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28 June 2017

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Failure to pay enhanced shared parental pay – an act of discrimination?

Posted by: Sarah Scholfield

The Shared Parental Leave regulations came in to effect in April 2015 and are designed to give parents the freedom to share up to 50 weeks leave and 37 weeks’ pay.

The Regulations do not require employers who offer enhanced maternity packages to match those for anyone taking shared parental leave. Notwithstanding that however, there has been some uncertainty about whether an employer’s failure to do so could amount to an act of direct or indirect discrimination against men.

The Tribunal has recently had to grapple with this issue in Ali v Capita Customer Management Limited.

Facts of the case

Mr Ali’s employment transferred to Capita from Telefonica in 2013 as part of a TUPE transfer. In February 2016 his daughter was born. He took two weeks paid paternity leave immediately following the birth. He notified his manager during his paternity leave that his wife had been diagnosed with post-natal depression. He returned to work after his paternity leave but subsequently made a request to take time off to care for his daughter as his wife had been advised by her doctor to return to work for health reasons. Mr Ali was told by Capita that whilst he would be eligible for shared parental leave he would only receive statutory shared parental pay.

Mr Ali challenged the decision on the basis he was aware that female employees who transferred to Capita from Telefonica at the same time as him were entitled to 14 weeks’ basic pay followed by 25 weeks statutory maternity pay. He raised a formal grievance alleging sex discrimination. His grievance was rejected by Capita and he subsequently issued proceedings in the employment tribunal for direct and indirect sex discrimination and victimisation.

In relation to his direct discrimination claim, Mr Ali accepted that there was a material difference in circumstances between himself and a hypothetical female employee during the first 2 weeks of compulsory maternity leave. In this regard he recognised that this time is unique to women as it relates to a mother’s biological and physiological condition and recovery following childbirth. Following that 2 week period however he did not accept that a women should be afforded any special treatment on the basis both men and women will be performing the same role from that point onwards i.e. caring for a newborn baby. In view of this he argued that he should be entitled to the same pay as a woman would receive in that situation i.e. full pay for 12 weeks. He wanted to take 12 weeks off to look after his daughter but he was deterred from doing so because he would only receive statutory pay and not full pay for that leave.

Capita argued that Mr Ali could not compare himself to a female transferred Telefonica employee because he has not given birth and therefore is not entitled to maternity leave or pay. They also argued that the right to 14 weeks full pay whilst on maternity leave was special treatment in connection with childbirth and therefore should be reserved exclusively for women to ensure they were not disadvantaged by giving birth or taking maternity leave.

Decision of the Tribunal

The Tribunal upheld Mr Ali’s claim of direct sex discrimination. They were satisfied that he could compare his treatment with a hypothetical female comparator after the two week period of compulsory leave. Having done so, Capita’s decision to only pay him statutory pay for the 12 week period rather than full pay amounted to an act of direct sex discrimination.

The Tribunal rejected Capita’s argument that women ought to receive special treatment for the full 14 week period and made it clear that any special treatment connected with childbirth should be limited to the 2 weeks after birth.

Mr Ali’s claim of indirect discrimination was rejected by the Tribunal on the basis it relied on Telefonica’s maternity policy which by definition was not gender neutral. As such, they could not consider an indirect discrimination complaint.

Comment

At first glance the decision in Ali is likely to worry employers who offer enhanced maternity pay packages to female employees. Do these employers now need to mirror those arrangements for individuals taking shared parental leave and pay? The answer at the moment is probably not as this is only a first instance decision and is therefore not binding on other tribunals. We understand Capita are looking to appeal the decision and therefore it would be sensible to await the outcome of any appeal before taking any decisive action. If the decision is upheld however then it would have potentially far reaching consequences for employers who would have to review their current arrangements to minimise the risk of any potential discrimination complaints.

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Sarah is a Solicitor in our Employment Team. Sarah has extensive experience advising employers on a wide range of employment matters including unfair dismissal, discrimination and whistle blowing claims, drafting contracts of employment and dealing with disciplinary/grievance matters. She also regularly advises employees on settlement agreements, disciplinary/grievance matters and unfair dismissal. She is a member of the Employment Lawyers Association. Sarah has been described as “extremely knowledgeable… diligent, sharp” whilst retaining “that all important client focus”.

Sarah Scholfield - Solicitor

To discuss how glaiysers can assist you contact Sarah Scholfield on [email protected] or via 0161 832 4666.

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