Legal

Can a maternity allowance error amount to sex discrimination?

19 Jul 2021 By Guy Guinan

In light of a recent Court of Appeal ruling, Guy Guinan examines whether a mistake in interpreting regulations is a sufficient reason for a discrimination claim

An employee on maternity leave is entitled to retain all of her contractual benefits with the exception of pay. Sometimes an employer will provide enhanced entitlements that will also allow her to keep her contractual pay for part of the maternity leave period. 

One practical difficulty that can apply in standard or enhanced schemes is determining whether an allowance should be treated as a benefit or pay. If it is a benefit, the employee will be entitled to receive it in full throughout her maternity leave period. On the other hand, if the allowance is pay or remuneration, the employee may have no right to continue to receive it at all during her maternity leave.

In Commissioner of the City of London Police v Geldart, the issue was whether an employer who determines this the wrong way would be guilty of sex discrimination.

Facts

Mrs Geldart was a police officer with the City of London Police. Her terms and conditions of service were governed by the Police Regulations 2003, which provided for a London Allowance to be payable to her.  

When Geldart started her maternity leave, she continued to receive her London Allowance together with her enhanced occupational maternity pay for a period of 18 weeks. However, when her occupational maternity pay entitlement was exhausted and she was switched to statutory maternity pay she stopped receiving the London Allowance. 

Geldart brought a claim against the police for direct sex discrimination relating to the non-payment of the London Allowance after the first 18 weeks of her maternity leave. 

The police argued that the London Allowance was to be treated as pay under the Police Regulations 2003 and she had no entitlement to receive the allowance through her maternity leave period other than as provided for under the enhanced maternity pay scheme.

Decision

It was accepted that there was a distinction between pay and allowance in the Police Regulations 2003. The ‘pay’ section expressly provided that the entitlement to pay was suspended during periods of absence from work, including maternity leave. 

By contrast, the ‘allowance’ section provided that the only condition of an entitlement to an allowance was that the recipient was engaged by one of the London police forces. The condition for eligibility to the London Allowance had therefore been met by Geldart throughout her maternity leave and the police should have continued to pay it to her.

However, even though the Police had not paid her the allowance during her maternity leave the Court of Appeal held that this did not amount to direct sex discrimination. 

It was necessary to look at why the payment had not been made and, in this case, it was the mistaken belief that the allowance constituted pay for the purposes of the Police Regulations. While Geldart’s absence on maternity leave had led to the non-payment of the allowance in full, this did not mean that the reason was based on sex.  

Key point

The decision shows that where an employer has genuinely misinterpreted the entitlement to contractual benefits for a person, it will not necessarily be found to have discriminated against them. It will not be sufficient to establish that the employer’s actions amount to sex discrimination just because the absence is for maternity leave when it was believed that any person who was not available for work would not be entitled to the allowance. 

This highlights that the correct approach when considering a discrimination claim is to focus on why the claimant has been treated in the way that they were. The ‘why’ in this case was that the police had wrongly understood the allowance to be a form of pay and, as such, not payable in respect of any period of absence from duty.

Guy Guinan is an employment partner at Gateley Legal

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