The Employment Appeal Tribunal has recently allowed an employer's appeal against last year's tribunal finding of direct sex discrimination. However, it was not necessarily discriminatory to offer Shared Parental Leave paid at only statutory rate while operating an enhanced maternity pay policy since the purpose of maternity leave is different.
What are the implications of this for employers? In June 2017 we discussed the original tribunal decision in favour of Mr Ali, and 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. Now we've asked for the same expert input on the Appeal outcome.
The background: Capita Customer Management Ltd v Mr M. Ali
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 Mr. Ali's 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, Mr Ali complained to an employment tribunal that his employer had treated him less favourably than its female employees. The tribunal in 2017 agreed. But that was overturned at appeal on 11th April 2018.
Ed Bowyer comments:
When shared parental leave was introduced, employers had to decide whether to match shared parental pay to enhanced maternity benefits. The risk of failing to do so was a sex discrimination claim from a man on shared parental leave seeking to compare himself with a woman on maternity leave.
Capita Customer Services Ltd's recent successful appeal means that it will be harder in future - although not impossible - for male employees to claim sex discrimination when maternity and shared parental leave are paid at different rates.
In Ali, female employees on maternity leave were entitled to 14 weeks' enhanced maternity pay. Shared parental leave was only 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 because his shared parental pay was not enhanced succeeded in 2017. 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".
Overturning the decision, the EAT found that the tribunal was wrong to conclude that the purpose of maternity leave is to allow a woman to care for a child, although in practice she will undoubtedly be doing so. Maternity leave's primary purpose is to safeguard a woman's health and well-being while she is pregnant, after she has given birth or while she is breast-feeding. A woman in the initial stages of maternity leave is therefore not a proper comparator for a man on shared parental leave immediately after a child's birth. The proper comparator would be a woman on shared parental leave, who would not have been paid at an enhanced rate either. In any event, enhanced maternity pay was special treatment in connection with pregnancy or childbirth, so could not give rise to a direct sex discrimination claim.
On the face of it, the decision is good news for employers who pay maternity and shared parental leave at different rates. However, the EAT highlighted that different considerations could arise if a man on shared parental leave tried to compare his position with a woman in the later stages of maternity leave. If a court accepted that the purpose of additional maternity leave, for example, is to allow a woman to care for a child, a comparison between a woman on additional maternity leave and a man on shared parental leave might be possible. Employers who pay extended periods of enhanced maternity pay, but who do not enhance shared parental pay, should consider reviewing their policies.
Jennifer Liston-Smith comments:
In terms of public policy, this decision makes some sense: it protects against 'equalising' downwards! When there was a danger of a tribunal claim for employers enhancing Maternity pay and not Shared Parental Leave pay, then the cheapest and least risky option was to take away the well-paid maternity policy. An unfortunate outcome. That risk motivated the charity Working Families to join in this Appeal.
So in a positive way this EAT decision allows employers to continue to enhance maternity pay without fear, at least for the first 12-14 weeks. It's true that for a birth mother, the 2 weeks' compulsory maternity leave (4 weeks' in a factory) is simply not enough for recovery and a birth mother would not be on an equal footing with her male, or female, partner who has not given birth at that point in needing a period of enhanced paid leave. She is indeed recovering, possibly breast-feeding; and not 'only' caring for the child. How long that period of recovery lasts is hard to say: some would say a minimum of 6 weeks; many would say at least 12 weeks.
Legally, we seem to be nudging towards a ring-fenced length of maternity pay enhancement of 12-14 weeks given the facts in the Ali case. If that period sticks then, if you enhance maternity pay for, say, 18 weeks, might it be that you only have to enhance SPL for 4-6 weeks to be fair?
Beyond questions about recovery time, is it a missed opportunity to gender-neutralise primary parenting?
The best comparator for SPL was agreed to be not a woman on maternity leave but a woman on Shared Parental Leave. If, as with Mr Ali, the woman or man on SPL is taking the leave in order to be the sole, primary, carer then perhaps another really good comparator in those early weeks would be a person of any gender on adoption leave. A huge transition occurs for any new parent and especially so for one taking a significant period of leave as a primary carer.
Adoption is different from giving birth, yet the process still entails multiple - and often physically exhausting - demands and stressors as well as joys. Women and men are equally capable of it. If the employer enhances adoption pay then enhanced SPL for a primary carer should follow. Of course, statutory pay has not caught up: maternity and adoption leave both attract statutory pay for the first 6 weeks at 90% of average salary. SPL only ever attracts the flat rate (just over £145 per week in 2018), so maternity & adoption on the one hand, and SPL on the other, are not born equal so to speak.
And what about truly shared parenting?
Beyond a traditional world of one primary carer, and an eager supporter grinning enthusiastically in the background, we still need to move more coherently towards the fairer, more shared models of parenting many couples now choose. Arguably either partner in a birth or adoption should have their transition acknowledged and be enabled to care; from day one. Then he/she might have a better & more confident role ongoing too. Better for families, and better for the level playing field at work.
The promise of a debate on fuller and better use-it-or-lose-it paternity leave is a good addition to the mix, as proposed by the Women & Equalities Committee. But enhancing SPL in fully flexible ways must be the right thing too, enabling families to self-define in a role-fluid era. That would also include a call to action for the many employers who generously enhance 12 to 26 weeks of SPL but only if taken in the first half year. That is simply not enabling of sharing if the birth mother now has the first claim on that early period. We would need to untether enhanced SPL pay from the date of birth or adoption to have it be fully empowering.