In the UK, only female employees are eligible for statutory maternity leave. They are also eligible for statutory maternity pay at a fixed rate during such leave subject to certain conditions – and it is common for employers to pay enhanced maternity pay during periods of maternity leave.
Whilst many employers do not pay enhanced paternity pay to those on paternity leave, it has long been accepted that paying enhanced maternity pay is defensible under the provisions of the Equality Act which state that, when determining whether a man has been discriminated against on grounds of his gender, no account is to be taken of special treatment afforded to a woman in connection with pregnancy or childbirth.
Shared parental leave and pay
In 2015, the new scheme of shared parental leave and pay was introduced for eligible working parents. It allows the mother to choose to end her maternity leave at any time after the compulsory maternity leave period so that the untaken balance of her statutory maternity leave and pay may be taken as shared parental leave and pay by her and the father/her partner.
Government guidance has been that if employers enhance shared parental pay for female employees, they must also do so for male employees to avoid discrimination. But it is not discriminatory to pay enhanced maternity pay but not enhanced shared parental pay.
Employment tribunal and EAT judgments
As we reported in two articles posted last year, nevertheless, in two recent cases, male employees have sought to argue that it is discriminatory for employers to pay enhanced maternity pay to their female employees on maternity leave, but to pay only statutory pay to them whilst on shared parental leave.
It was held by the employment tribunal in one of the cases that this practice was directly discriminatory. The tribunal concentrated on the argument that the payment of enhanced maternity pay could not be defended as “special treatment afforded to a woman in connection with pregnancy or childbirth” because under the new shared parental leave scheme, only the two-four week period of compulsory maternity leave (CML) is kept exclusively for the mother whilst the rest may be shared – therefore the extra pay for mothers after CML was not special treatment in connection with pregnancy or childbirth but with caring for a newborn which either parent could do.
However, the employment tribunal in the second case held that the practice was not discriminatory because the correct comparator for the male employee was not a woman on maternity leave but a woman who had not given birth (the same-sex partner of the mother) who was on shared parental leave. The correct comparator would also have received statutory pay only and so no sex discrimination occurred.
Both decisions were appealed to the Employment Appeal tribunal (EAT) which overturned the decision in the first case and held that no direct discrimination had occurred. In the second case, however, whilst agreeing that paying only statutory shared parental pay to those on shared parental leave but enhanced pay to those on maternity leave, was not directly discriminatory, the EAT held that it was nevertheless possible that this amounted to indirect discrimination and the case was remitted to the tribunal. Both cases have now been considered by the Court of Appeal which handed down judgment at the end of May.
Court of Appeal’s decision
The central issue before the Court in both appeals was whether it is unlawful sex discrimination – whether direct, indirect or in accordance with the equal pay provisions – for men to be paid less on shared parental leave than mothers are paid on maternity leave.
In relation to the claim of direct sex discrimination in the first case, the Court of Appeal stated that the tribunal had been wrong to conclude that following the period of CML, the purpose of maternity leave is childcare. The purpose of maternity leave and pay is to protect the health and wellbeing of a woman during pregnancy and following childbirth and the level of pay is inextricably linked to the purpose of the leave.
The purpose of shared parental leave is different from that of maternity leave/pay. It is for the purposes of childcare and is given on the same terms for both men and women. There is therefore no direct discrimination when an enhanced level of maternity pay is given to mothers on maternity leave but only the statutory rate to either sex on shared parental leave.
In the second case, concerning the claim of indirect sex discrimination, the tribunal and EAT had been wrong to characterise the claim as one of indirect discrimination, rather than one of equal pay – and since the Equality Act precludes an equal pay claim in relation to terms which afford special treatment to women in connection with pregnancy or childbirth, the claim had to be rejected.
The Court added that, in any event, if it had had to rule on the issue of indirect discrimination, it would have upheld the tribunal’s decision that no indirect discrimination occurred.
As a result of this decision, employers who pay enhanced maternity pay but only statutory shared parental pay, can rest easy for now. However, both claimants have applied for leave to appeal to the Supreme Court so there may be one final chapter in the story to come.
