Shared parental leave pay and sex discrimination – where to draw the line

In the recent Employment Appeal Tribunal (EAT) decision of Price v. Powys County Council UKEAT/0133/20/LA (V), the EAT held that an employer was entitled to pay a male employee on shared parental leave (SPL) a lower rate of pay compared to a female employee on adoption leave. This did not amount to sex discrimination under the Equality Act 2010.

Background

The claimant, Mr Price, intended to submit an application to his employer, Powys County Council, for SPL so he could look after his newborn child once his wife returned to work following her compulsory two-weeks’ maternity leave. However, under the Council’s Working Parents Policy, Mr Price was only eligible for statutory shared parental pay and was not entitled to receive the enhanced rates of pay that the Council offered to employees on maternity or adoption leave.

Mr Price brought an Employment Tribunal (ET) claim arguing that he had been subjected to direct discrimination, on the basis that he had been treated less favourably compared to:

  • a female employee on maternity leave; and
  • a female employee on adoption leave.

The crucial question for the ET was whether Mr Price’s position (in taking SPL) was materially different to that of a woman taking either maternity or adoption leave. 

The ET decision

The ET dismissed Mr Price’s claim. In reaching this decision, the ET considered the similarities and differences between maternity leave, adoption leave and SPL, and ultimately held that there were material differences between each type of leave. Accordingly, the ET held that the correct comparator was not a female employee on maternity leave or on adoption leave, but rather a female employee on SPL.  As a female employee on SPL would have received the same statutory rate of pay as Mr Price, it held there was no discrimination.


The EAT decision

Mr Price appealed to the EAT. He argued that, for comparator purposes, his position was sufficiently similar to a female employee on adoption leave.

In reaching a decision, the EAT considered the underlying purpose of adoption leave and drew a number of material distinctions between it and SPL. Importantly, the EAT said that the purpose of adoption leave extended beyond the mere facilitation of childcare and was intended to give the adopter time to form a bond with and meet the welfare needs of the child. Over and above this difference, an adopter could also elect to begin their adoption leave before the placement of their child, whereas this was not an option with SPL. Lastly, the EAT considered the fact that SPL can commence at any point during the first year of the child’s birth or placement, whereas adoption leave must commence, at the latest, on the date of the child’s placement.

Ultimately, the EAT held that these differences amounted to “material differences” for the purposes of establishing a comparator group under the 2010 Act.  That meant Mr Price could not use them for the necessary comparison and his appeal was dismissed. 

Takeaways for employers

Although the EAT’s decision may not be surprising, it will be welcomed by many employers. The decision provides a degree of certainty as to how the way employers pay SPL will be interpreted by the tribunals. Whilst this is only a first instance decision, employers will take comfort in the outcome of this case. Employers should, however, be mindful of whether such a policy aligns with their company’s values and culture. In many cases, it may not be desirable to have a policy that financially discourages fathers from taking on the “child-rearing” role, but rather to have a policy that is flexible and supports the “modern family” – whatever that may look like.

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Elizabeth Marshall

About Elizabeth Marshall

Elizabeth is a senior associate in the People, Reward and Mobility practice of Dentons' London office, specializing in employment law. Elizabeth works closely with national and international organizations, as well as senior executives, and has more than 10 years of experience advising on the full range of employment law issues, having qualified in 2010.

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