The Court of Appeal has recently heard two appeals together, in which men on shared parental leave alleged that it was discriminatory to pay them less than women on maternity leave.
Since the introduction of shared parental leave, there has been a lack of clear guidance for employers on the extent to which they can lawfully treat men on shared parental leave differently from women on maternity leave. In this short update, we address some key points arising from the Court of Appeal’s decision. It is a helpful decision for employers, albeit that we understand that both claimants are seeking permission to appeal to the Supreme Court. Watch this space for further developments!
The two claimants elected to take shared parental leave (SPL) on becoming fathers. The pay they received from their respective employers during this time was less than what women received on maternity leave. In these two test cases, the Court of Appeal had to determine whether paying men on SPL less than women on maternity leave was direct or indirect sex discrimination under the Equality Act 2010 (the EqA), or a breach of equal pay law.
The Court of Appeal Decision
The Court of Appeal's decision was resounding – paying men on SPL less than women on maternity leave is not direct sex discrimination, indirect sex discrimination or a breach of equal pay law.
The Court of Appeal considered that there was no direct discrimination because the circumstances of a man on SPL could not be compared to the circumstances of a birth mother on maternity leave. SPL was for childcare purposes whereas a birth mother is afforded special treatment for health and safety purposes (and this special treatment can continue beyond the two-week compulsory maternity leave period). The correct comparator for a man on SPL was a woman on SPL, both of whom would receive the same pay. As such, there was no direct discrimination.
Whilst the indirect discrimination claim could be properly characterised as an equal pay claim, the Court of Appeal nevertheless considered that a policy of paying men on SPL statutory pay only could not be indirect discrimination. It noted that women on maternity leave are materially different from men or women taking SPL, and should, therefore, be excluded from the relevant comparison pool. As such, the policy of paying statutory pay only for SPL did not place the claimant at a particular disadvantage.
Regarding an equal pay claim in respect of contractual SPL pay being less than contractual maternity pay (what was really being claimed, rather than indirect discrimination); the Court of Appeal determined that any such claim would fail. This was because the sex equality clause (which is implied into contracts of employment) does not have effect in relation to terms of work affording special treatment to women in connection with pregnancy or childbirth. This provision was broad enough to cover enhanced maternity pay.
Subject to any appeal, the Court of Appeal's decision removes uncertainty for employers – paying women on maternity leave more than men on SPL is not unlawful discrimination. It also clarifies that there is not some "magic" point during maternity leave when the leave loses its link to the protection of the health and safety of women during the period following pregnancy and childbirth. The purpose of maternity leave is different from the purpose of SPL, which is primarily to facilitate childcare arrangements. Employers may, therefore, continue to treat maternity leave and pay as being different to shared parental leave and pay.
We will provide a further update, if and when any decision is reached by the Supreme Court.