The case of Ali v Capita Customer Management Ltd is causing some justifiable concern for employers. The decision by the Leeds Employment Tribunal that, failing to offer enhanced pay for Shared Parental Leave (SPL) where the Respondent offered enhanced pay for maternity leave amounted to direct sex discrimination, has potentially significant ramification. But how concerned should employers be about this and what steps should they be taking now?
The decisions in Ali v Capita Customer Management Ltd
The Claimant, Mr Ali, was employed by the Respondent, 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 the HR function about taking time off to care for his daughter. HR confirmed that the Claimant could take SPL but that this would be unpaid.
The Claimant was aware that the Respondent offered enhanced maternity pay for the first 14 weeks of maternity leave for female employees who had TUPE transferred across from Telefonica and challenged the refusal to offer him any pay during SPL, including by raising a grievance. When this was unsuccessful, he brought an Employment Tribunal claim.
In addition to his sex discrimination claim, Mr Ali also successfully brought a victimisation claim concerning his treatment after brought his grievance and filed his Employment Tribunal claim.
The Leeds Employment Tribunal 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 transferred from Telefonica would have received enhanced pay for the first 14 weeks of maternity leave.
The Tribunal, however, distinguished between the first two weeks of maternity leave and the rest of the period, finding that there was a material difference or justified special treatment of a female employee on maternity leave during this two week compulsory maternity leave period, which was related to her biological/physiological condition and recovery following childbirth.
How significant is this decision?
This is a first instance Employment Tribunal decision and therefore it is not binding on any other Employment Tribunal. It is also at odds with an earlier first instance Employment Tribunal decision (Hextall v Chief Constable of Leicestershire Police), which found that, as a matter of law, it was not possible to compare a man on SPL with a woman on maternity leave.
There is also a persuasive argument that Ali has been wrongly decided. Arguably the reason for the difference in treatment between Mr Ali and a hypothetical female employee (who had transferred from Telefonica) on maternity leave is not sex, but the fact that each is on a different type of leave. There are some significant differences between maternity leave and SPL, including, but not limited to the fact that maternity leave can be taken before and after childbirth, whereas SPL can only be taken after the birth of the child and that SPL can effectively only be taken where both parents agree to it, whereas women automatically have an entitlement to maternity leave. In those circumstances, arguably, the correct comparator in this situation is not a woman on maternity leave, but a woman on SPL. Given that no employees were entitled to pay during SPL, Mr Ali would not have been treated less favourably than any other employee, male or female.
What should employers be doing now?
In short, employers do not need to do anything at the moment in response to this decision, although those that offer less pay during SPL than maternity leave may find that employees are citing the decision in Ali in support of any challenge to this practice. Both the Hextall and the Ali cases are understood to be being appealed, so employers should watch out for that decision and take advice accordingly.
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