Court of Appeal holds that it is not discriminatory to pay men on shared parental leave less than an enhanced rate paid to women on maternity leave
In the joint appeal of Ali v Capita Customer Management Ltd and Chief Constable of Leicestershire v Hextail  EWCA Civ 900 the Court of Appeal (“CA”) has held that two male claimants did not suffer discrimination when they were paid less on shared parental leave (“SPL”) than an enhanced rate of pay available to a woman on maternity leave.
Mr Ali, employed by Capita Customer Management (“Capita”), and Mr Hextail, a serving police constable in Leicestershire, both decided to take SPL upon the birth of their children. Both Capita and Leicestershire Police offer enhanced maternity pay to female employees taking maternity leave, where they pay full pay for a particular number of weeks. However, they both only pay the statutory rate of shared parental pay (“SPP”) to those taking SPL.
The claimants brought various clams at the outset, but at the Court of Appeal Mr Ali’s case concerned direct discrimination. He claimed that being paid the statutory rate of SPP amounted to direct discrimination on the grounds of sex, as his female colleagues were entitled to full pay for 14 weeks of maternity leave. Mr Hextail’s case included direct discrimination but his appeal also related to a claim of indirect discrimination claim. He stated that the provision, criterion or practice (“PCP”) of only paying the statutory rate of pay to those taking SPL placed men at a particular disadvantage in comparison to women.
The CA’s decision
Mr Ali’s claim
The CA upheld the earlier decision of the Employment Appeal Tribunal (“EAT”), finding that there was no direct discrimination. It held that a female employee on maternity leave was not the correct comparator for Mr Ali’s direct discrimination claim. The correct comparator was a female worker on SPL. Such a comparator would be paid the same as Mr Ali and his claim therefore failed as there was no less favourable treatment.
It reiterated the point that maternity leave and SPL are fundamentally different and serve different purposes, with maternity leave relating primarily to the health and wellbeing of the mother, and SPL concerning the care of a child. The Pregnant Workers Directive (No.92/85) confirms that maternity leave of at least 14 weeks before or after birth is given for the health and safety of pregnant workers and those who had recently given birth or were breastfeeding. This was confirmed by the European Court of Justice in the case of Hofmann v Barmer Ersatzkassem 1985 UCR 731. The Equality Act 2010 (“EqA 2010”) allows for the ‘special treatment’ of women in respect of pregnancy and childbirth, which covers enhanced maternity pay. The CA rejected Mr Ali’s argument that such ‘special treatment’ should be restricted to the first two weeks of compulsory maternity leave.
Mr Hextail’s claim
The CA agreed with Leicestershire Police that Mr Hextail’s claim was properly characterised as an equal pay claim, rather than a discrimination one. This was because he was in effect arguing that his contractual entitlement to paid leave was less favourable than that of his female colleagues.
In equal pay claims the EqA 2010 implies a “sex equality clause” into every contract of employment to ensure parity of terms between men and women. However, there is a clear exclusion where more favourable terms relate to special treatment afforded to female employees in connection with pregnancy or childbirth. Any argument in this regard was therefore brought to a close.
The CA still considered Mr Hextail’s indirect sex discrimination claim and held that it would not have succeeded. When considering whether a PCP has a discriminatory impact, a ‘pool’ of people must be identified for comparison purposes. Such a ‘pool’ needs to be populated by persons whose circumstances are the same as, or not materially different from, the claimant’s. The CA held that women on maternity leave were in materially different circumstances to men (or women) taking SPL and should therefore be excluded from the pool in Mr Hextail’s case. Once that was done and Mr Hextail was compared against other men and women taking SPL, he received exactly the same rate of pay and had not suffered a disadvantage. In any event, the CA found that any discrimination would have been a proportionate means of achieving a legitimate aim (in this case the ‘special treatment’ of mothers in connection with pregnancy and childbirth).
Points to note…
This judgment provides welcome clarification for employers in relation to what has been an area of uncertainty since shared parental leave was introduced. It confirms that employers can have enhanced maternity pay but pay statutory pay only in respect of shared parental leave.
However, it is important to note that the shared parental leave in these cases was taken early on following the birth of the claimants’ children, so their claims related to these early stages when in their cases a female on maternity leave would have received full pay. Things could well be different if a comparison was made at a later stage of maternity leave as it is arguable that the purpose of maternity leave stops being about the health and safety of the mother once a certain period of time has passed.
On a final note, take up of shared parental pay remains low and this is likely to be partly down to the difference between the rates of pay parents would be entitled to. As such, we also wouldn’t rule out changes to legislation in the future to look at ways of addressing this.
We understand that the claimants are seeking permission to appeal to the Supreme Court so this case may crop up again in the future. We will have to watch this space…