Case update (1): Sex discrimination and shared parental leave pay

The EAT confirmed in the case of Hextall v Chief Constable of Leicestershire police it is possible that not enhancing shared parental pay to the same rate as maternity pay could be indirect discrimination on the grounds of sex.

The EAT did not come to a decision as to whether the employer had indirectly discriminated (it returned the case to Tribunal), but it did provide some helpful guidance which we explore further below.

Summary:  Is it indirect sex discrimination not to pay full salary to a father taking shared parental leave, in circumstances where a mother taking maternity leave during the same period would have received full pay?

It may be, says the EAT in Hextall v Chief Constable of Leicestershire police, available here.

Background:  Indirect sex discrimination occurs when an employer has a provision, criterion, or practice (“PCP”) which applies to everybody but results in one sex (in this case men) being put at a disadvantage. Unlike direct discrimination, it is possible for an employer to justify indirect discrimination.

Facts:  The employer, Leicestershire Police, paid 18 weeks enhanced maternity pay to mothers on maternity leave but only paid statutory pay to parents taking shared parental leave. The employee, Mr Hextall, took 14 weeks shared parental leave in the period that, if he had been a woman on maternity leave, would have entitled him to full pay.

The employee brought a Tribunal claim that this non-payment of full pay amounted to both direct and indirect sex discrimination.  For the indirect discrimination claim, the PCP was that Leicestershire Police only paid statutory pay to parents taking SPL. The Tribunal held that this PCP did not put men at a disadvantage because the same amount was paid to men and women on SPL. The Tribunal felt that the employee’s true case was that men were not disadvantaged by the PCP but disadvantaged by the fact they cannot get pregnant (and that was not capable of being indirect sex discrimination). The Tribunal dismissed both claims.

The employee appealed the finding of indirect sex discrimination to the EAT.

The EAT held that the Tribunal had not properly considered the test for indirect discrimination.   The EAT accepted the employee’s case that the relevant PCP was the practice of paying only the statutory rate of pay for those taking shared parental leave.  The EAT further held that:

• the Tribunal was wrong to conclude that because the PCP applied to men and women equally, there could be no indirect discrimination;
• the Tribunal had not properly identified the disadvantage relied on.   The EAT summarised the disadvantage as because a man is “proportionately less likely to be able to benefit from an equivalent rate of pay when taking leave to act as the primary carer for his child to that received by a woman on maternity leave“. That is because men have to take SPL whilst women who have given birth can choose to take maternity leave or SPL; and
• the Tribunal should not have excluded women on maternity leave from the pool for considering whether fathers were disadvantaged by the PCP.  Rather, the pool should include all employees with a present or future interest in taking leave to care for their newborn child.

As there were insufficient findings of fact in the Tribunal’s decision to determine the appropriate size and composition of the pool, the claim was remitted to be reheard by a fresh Tribunal.

The question of who should be in the pool for comparison, is likely to be the most difficult issue before the Tribunal. The EAT acknowledged this challenge and suggested that the appropriate place to deal with the difference in circumstances between women taking maternity leave and men taking SPL was when the Tribunal considers whether an employer can justify indirect discrimination.

Implications:  Unfortunately this EAT decision has not delivered the certainty that employers need in this area.

The risk remains that only paying statutory pay to a man on SPL will be found to be indirect discrimination as it disadvantages men. It would then fall to the employer to justify the discriminatory treatment. This requires an employer to show the existence of a legitimate aim that corresponds to a real business need (costs savings alone will not be sufficient).  However, even where a legitimate aim is identified, it would need to be shown that the PCP was a proportionate means of achieving that aim i.e. that it was reasonably necessary and there were no less discriminatory means available.

Given the above, it would be sensible for employers who pay different rates for maternity leave and shared parental leave to consider (and record) their justification for doing so. Based on the EAT conclusions in Ali v Capita Customer Management Ltd (see our Newsflash Sex discrimination and shared parental leave pay), justification should be easier the shorter the period of enhanced maternity pay. That is because in the period following birth, a mother is still likely to be recovering (and may be breastfeeding) and an employer will be able to assert that it does not want her to compromise her health and feel rushed to return to work for financial reasons.

There are no clear answers as yet but we will continue to follow this line of cases and let you know if and when we have a steer from the Tribunal as to how different rates of pay can be justified.