Payment for Shared Parental Leave & Maternity Leave
Is it unlawful discrimination on the basis of sex – whether direct, indirect, or because the operation of the sex equality clause implied into all terms of work by the Equality Act 2010 (“the EA”) – for men to be paid less on shared parental leave than birth mothers are paid on statutory maternity leave?
It is not unusual for employers to have different rates of pay for birth mothers on maternity leave and those who are taking shared parental leave. This pay differential has been the subject of challenge in a number of Employment Tribunal claims and now we finally have a decision of the Court of Appeal on the subject. The short answer is no it is not unlawful.
The case is Ali v Capita Customer Management Ltd  EWCA Civ 900 which was a joined appeal of three cases.
What was it about?
Whilst the facts differed in all three cases what was common to all three was that pay for female employees taking maternity leave was paid at a higher rate than employees taking shared parental leave.
Three heads of claim were pursued in the claims: Direct sex discrimination; indirect sex discrimination; and Equal Pay.
What did the Court of Appeal think?
The Court of Appeal had to address each case on its individual facts including in two of the three cases a review of the specific regulations relating to Police Constables. The judgment is quite lengthy and undertakes a thorough review of both domestic and EU legislation and case law. However the reasons for the decision can actually boiled down to the different purposes for which maternity and shared parental leave are provided.
Shared parental leave is provided in order to enable parents to look after their new-born children.
Maternity leave is restricted to the birth mother. The purpose of maternity leave whilst it includes childcare also addresses matters exclusive to the birth mother resulting from pregnancy and childbirth which are not shared by the husband or partner. This importantly includes a period of time after childbirth. The reasoning is set out in paragraph 25 of the of Case C-184/83 Hofmann v Barmer Ersatzkasse  ICR 731.
“…it is legitimate to ensure the protection of a woman’s biological condition during pregnancy and thereafter until such time as her physiological and mental functions have returned to normal after childbirth; secondly, it is legitimate to protect the special relationship between a woman and her child over the period which follows pregnancy and childbirth, by preventing that relationship from being disturbed by the multiple burdens which would result from the simultaneous pursuit of employment.”
Having established the unique position of a birth mother under both European and domestic legislation after childbirth, it then follows that there could be no direct discrimination because the correct comparator is with someone taking shared parental leave and not the birth mother taking maternity leave. This is spelt out in S 13(6)(b) Equality Act 2010 which provides that in such a case no account is to be taken of special treatment afforded to a woman in connection with pregnancy or childbirth.
Equally there can be no basis for an equal pay claim as pay in respect of maternity leave applying the same reasoning. A similar exception is found in Schedule 7 para 2 to the Equality Act 2010 which provides that a sex equality clause does not have affect in relation to terms of work affording special treatment to women in connection with pregnancy or childbirth
Finally, despite there being no corresponding provision in respect of an indirect discrimination claim in the Equality Act 2010, there could be no basis for an indirect discrimination as the pool will include all those on shared parental leave (both men and women) and not those on maternity leave as birth mothers are in a materially different position. The Court of Appeal went on to observe that it would be odd indeed if indirect discrimination was in some way able to circumvent the special treatment to women in connection with pregnancy or childbirth and require an Employment Tribunal to decide whether the pay disparity was justified.
What can we take away?
Employers can continue to pay different rates of pay in respect of maternity and shared parental leave without risking a sex discrimination-based claim.