Is there a risk of indirect sex discrimination if maternity pay is enhanced but shared parental pay is not?
Yes. Although, as I blogged last month, the EAT has confirmed that it is not direct sex discrimination to enhance maternity pay but only pay statutory shared parental pay (Capita Customer Management v Ali), the EAT has decided in a second case (Hextall v Leicestershire Police) that it could be indirectly discriminatory.
What is indirect discrimination?
Indirect discrimination claims can arise if an employer’s policies or practices apply equally to all workers but, in practice, disadvantage a group with a particular protected characteristic. If an individual is disadvantaged they will have a discrimination claim unless the employer can show that their actions were objectively justified i.e. a proportionate means of achieving a legitimate aim.
An employer might seek to justify a higher rate of maternity pay on the basis that it encourages retention or (as was argued in Capita v Ali) there are particular health and wellbeing considerations for mothers in the early period of maternity leave. Cost can be taken into account but cannot on its own justify discrimination.
Mr Hextall took shared parental leave from 1 June until 6 September 2015, and was paid statutory shared parental pay (then £139.58 per week). In terms of the police force’s contractual policy, women on maternity leave and primary carers (of whatever sex) on adoption leave are entitled to full pay for 18 weeks.
Mr Hextall raised claims of direct and indirect sex discrimination which were both rejected by the tribunal. He appealed the decision in relation to indirect discrimination.
What did the EAT decide?
- The employer applied a neutral policy, paying only statutory pay to both men and women on shared parental leave. However, just because a rule is applied equally to everyone does not prevent it from being potentially indirectly discriminatory. It is no answer to say simply that the policy applied equally to men and women.
- For the purposes of an indirect sex discrimination claim, men on shared parental leave can compare themselves to women on maternity leave (unlike in a direct sex discrimination claim). The relevant pool for testing whether or not men suffered a disadvantage over women would be all employees with a present or future interest in taking leave to care for their newborn child.
- An employer which chooses to pay an enhanced rate of maternity pay to women on maternity leave, but only statutory shared parental leave is applying a practice which may put men at a disadvantage. Men have no choice but to take shared parental leave and receive the statutory rate of pay, whereas a mother is able to decide between staying on maternity leave and receiving the higher rate, or opting into the shared parental leave scheme.
- The tribunal had failed to clearly identify the particular disadvantage to which men were put. As a result it could not reach a conclusion on whether men seeking leave to care for a newborn child were put at a particular disadvantage compared to women in similar circumstances.
The case has been sent back to the tribunal to reconsider. It will look at whether the shared parental leave policy is an indirectly discriminatory practice that puts men at a particular disadvantage and also whether the practice, if discriminatory, is capable of justification.
Employers paying different rates for maternity pay and shared parental pay may have been reassured by last month’s decision that there is no risk of direct discrimination in doing so. However, they now need to be aware of the possibility of a challenge to their practice on the basis of indirect discrimination. We will issue another blog when the tribunal decision is published.
In the meantime, if you would like to discuss your current practice and the level of risk, please get in touch with your usual Brodies contact. Workbox subscribers can also access detailed guidance on pregnancy/maternity leave and shared parental leave. Contact us if you are not currently a member of Workbox and would like a free trial.