to the birth mother resulting from pregnancy and childbirth. 

The correct comparator for a man on shared parental leave would be a woman on shared parental leave, not a woman on maternity leave.  

The direct discrimination claim was dismissed.

Equal pay

Mr Hextall's claim had been one of indirect discrimination, however once the claim reached the Court of Appeal the employer agreed the claim was about different rates of pay for men and women and so should be characterised as an equal pay claim.  The Equality Act 2010 inserts a sex equality clause into all contracts of employment so that an employee of one sex, doing equal work, can benefit from the same favourable terms enjoyed by the employee of the opposite sex.  However, the Equality Act 2010 specifically excludes the sex equality clause in relation to the special treatment afforded to pregnancy and childbirth:

"… a sex equality clause does not have effect in relation to terms of work affording special treatment to women in connection with pregnancy or childbirth."

Mr Hextall's equal pay claim therefore failed.  

Indirect discrimination 

The indirect discrimination claim could not be brought where there was also an equal pay claim, even though the equal pay claim failed due to the statutory exclusion.  The indirect discrimination claim therefore also failed.  

Comment 

It will come as a welcome relief for employers that the Court of Appeal has held that it is not discriminatory to pay enhanced maternity pay and statutory shared parental pay.  Both Mr Ali and Mr Hextall are seeking permission to appeal to the Supreme Court.  We will keep you updated.  

Where next for shared parental leave?

Many employers are seeking to enhance shared parental pay to encourage uptake of the leave.  With the second year of gender pay gap figures recently released and very little sign of improvement, employers are looking at new ways to try and reduce the gap.  Making shared parental leave an affordable option is just one of the further tactics being employed by businesses to help level the playing field to ensure both men and women are given the opportunity to care for their children.  

Further Reading

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