Whether family friendly policies which enhance maternity pay, but not shared parental pay, is discriminatory or not has led to two high-profile Employment Appeal Tribunal (EAT) cases. Here we explain what these decisions mean for these policies, and whether employers are acting unlawfully.
The first case, Ali v Capita Customer Management, focused specifically on direct sex discrimination. The claimant took a period of shared parental leave after his wife was advised to return to work for her health. He was only paid the statutory rate of shared parental pay in line with the employer’s policies. Ali claimed he should have been entitled to full pay for 14 weeks to match the employer’s policy of providing enhanced maternity pay given to women on maternity leave. He claimed not doing so was direct sex discrimination.
The EAT ruled that the claim of direct discrimination was not made out, overturning the original employment tribunal (ET), confirming Capita were able to offer enhanced rates of maternity pay whilst offering only statutory rates for shared parental pay. This was because the purpose of the types of leave are significantly different.
The EAT held the purpose of maternity leave and pay is to protect the health and wellbeing of the mother following childbirth, whereas shared parental leave and pay is to assist parents with childcare. As a result, the claimant could not compare himself to a woman on maternity leave due to the special protections afforded to the mother and therefore no direct sex discrimination had taken place.
The Hextall v Chief Constable Leicestershire Police case saw the claimant accuse the employer of direct and indirect discrimination in near identical circumstances as the Ali case. Hextall claimed only paying statutory shared parental pay whilst paying females 18 weeks’ full pay for maternity leave was discriminatory.
The original ET ruled out the direct and indirect discrimination claims suggesting the claimant could not reasonably compare himself to a woman on maternity leave, instead suggesting the correct comparator would be a female same sex partner who chose to take shared parental leave after her partner had given birth.
Although the EAT agreed the ET was correct to dismiss the claim for direct discrimination they confirmed the ET were mistaken in applying the same comparator test to assess the claim of indirect discrimination. They added that the ET failed to effectively use a pool of individuals to test how the PCP, which in this case was only paying the statutory rate for those on shared parental leave, placed male employees at a disadvantage.
Where are we now?
Both cases confirmed these pay policies are not direct discrimination due to the protected status that is afforded to women on maternity leave.
Uncertainty, however, still surrounds whether offering enhanced rates of maternity pay and statutory shared parental pay will be considered indirect sex discrimination. For more clarity, the Hextall case will need to be reconsidered at the ET.
In the meantime, employers who operate family friendly policies in this will should consider their reasons for doing so; discrimination can be objectively justified by having a legitimate business aim and showing that their practice is the least discriminatory way of achieving the aim.