Shared Parental Pay can be lower than Maternity Pay

The Court of Appeal has given its judgment in the much anticipated combined appeals of Ali v Capita Customer Management Ltd and Chief Constable of Leicestershire v Hextail.

The question before the court was whether it was discriminatory to pay men taking Shared Parental Leave less than any enhanced Maternity Pay given to women on Maternity Leave.

The court heard arguments in relation to direct discrimination, indirect discrimination and equal pay, and on all grounds found that there was no discrimination.

In terms of direct discrimination, the Court of Appeal held that men on any type of parental leave are not in a comparable position to women on maternity leave, as, pursuant to the Pregnant Workers’ Directive, “the predominant purpose of [Maternity Leave] is not childcare but other matters exclusive to the birth mother resulting from pregnancy and childbirth”.

In terms of an equal pay claim argument and an indirect discrimination argument, the Court acknowledged that under the Equality Act 2010 (“EA”), the sex equality clause implied into all contracts of employment does not apply where discrimination is specifically excluded elsewhere in the EA. Schedule 7, paragraph 2 of the EA provides that special treatment given to women in connection with pregnancy or childbirth is permitted even where the result may be that there is inequality between the sexes, and therefore the claims under these grounds failed.

This decision will have provided comfort to employers who provide attractive enhanced Maternity Pay schemes to encourage women to remain with and return to their organisation as they can continue to do this without having to decide whether to take on the financial burden of extending it to the other forms of leave, or removing it. However, with the take up of Shared Parental Leave nationally still low, with often the reason for the low take-up being cited as the financial impact on families, culturally the question is whether it would be a positive step forward for more organisations to offer enhanced Shared Parental Leave too. The impact this would have on the workforce is difficult to measure, but with an increasing number of employees seeking that ever-elusive work-life balance, it may be that the organisations who offer enhanced packages for all family-related leave might reap the dividends of a loyal and grateful workforce.

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