Shared parental pay

22 May 2018

The government had hoped that the introduction of shared parental leave in 2015 would help to address this societal difference. The legislation allows for either parent to take leave flexibly in the first year of their child’s life if the mother curtails her maternity leave.

Shared parental leave is paid at a statutory rate. Many employers pay an enhanced rate of maternity pay, but less employers have chosen to do the same for shared parental pay. This is thought to have contributed to the slow uptake for shared parental leave (as low as 2% according to the Department for Business recently).

In Capita v Ali, Mr Ali raised an employment tribunal claim against his employer for direct sex discrimination when he was not given enhanced shared parental pay, in line with the enhanced maternity pay that a woman on maternity leave would have received. Mr Ali argued that as the shared parental leave regime allows parents to choose which of them takes leave to care for their child (after the mother’s two-week compulsory maternity leave period) it was discrimination if a man was not paid the same as a woman for the remaining leave. The tribunal agreed with him, highlighting that men were now being encouraged to take a greater role in childcare and there should not be an assumption that the mother is always best placed to do that.

The Employment Appeal Tribunal disagreed. Women who gave up their maternity leave and instead took shared parental leave with the father were not paid enhanced shared parental pay. They were paid the same as men – the statutory rate. The purpose of the relevant EU legislation on maternity leave is the health and wellbeing of the pregnant and birth mother, rather than the care of the child. Mr Ali should have been compared with a woman on shared parental leave and not a woman on maternity leave. He was paid the same as a woman on shared parental leave, so he lost his sex discrimination claim.

It is worth noting that Mr Ali’s case concerned an employer’s policy that only provided enhanced contractual maternity pay for the first 14 weeks and so fell squarely within the minimum leave and pay period set out in the Pregnant Workers Directive for the health and wellbeing of the birth mother. Interestingly, the EAT did comment that, as suggested by Working Families (who intervened in the appeal), after 26 weeks (the Ordinary Maternity Leave period) the purpose of maternity leave might change from biological recovery from childbirth and the special bonding period between mother and child. It may be possible after that to draw a valid comparison between a father on shared parental leave and a mother on maternity leave. As such, the EAT appears to leave the possibility of a challenge to policies offering enhanced maternity pay in excess of 26 weeks but not enhanced shared parental leave pay.

We expect further case law in this area. For now, you should ensure that you pay men the same shared parental pay rate as you pay women who take shared parental leave.

In an era in which traditional gender roles are changing, with more men taking an active role in child rearing from an early age, if you offer enhanced maternity pay you may want to mirror this for shared parental pay. Ask yourself:

  • Will an enhanced shared parental leave pay policy assist in attracting and retaining talent?
  • What are the potential discrimination risks versus costs if you offer enhanced maternity pay in excess of 14 or 26 weeks but do not do the same for shared parental leave pay?

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