Shared Parental Leave – parallels with recent case on paternity pay

As the introduction of the new right to Shared Parental Leave edges closer, employers who currently offer enhanced maternity benefits will be reviewing their policies and considering whether they will be able to mirror these enhancements for employees who take shared parental leave.  Will any disparity amount to unlawful discrimination?  We consider the impact of the recent case of Shuter v Ford Motor Co Ltd in which it was concluded offering less paternity than maternity pay was lawful.

16th September 2014

Case Summary

In the recent case of Shuter v Ford Motor Co Ltd, the Employment Tribunal held that the employer, Ford, did not discriminate against its male employees by paying only the statutory rate of additional paternity pay whilst female employees on maternity leave were entitled to enhanced maternity pay of full salary for up to a year. The male employee in this case brought claims of direct and indirect sex discrimination.

In bringing the direct discrimination claim, the employee sought to compare himself to a woman on maternity leave – who received full pay while he received the (much lower) statutory amount.  The Tribunal did not accept that this was the correct comparator, as additional paternity leave can also be taken by a female partner of the mother.  The correct comparator should have been a female partner taking additional paternity leave. As a female employee at Ford taking additional paternity leave would also have received statutory pay only, the Tribunal held there was no direct sex discrimination.

However, when it came to indirect discrimination, the Tribunal found that the policy of paying full pay to women on maternity pay was a ‘provision, criteria or practice’ which placed men at a particular disadvantage.  Therefore, a preliminary case of indirect discrimination was made out.  The Tribunal then looked at objective justification.  The Tribunal held that Ford’s actions were justified as they amounted to a proportionate means of achieving a legitimate aim.  The relevant legitimate aim in this case was that Ford wished to recruit and retain women into a predominantly male workforce.  It argued that offering generous maternity benefits was a proportionate way of achieving this – and the Tribunal agreed.  However, justification on these grounds will not be available to all employers, as this was specific to the industry in which Ford were working.  Ford relied heavily on evidence that women were under-represented in its particular workforce and was able to show the Tribunal that the recruitment and retention of female employees had improved as a result of the enhanced maternity pay put in place.

It is worth noting that Ford is an Employment Tribunal decision, and so is only of interest to other Tribunals but is not binding on them.  The case may, however, be relevant to the new shared parental leave regime.

What about Shared Parental Leave?

As the introduction of the new right to Shared Parental Leave edges closer, employers who currently offer enhanced maternity benefits will be reviewing their policies and considering whether they will be able to mirror these enhancements for employees who take shared parental leave.  They will also be considering whether they will be at risk of discrimination claims if they do not mirror benefits.

If maternity pay is enhanced but shared parental pay is not, then using the Ford analysis, a direct discrimination claim in such circumstances is likely to fail.  However, to successfully defend a claim for indirect sex discrimination in these circumstances, an employer will need to put forward a convincing argument that the decision to enhance maternity pay, but not shared parental pay, was a proportionate means of achieving a legitimate aim.  Employers would need to consider carefully their justification for a difference in treatment.  It is important to remember that cost implications alone would not be sufficient to justify a disparity between shared parental pay and maternity pay.

The government has previously announced that offering enhanced maternity pay, but only statutory (or a lesser amount of) shared parental pay will not be discriminatory.  This view is based on the fact that pregnancy is treated as a special circumstance in UK law which requires protection, essentially meaning that difference in treatment which derives from pregnancy or childbirth is automatically justified.  However, several commentators remain concerned that employers who offer enhanced maternity benefits, but do not offer similar enhancements for shared parental leave, could  face indirect discrimination claims.  If the employer is unable to justify the difference in treatment such claims would succeed.

To complicate matters further, a European case from 2009 potentially contradicts the UK Government’s claim that a decision not to enhance shared parental leave will not amount to discrimination.

Roca Alvarez v Sesa Start Espana ETT SA

In this case, a claim was raised by an employee in respect of breastfeeding legislation in Spain.  The legislation was introduced in the 1980s to promote breastfeeding and allowed female employees time off to breastfeed.  The legislation has been amended since to include bottle-feeding so could now apply to men and women equally.  However, a father is only permitted to take time off if both he and the mother are employees (not necessarily for the same employer).  For the mother to take time off, only she had to be employed.

A challenge was raised by a male employee under the Equal Treatment Directive.  The Court of Justice of the European Union (CJEU) accepted that steps which were taken to protect a women’s biological condition during and after pregnancy and to protect the special relationship between mother and baby would not be in breach of the Equal Treatment Directive.  However, the CJEU considered that time spent bottle-feeding was time purely devoted to the child (rather than the mother) and was a measure that reconciled family life and work following maternity leave.  Therefore there was no exemption from sex discrimination for special treatment for women and the fact that the man’s rights were sub-ordinate to the women’s rights was unlawful sex discrimination.

Applying this logic to shared parental leave, it could be argued that, other than in respect of the 2 week compulsory maternity leave period, the remainder of a women’s maternity leave is simply relating to ‘childcare’ rather than to pregnancy or to protecting the mother following child-birth, particularly given that she is free to share that leave with her partner after the first two weeks.  If this argument were to be successful, then the logical conclusion is that women and men should be treated equally if they take leave to look after the child after the first 2 weeks, whether that be through maternity leave or shared parental leave. If so, employers who choose not to enhance shared parental leave but do enhance maternity leave could be challenged and would act unlawfully unless they can justify the difference in treatment as Ford managed to do in the Shuter case.  There could also be a legal challenge to the Statutory Maternity Pay scheme, which currently offers enhanced benefits to women for up to 6 weeks and does not enhance paternity pay or shared parental pay in the same way.

This is an issue which is likely to remain unclear until there is a legal challenge on this specific point.  Whilst some employers will choose to treat shared parental pay in the same way as maternity pay, many employers may be hesitant to commit to enhancing shared parental leave until the legal position is clarified.  For those adopting a ‘wait and see’ policy, consideration will need to be given to the internal and external messaging about that approach.

If you don’t currently enhance maternity pay and have no plans to do so, then private sector employers have no obligation to enhance shared parental pay under the UK legislation.  Although possibly a remote prospect, public sector employers could potentially face a challenge to the lawfulness of the shared parental pay scheme, as male public sector workers would be entitled to rely directly on European Law, which they could argue requires them to be treated equally with women once the special protected period around pregnancy and child-birth has ended.