Is there a requirement to enhance pay for SPL where an employer enhances pay for Maternity Leave?

Dr Anne Sammon considers the implications for employers following the latest decision from the EAT regarding Shared Parental Leave.

The decision in Capita Customer Management Ltd v Ali provides some comfort for employers offering lower amounts of enhanced pay for those on Shared Parental Leave (SPL) than for those on Maternity Leave. However, it does not go as far as many employers would hope in providing certainty around this difficult question and leaves open the question of whether providing enhanced pay for Maternity Leave of more than 14 weeks in circumstances where this is not provided for Shared Parental Leave might amount to direct sex discrimination.

The facts in Capita Customer Management Ltd v Ali

The Respondent, Mr Ali, was employed by the Appellant, Capita Customer Management Ltd, having TUPE transferred to it from Telefonica.

In February 2016, Mr Ali took two weeks’ statutory paternity leave following the birth of his daughter. As his wife was suffering from post natal depression and wanted to regain some normality, she wanted to return to work after a short period of maternity leave. Mr Ali, on his return to work from paternity leave, explained the situation to his employer and asked HR about taking some time off to care for his daughter. HR confirmed that Mr Ali could take SPL but that this would be unpaid.

Telefonica had offered enhanced maternity pay for the first 14 weeks of Maternity Leave and the Appellant continued to provide this enhanced pay for female employees who had TUPE transferred from Telefonica to it. Mr Ali challenged the decision to allow him to take SPL on an unpaid basis, first by raising a grievance and then by bringing an Employment Tribunal claim.

The Employment Tribunal (ET) decision

The Leeds ET found that Mr Ali had been treated less favourably because of sex by his employer’s refusal to pay enhanced pay for SPL in circumstances where a female employee who had also TUPE transferred to it would have received enhanced pay for the first 14 weeks of maternity leave.

However, the ET distinguished between the two week Compulsory Maternity Leave (“CML”) period and the rest of any Maternity Leave on the basis that during this two week period there was a material difference between Maternity Leave and SPL or that this justified special treatment, because this period of time was related to a woman’s biological/physiological condition and her recovery following childbirth. The ET’s view was that the purpose of leave after the CML period was to care for the child.

The Employment Appeal Tribunal (EAT) decision

The EAT overturned the ET’s decision that the Appellant’s refusal to provide Mr Ali with enhanced pay for SPL amounted to direct sex discrimination. The basis on which it reached this decision is significant though, particularly for employers than offer enhanced pay for Maternity Leave in excess of 14 weeks.

14 weeks is significant because the Pregnant Workers Directive requires Member States to introduce legislation to enable women to take maternity leave with adequate remuneration for a minimum period of 14 weeks.

The EAT found that the ET’s decision that the purpose of maternity leave after the CML period was to care for the child was unsustainable, given the requirement under the Pregnant Workers Directive, whose purpose is stated to be to “encourage improvements in the safety and health at work of pregnant workers who have recently given birth or who are breastfeeding”.

The EAT found that the correct comparator in this case was therefore a woman on SPL, not a woman on Maternity Leave.

Where does this leave us?

Employers that offer enhanced maternity pay for 14 weeks or less should take comfort from this decision that, if they offer less enhanced pay for SPL, this will not amount to direct sex discrimination. The situation for employers offering enhanced maternity pay for longer periods is less clear. Whilst the EAT found that the correct comparator in this case was a women on SPL, this statement needs to be seen in the context of the EAT’s earlier discussion about the requirements to provide maternity leave and adequate pay for 14 weeks under the Pregnant Workers Directive. As such, unfortunately, we still do not have clarity on whether enhancing maternity pay for more than 14 weeks might be challenged on the basis of direct sex discrimination.

We are still awaiting the EAT’s decision in Hextall v Chief Constable of Leicestershire Police, which concerned enhanced maternity pay for up to 18 weeks, which hopefully will resolve the uncertainties left by Capita Customer Management Ltd v Ali.

Previous issues of Anne’s thoughts are available here.

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This document (and any information accessed through links in this document) is provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from any action as a result of the contents of this document.