How will the Court of Appeal’s decision impact the use of enhanced maternity pay?
In recent times, there has been an increased debate on the legal implications of employers offering enhanced maternity pay to women on maternity leave, but only statutory shared parental pay to employees when on shared parental leave. This has centred around two notable cases, Ali v Capita Customer Management Ltd and Hextall v CC Leicestershire Police, in which the Court of Appeal ruled the practice did not qualify as sex discrimination.
Ali v Capita Customer Management Ltd focused on direct discrimination, with the claimant trying to argue that a female on maternity leave was a suitable comparator to himself. The Court disagreed and stressed that the purpose of maternity leave is not just childcare, unlike shared parental leave, but for other important areas that are exclusive to the birth mother. The material circumstances of a female on maternity leave were adjudged to be too different to qualify as a comparator, with the Court adding that a suitable comparator would have been a female on shared parental leave.
Hextall v CC Leicestershire Police was dealt with as an equal pay claim and cited section 66 of the Equality Act 2010, which states that any less favourable contractual terms on the basis of sex should be modified and made equal. However, the Court denied this claim as Schedule 7 of the Act states that the sex equality clause will be invalid when terms have been introduced to provide special treatment to women in connection with pregnancy or childbirth.
In light of these decisions, it is important to think about the practical implications for employers. The good news is that employers may continue to pay women on maternity leave higher than the statutory rate of maternity pay without needing to increase the rate of shared parental pay. Alternatively, those who currently only offer statutory maternity pay may now safely increase their offering which may prove valuable in recruiting and retaining top talent, especially given the ongoing skills shortage in the UK.
Despite these rulings, it is worth noting that employers cannot pay men and women different rates of shared parental pay when both are requesting this particular type of leave. Therefore, employers must pay all staff the same rate of shared parental pay, regardless of their gender, to avoid claims of discrimination.
Having said this, family friendly leave and pay will likely remain a sensitive topic in the workplace and there is nothing to say this ruling will prevent staff from raising their own grievances over enhanced maternity pay. It is important that any complaints are handled in an appropriate manner, meaning line managers and HR professionals should be made aware of relevant employment law cases and feel comfortable answering any concerns disgruntled employees may have.
This ruling effectively means that is it ‘business as usual’ for employers who provide staff with enhanced maternity pay, but only statutory shared parental pay. Nevertheless, equal pay and sex discrimination will continue to be a pressing issue going forwards and employers should be alert to any future developments, including whether the claimants choose to appeal these decisions further with the Supreme Court.