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Court of Appeal rules that employers can enhance maternity pay without offering enhanced shared parental pay

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The Court of Appeal has held that it is neither unlawful sex discrimination (direct or indirect) nor a breach of the sex equality clause implied into all contracts by the Equality Act 2010 (EqA) to pay men on shared parental leave less than birth mothers on statutory maternity leave.

Two cases were heard by the Court together: Ali v. Capita Customer Management Ltd and Chief Constable of Leicestershire v. Hextall. We blogged on the Ali v. Capita case at both the ET and EAT stages.

Ali v. Capita

At Mr Ali’s employer, female employees were entitled to maternity pay of up to 39 weeks, with the first 14 weeks paid at full pay followed by 25 weeks of lower rate statutory maternity pay. Parents taking shared parental leave received only statutory shared parental pay.

Mr Ali argued that, while the two weeks of compulsory maternity leave were necessary to allow a mother to recover following childbirth, the remaining 12 weeks of maternity leave with enhanced pay was a “choice” to provide childcare. Mr Ali argued that in this period the mother was performing an equivalent childcare role to a man on shared parental leave and thus it was directly discriminatory for women on maternity leave to be paid at a higher rate for this period than men on shared parental leave.

Hextall v. Leicestershire Police

Mr Hextall’s employer operated a similar policy, with female employees being entitled to 18 weeks’ full pay followed by statutory maternity pay. Again, parents taking shared parental leave received only statutory shared parental pay.

Mr Hextall argued that the relevant policies were indirectly discriminatory because it put Mr Hextall, as a man, at a particular disadvantage in comparison with women.  He said he was proportionately less likely to be able to benefit from an equivalent rate of pay to that received by women on maternity leave when he took leave to act as primary carer for his child.

His employer argued that as his complaint related to pay it could not be brought as indirect discrimination but should be properly characterised as a breach of Mr Hextall’s terms of employment, as modified by the sex equality clause under the EqA.  Their argument went on that such claims were excluded as they related to special provisions for pregnancy and childbirth.

Judgment

Taking each head of claim in turn:

Direct discrimination

The Court of Appeal rejected Mr Ali’s proposal that, after the first two weeks of compulsory maternity leave after birth, maternity leave is for nothing more than looking after the child and therefore has an equivalent purpose to shared parental leave. The Court cited authority from the ECJ that the entire period of maternity leave is for more than just facilitating child care, listing six purposes, including; (1) to prepare for and cope with the later stages of pregnancy, (2) to recuperate from the pregnancy, (3) to recuperate from the effects of childbirth, (4) to develop the special relationship between the mother and the newborn child, (5) to breastfeed the newborn child and (6) to care for the newborn child. A birth mother entitled to maternity pay is therefore not a legitimate comparator for the purposes of a direct discrimination claim.

The Court of Appeal found that the proper comparator for the purposes of Mr Ali’s direct discrimination claim was a female employee on shared parental leave.  As there was no difference in treatment between Mr Ali and such an employee there was no direct discrimination.

Indirect discrimination

Under the EqA indirect discrimination does not apply to situations which could be the subject of an equal pay claim. Mr Hextall’s claim of indirect discrimination related to pay so could not be brought.

The Court of Appeal did comment that, had it been relevant, the indirect discrimination claim would have failed in any event. The provision, criterion or practice (PCP) relied on by Mr Hextall (that his employer paid only the statutory rate of pay for those taking a period of shared parental leave) did not in fact cause a particular disadvantage to men when compared with women. Mr Hextall’s indirect discrimination claim was in fact an attack on the whole statutory scheme, under which special treatment is given to birth mothers.

Equal pay

The Court of Appeal went on to find that a contractual difference in shared parental leave pay for men and enhanced maternity pay for women is properly characterised as an equal pay claim.  The EqA incorporates a sex equality clause in all contracts of employment where an individual does work that is equal to the work done by a comparator of the opposite sex.

However the EqA provides an exception to the equality clause where the pay in question affords special treatment to women in connection with pregnancy or childbirth. The Court of Appeal found this exception is wide enough to include enhanced maternity pay and, as a result, there was no claim for equal pay either.

Looking forward

Although the Court’s judgment is clear, both Ali and Hextall are seeking permission to appeal to the Supreme Court.

While there remains no legal obligation to enhance shared parental leave pay to match enhanced maternity pay, an increasing number of employers are opting to do so. Equalising parental pay and maternity pay not only enables employers to avoid the administrative costs associated with discrimination claims from disgruntled employees but, arguably, could create a more level playing field for men and women who want to take time out from their career to raise their family and perhaps even lead to a more inclusive and diverse workforce.