Maternity, adoption, and shared parental leave

Concerns about sex discrimination in the workplace are not new – but ensuring gender equality remains a challenge for employers, say Rebecca Mahon and Chloe Walsh.

With the pandemic highlighting new and existing disadvantages, it’s important that employers stay aware of the wide range of issues that could give rise to claims of sex discrimination.

One such issue is policies that allow for enhanced payments to employees on adoption leave or maternity leave, but not to employees on shared parental leave. Since its introduction in 2015, there has indeed been no statutory requirement for employers to provide enhanced pay for shared parental leave.

So, does paying a male employee on shared parental leave less than a female employee on adoption leave represent sex discrimination, under the Equality Act 2010? 

In the recent case of Price v. Powys County Council, the Employment Appeal Tribunal ruled that it did not. The claimant, Mr Price, applied for shared parental leave and his employer confirmed he would be paid at the statutory rate. The council’s policy was that employees taking maternity or adoption leave were entitled to enhanced pay above the statutory rate. Mr Price claimed that it was direct sex discrimination for the Council to pay female employees on maternity or adoption leave more than male employees on shared parental leave.

An employee claiming direct sex discrimination will need to show that they have been treated less favourably than a real or hypothetical comparator. Mr Price identified two comparators:

  1. A female employee on maternity leave receiving maternity pay
  2. A female employee on adoption leave receiving adoption pay

Both arguments were dismissed. Mr Price appealed to the Employment Appeal Tribunal, which confirmed that the Tribunal was right to follow established case law to reject the first comparator. The Court of Appeal in Ali v Capita Customer Management Limited  and Hextall v The Chief Constable of Leicestershire Police held that a male employee on shared parental leave receiving statutory pay could not compare himself to a female employee on maternity leave – the correct comparator was a female employee taking shared parental leave.

Why is shared parental leave different from maternity and adoption leave?

The main focus when deciding on appropriate comparators has been the purpose of different types of leave. The Court of Appeal in Ali and Hextall concluded the predominant purpose of maternity leave was not childcare, but other matters exclusive to the birth mother resulting from pregnancy and childbirth and not shared by the husband or partner.

Therefore, a man could not compare himself to a woman taking maternity leave because their circumstances were materially different. Notably, maternity leave is in part compulsory, can begin before birth and is an immediate entitlement even where there was no child to look after. Whereas shared parental leave is entirely optional, can only be taken after birth and with a partner’s agreement, is dependent on the mother choosing to give up statutory maternity leave and requires there to be a child to look after.

In Price vs. Powys County Council, Mr Price accepted that the purpose of maternity leave was different to shared parental leave. However, he argued that adoption leave could be compared to shared parental leave, as both shared the same aim to facilitate childcare. The Employment Appeal Tribunal rejected this argument, and confirmed that like maternity leave, the sole purpose of adoption leave was not childcare, making it difficult to compare with shared parental leave.

Direct or indirect discrimination?

Although Mr Price only argued that his employer’s policy was direct sex discrimination, previous claimants have attempted to argue that not paying enhanced shared parental leave is also indirect sex discrimination.

Indirect sex discrimination occurs when a provision criterion or practice (PCP) applies equally to all but puts a certain group of employees at a particular disadvantage because of their sex. A pool for comparison is usually identified, containing both persons who are disadvantaged and persons who are not. The pool must contain people whose circumstances are the same as, or not materially different from, the claimant.

The argument of indirect discrimination is that the PCP of paying only the statutory rate of pay for employees taking shared parental leave causes a particular disadvantage to men, when compared with women, as they are more likely to take that type of leave. This was dismissed by the Court of Appeal in Ali and Hextall, who found no particular disadvantage to men. Female employees on maternity leave could not be part of a comparison tool, as their circumstances are materially different from men or women taking shared parental leave.

Even if there was a particular disadvantage for men, the Court held that this would be justified as a proportionate means of achieving a legitimate aim, namely the special treatment of mothers in connection with pregnancy or childbirth.

What are employers are doing in practice?

Several high-profile employers have announced their intention to pay enhanced shared parental pay to equalise the benefits available to male and female employees. This includes the civil service, and some large law and accounting firms.

Some employers, especially those with largely male workforces, have expressed concern that the additional cost of paid leave to men will outweigh any corresponding reduction in maternity pay for women, and may be considering reducing the amount of available maternity pay to fund shared parental pay for men.

One of the greatest reasons for low take up of additional paternity leave (the predecessor of shared parental leave) was thought to be the low level of pay available. Take-up of shared parental leave is likely to be much higher among employers who offer an enhanced level of pay.

While the court has made it clear that failure to pay enhanced shared parental leave does not amount to sex discrimination, employers should keep family-friendly policies under review and consider whether there are any other vulnerabilities.

If you have any questions or would like help to review your policies, you can contact us here.

This article was initially published on the website of our sister company, Capital Law.