What are the implications of this, and other recent tribunal decisions, for employers? We asked Ed Bowyer, Partner and leading employment law specialist at Hogan Lovells, for the legal view, and Jennifer Liston-Smith, our own Director, Head of Coaching and Consultancy, for a wider perspective.
The background: Mr M Ali vs Capita Customer Management Ltd
Capita Customer Management's relevant maternity policy granted women the right to 14 weeks' enhanced pay whilst on maternity leave, However, its Shared Parental Leave policy allowed partners statutory shared parental pay only.
When his wife was diagnosed with postnatal depression and was advised to return to work to aid her recovery, Mr Ali took Shared Parental Leave to care for their new-born baby. When he was paid statutory shared parental leave pay only during his period of leave, Mr Ali complained to an employment tribunal that his employer had treated him less favourably than its female employees. The tribunal agreed.
Ed Bowyer's comments
A key concern for many employers when Shared Parental Leave was first introduced was whether enhancing maternity pay, but not shared parental pay, could be discriminatory. Employment tribunals are beginning to grapple with that issue - but the legal position is not necessarily much clearer.
Hextall v The Chief Constable of Leicester Police
There have been two cases to date in which a tribunal has had to consider whether it is discriminatory for a man on Shared Parental Leave to receive statutory pay when a woman on maternity leave is entitled to enhanced maternity pay. In the first, Hextall v The Chief Constable of Leicester Police, the claim failed. However, in a more recent decision, Ali v Capita Customer Management Ltd, a direct discrimination claim succeeded.
In Hextall, the police force paid enhanced maternity pay to women on maternity leave for up to 18 weeks. Shared parental pay was paid at the statutory rate only. A male police officer who had taken Shared Parental Leave claimed that this was sex discrimination. His claim failed, because the tribunal found that a father on shared parental leave could not compare himself with a woman on maternity leave. The proper comparator was someone in the same circumstances as the man - such as the same sex partner of a child's mother who was taking Shared Parental Leave. As that person (a woman) would not receive enhanced pay either, the sex discrimination claim had to fail.
A starkly different decision was reached in Ali. In that case, a woman was entitled to 14 weeks' enhanced maternity pay. Shared parental pay was again paid at the statutory rate. Mr Ali wanted to take twelve weeks' Shared Parental Leave immediately after his paternity leave, to be his daughter's primary carer while his wife returned to work. His claim of direct discrimination succeeded.
The employment tribunal accepted that a woman on maternity leave, after her compulsory maternity leave period, was an appropriate comparator. In both cases, a parent was taking leave in order to care for a child. There was no reason why that had to be the child's mother, so the more favourable treatment of women could not be said to be "special treatment in connection with pregnancy or childbirth". This meant that Mr Ali did not receive full pay because of his sex and won his claim.
Where does that leave employers?
Tribunal decisions are not binding on other tribunals, so future tribunals will be free to come to their own conclusion. In that sense, these cases do not make the legal position much clearer, although they do ventilate some of the issues that employers with different maternity and shared parental pay policies might have to address in the event of a challenge. Ultimately, the issue is likely to come before the Employment Appeal Tribunal, which will provide greater clarity given that EAT decisions are binding on tribunals.
The decision in Hextall is the more orthodox approach and also reflects a number of European decisions that have found that it is legitimate to give special treatment to women in the period following birth - in particular by giving her a non-transferable period of paid leave so that she is not pressurised into returning to work prematurely. Having said that, the decision in Ali is arguably much more in line with the whole policy behind Shared Parental Leave - that taking care of a child is a matter for both mums and dads, and that they should have equal rights in that regard.
At this stage, employers would be well advised to wait for further guidance from the EAT before amending their Shared Parental Leave and/or maternity policies, particularly given the conflicting tribunal decisions. In the longer term, if the approach in Ali is upheld, it may be necessary to consider equalising maternity and Shared Parental Leave policies. However, it would be very unfortunate - and an unintended consequence of the Ali approach - if the fear of a successful discrimination claim led employers to withdraw enhanced maternity pay in the name of equality.
Jennifer Liston-Smith's perspective
When the then Department for Business Innovation and Skills (now BEIS) published their very helpful technical guide to SPL, there was an explicit assurance that it was acceptable to operate a separate policy in terms of enhanced pay for maternity alongside statutory pay for Shared Parental Leave.
From the Employers' Technical Guide to Shared Parental Leave and Pay:
FAQ 92: Will employers be forced to provide occupational pay for men and women on shared parental leave?
No. It will be entirely at the discretion of employers whether they wish to offer occupational parental schemes for men and women taking shared parental leave. The way in which employers respond to these changes will therefore vary across different employers based on their individual business plans.
There is no legal requirement for companies to create occupational parental leave schemes. However, a maternity scheme can only be offered to a woman on maternity leave. If an occupational scheme is offered to a mother on shared parental leave, it could constitute sex discrimination if such an occupational scheme were not offered to fathers/a mother's partner.
The implication here is that women and men taking Shared Parental Leave must be paid and treated equally, but that a woman taking maternity leave can be treated differently from a person of any gender taking SPL. Mr Ali's case has rocked this assumption: when a father takes up the primary care of the little one, why would or should he be viewed differently?
Enhancing pay equally
As claims and decisions mount on this topic, there will be uncertainty if we base our policies on simply covering legal risks. Meanwhile, the obvious option is to enhance pay equally for maternity (and adoption) and Shared Parental Leave. Legally, this is pretty bullet-proof and it is also the only really progressive stance to adopt.
In a world in which gendered assumptions look increasingly weak, it makes sense that a parent caring for a child receives whatever company enhanced pay is offered by the employer for those who take leave to care for their new child. It also helpfully loosens the connection between being female and being seen as a risk to employ during child-bearing years: the playing field is more open.
Budget is of course the issue - will offering enhanced shared parental pay open the floodgates? Not all couples will share leave anyway and as the cultural change takes hold, the budget for maternity pay can be expected to fall too, as leave is passed over to a partner (usually with a different employer).
It's time to follow the lead of employers who have already matched pay, and to justify it on the grounds of engagement, talent retention and other positive outcomes, rather than simply avoiding discrimination claims.