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Markel Insurance

19 Jun 2019

Enhanced Shared Parental Leave Pay is not discriminatory

Shared parental leave entitles the parent not taking maternity leave to effectively share 50 weeks of any of the un-taken leave. An issue that has come before the court is whether or not it is unlawful sex discrimination to pay men on shared parental leave less than women on maternity leave.

In two appeals heard together, the Court of Appeal has decided it was not discriminatory to pay men the statutory minimum shared parental leave pay only when women were paid an enhanced rate of maternity pay when taking maternity leave.  In respect of each of the discrimination claims brought by two men against their respective employers, the Court decided as follows:
Direct Discrimination
One of the male claimants argued it was direct sex discrimination not to pay him the same as a woman on maternity leave when he took shared parental leave but received the statutory rate of pay only.  He accepted that there was a material difference in circumstances during the first two weeks of compulsory maternity leave which he recognised is aimed at protecting a woman's health after childbirth, but argued that the purpose of maternity leave after that is the same as shared parental leave, namely to provide childcare. The court rejected this.  In applying the wording of the Pregnant Workers Directive, it found that the predominant purpose of maternity leave is not childcare but other matters exclusive to the birth mother resulting from pregnancy and childbirth, which are not shared by the husband or partner.

The Court of Appeal determined that the legally permitted special treatment afforded to a woman in connection with pregnancy or childbirth is wide enough to include special treatment in the form of enhanced maternity pay. The minimum of 14 weeks' leave required by the Pregnant Workers Directive was not enough to change the position in this regard after 14 weeks of maternity leave.

In agreeing with the Employment Appeal Tribunal’s findings, the Court of Appeal found that in applying the wording of the Pregnant Workers Directive, men on parental leave and women on maternity leave are not in comparable positions for the purposes of Equality Act 2010.  This meant that the man had to compare his treatment with a female worker on shared parental leave and not maternity leave.  As there is no difference in statutory pay received by a man on shared parental leave and a woman on shared parental leave, there was no discrimination.   

Equal Pay
The Equality Act 2010 provides that any term under which somebody is employed must be modified to ensure that the contractual term is no less favourable to that of the comparator of the opposite sex.  One of the male claimants also brought a claim on the basis that the provision for shared parental leave pay should be modified so that it was not less favourable than the enhanced maternity pay available to women on maternity leave. The Court of Appeal however found that the equal pay provisions of the Equality Act don't permit a man to make an equal pay claim based on more favourable terms which are enjoyed by a woman as a result of pregnancy or childbirth. Since these provisions are wide enough to include enhanced maternity pay, there was no claim for equal pay.

Indirect discrimination
The Court of Appeal found that both the employment tribunal and the EAT were incorrect in holding that the claim of indirect sex discrimination was not in fact an equal terms claim.  It found that the claim for indirect discrimination was in effect an argument that the more favourable terms of work benefiting female employees on maternity leave were included in his terms of work by operation of the sex equality clause.  In bringing the indirect sex discrimination claim, he was reliant on that term to claim that he has not received his contractual entitlement to enhanced pay over the period when he was absent from work to care for his new baby.  The Court of Appeal found that there is a specific exclusion for indirect discrimination claims where they would be equal pay claims, except for that specific statutory exception which permits ‘special treatment’ to women as a result of pregnancy or childbirth. For this reason, the indirect discrimination claim could not be brought either.

Consequently, the Claimants' grounds of appeal were dismissed.
Employers may rely on this decision to defend a potential sex discrimination claim where they offer enhanced maternity pay to employees who take maternity leave, but pay statutory shared parental pay to employees taking shared parental leave.  Had the Court ruled in favour of the claimants, it is likely that employers would have looked to review their enhanced maternity pay schemes in response. 
Under the shared parental leave regulations, parents can share up to 50 weeks of leave, taking it in up to three separate blocks, or sharing the time to have up to six months off together.  It is noteworthy, that generally speaking the take up of shared parental leave has been low, with statistics cited by the Government suggesting the take up for couples that qualify for shared parental leave could be as low as 2%. For employers that are able to offer enhanced shared parental leave pay, the take up is likely to be higher.
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This feature was written in collaboration with the solicitors at Markel Law. Find out more about Markel Law and how they can assist your business.
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