Landmark ruling on enhanced shared parental pay

22 Jun 2017 By Alison Woods

A father has successfully argued that his employer’s failure to match enhanced rates of pay when taking shared parental leave amounted to direct discrimination

Despite the government technical guidance stating that there was no legal obligation to match enhanced rates of pay for parents taking shared parental leave (SPL), many commentators considered that failing to do so may result in a discrimination claim by a man. That risk was most likely to arise in the form of an indirect discrimination claim. To minimise risk, employers were encouraged to identify reasons for not introducing enhanced rates for shared parental pay (SPP).

In Ali v Capita Customer Management Ltd, the claimant wanted to take SPL after his wife was diagnosed with post-natal depression and was advised by her GP to return to work. Capita paid enhanced maternity pay for the first 14 weeks of leave and enhanced paternity pay for two weeks, followed by statutory SPP. The claimant asked to be paid the same higher rate as a woman on maternity leave. After his request was rejected, he issued proceedings claiming both direct and indirect discrimination. He succeeded only in relation to the direct discrimination claim.  

The tribunal ruled that the claimant could compare himself to a female employee who was taking leave to care for her child, although this would not apply until after the two-week compulsory maternity leave period.

The tribunal also rejected the argument put forward by the employer that the special protection afforded to women on maternity leave, which allows more favourable treatment, could shield an employer from a challenge to enhanced maternity pay. After the first two weeks, the leave was about caring for the child – it was not special treatment in connection with the mother’s pregnancy or childbirth. The tribunal accepted that, after two weeks, the government had offered parents a choice: that the primary carer under SPL could therefore be the father or the mother. They commented: “In 2016, men are being encouraged to play a greater role in caring for their babies. Whether that happens in practice is a matter of choice for the parents depending on their personal circumstances but the choice made should be free of generalised assumptions that the mother is always best placed to undertake that role and should get the full pay because of that assumed exclusivity.”

Impact on employers

  • Employers should keep track of developments in this area. If the Employment Appeal Tribunal (EAT) was to endorse the reasoning in Ali that the correct comparator is a woman on maternity leave, and that SPL becomes detached from pregnancy and childbirth, this would give claimants the ability to successfully claim direct discrimination, to which there is no defence. A change of approach would therefore be required.

  • It seems likely that Ali will be appealed and, while certain parts of the argument are persuasive, it is perhaps disappointing that less time was spent considering the comparator as this reasoning seems vulnerable to legal challenge.

  • The risk of an indirect discrimination claim continues to pose a threat to employers.

  • In relation to objective justification, the tribunal found that cost alone does not justify the perpetuation of otherwise unlawful discrimination.

  • While clarity is awaited from the EAT, if a request does arise from a man asking for an enhanced level of pay to match maternity pay, we recommend that employers consider individual circumstances and take advice.

Alison Woods is an employment partner at CMS

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