Failing to enhance shared parental pay may be indirectly discriminatory, finds EAT

Paternity pay decision may have ‘reopened’ doors for similar claims, warn lawyers

Employers that enhance maternity pay but only pay the statutory rate for shared parental leave (SPL) are potentially indirectly discriminating against men, the Employment Appeal Tribunal (EAT) ruled yesterday. 

In Hextall v Chief Constable of Leicestershire Police, the EAT re-examined a tribunal ruling in which Mr Hextall, a serving police constable and new dad, was told that being denied the opportunity to take SPL on full pay was neither direct nor indirect sex discrimination. 

Hextall claimed that, had he been a female police constable on maternity leave (ML), he would have been entitled to his full salary for the period he took SPL. He claimed indirect sex discrimination by Leicestershire Police Force, as the only option for men was SPL at statutory pay.

The EAT found that the tribunal had incorrectly used the same rationale for rejecting women on ML as a comparator for a direct discrimination claim when assessing the indirect discrimination claim. ‘The identifying of a pool’ for testing the impact on men and women was different from direct discrimination claims, as fathers had no choice but to take SPL. 

The EAT remitted the decision to a new employment tribunal to reconsider, and examine whether the practice, if found to be discriminatory, can be justified.

Although the original tribunal hearing also found that Hextall had not been directly discriminated against, he only appealed the indirect discrimination ruling. Just last month, the EAT ruled in Capita Customer Management Ltd v Mr M Ali that SPL taken by men is not comparable to women on ML for direct discrimination purposes. 

Jenny Arrowsmith, employment partner at Irwin Mitchell who represented Capita, said that, while the issue disputed in Ali was direct discrimination, in Hextall it was “whether the police’s policy of enhancing maternity pay for the first 18 weeks but only paying SPL at statutory rates amounted to indirect discrimination.

“Even if this is made out, employers can attempt to justify their policy – by, for example, arguing that enhancing maternity pay promotes loyalty and encourages retention.

“The argument [in Hextall] was that the rate of pay for SPL is the same for both mother and father and the EAT found that it could have a disparate impact on fathers, because they – unlike mothers who can take ML – have no other choice if they wish to take leave to care for their child.”

This decision “leaves open the possibility that an indirect discrimination claim could succeed – although the employer will be able to try and justify it”, Arrowsmith added. 

Sarah Jackson, chief executive of charity Working Families, which intervened in both the Hextall case and the Ali cases, said: “For employers, the question of indirect discrimination remains unresolved and we await a further tribunal decision for greater clarity.”

She urged employers to carefully consider the aims and benefits of enhancing only one sort of parental pay. “We’d encourage employers that can afford to do so to go beyond the minimum pay for SPL, making it a more realistic option for more families,” Jackson said. 

Employers’ justification arguments may be affected by Ali’s conclusions on health and wellbeing considerations for mothers in the early days of their ML, Arrowsmith said.

“These issues were not raised in any detail by the [Hextall] EAT as they were not part of the appeal, but it would likely be an issue in the tribunal case when it is re-heard,” she said. 

Anthony Fincham, employment partner at CMS, told People Management: “The door to indirect discrimination claims has been reopened by this case. Where an employer pays enhanced maternity pay but fails to pay enhanced shared parental pay, it would need to find an objective justification other than cost for this approach. 

“We can expect to see further claims – and the only safe course would be to adopt a consistent approach in enhancing the different benefits.”