Is it Indirect Sex Discrimination to Pay Only Statutory Shared Parental Pay but Enhanced Maternity Pay?
Many employers offer enhanced maternity leave benefits, whilst limiting the pay of those taking shared parental leave (SPL) to the statutory rate. A recent case has left some ambiguity as to whether this may be indirectly discriminatory…
Indirect sex discrimination occurs when an employer applies a provision, criterion or practice (PCP) to all but the PCP puts people of one gender at a particular disadvantage when compared with those of another gender, and the employer cannot show that the application of the PCP is a proportionate means of achieving a legitimate aim.
Hextall v Chief Constable of Leicestershire Police
Mr Hextall, a police constable, took a period of SPL following the birth of his second child. He was paid at the statutory rate of pay. Mr Hextall brought claims of direct and indirect sex discrimination on the basis that a female police constable on maternity leave would have been entitled to her full salary during this period.
The Employment Tribunal (ET) concluded that denying Mr Hextall the opportunity to take SPL on full pay was neither direct nor indirect sex discrimination on the basis that both men and women on SPL were entitled to receive the same amount. Mr Hextall appealed, but only with regard to his claim of indirect discrimination.
The Employment Tribunal's Decision
The EAT held that the ET had erred when identifying the relevant pool for comparison for the purposes of the indirect discrimination claim.
For the purposes of the direct discrimination claim (as we very recently reported in Ali v Capita Customer Management Ltd), the correct comparator is a woman taking SPL. However, in an indirect discrimination claim, the purpose of the claim is to consider whether men might be disadvantaged in circumstances where men and women appear to be treated the same. The EAT therefore held that to say that it is not indirectly discriminatory simply because it applies equally to men and women is not a satisfactory answer.
The EAT also concluded that the ET had failed to clearly identify the 'particular disadvantage' to which men were allegedly put by the application of the PCP of paying those on SPL the statutory rate, whilst enhancing the benefits of those on maternity leave, and that this was an important step in assessing whether the PCP was indirectly discriminatory.
The EAT did not rule on what the correct pool for comparison, or what the particular disadvantage, should be but remitted the case to a fresh ET for reconsideration, leaving the door open for a finding that the PCP is indirectly discriminatory.
Best Practice
Once the correct pool for comparison and the nature of the particular disadvantage is correctly identified, it seems possible that the PCP may have a disparate impact on men as compared to women, and it will then be important that employers who apply such a PCP can objectively justify this practice.
It is of note that in the Ali case the EAT concluded that the more favourable pay terms received by mothers on maternity leave would fall within the Equality Act exception which enables employers to treat women more favourably in connection with pregnancy or childbirth. The EAT appeared to accept that the purpose of maternity leave is not just to care for a new-born baby, but also to ensure the health and wellbeing of the mother, and paying enhanced maternity benefits to new mothers in recognition of this fact may be key in enabling employers to justify the difference in treatment.
We will of course up date you on further developments but, at present, our advice remains that you may continue to offer enhanced maternity pay without a legal obligation to extend the same benefit to SPL, but you should give some thought to your justification for doing so.