Employment & Pensions E-Bulletin Article
The new regime of shared parental leave (SPL) and pay (ShPP) was introduced on 1 December 2014 but became applicable to babies due or children placed for adoption on or after 5 April 2015 (for more information on the mechanics and process please see our Shared Parental Leave article). Many businesses will now be introducing policies to deal with these new rights and may also be conducting a cost/benefit analysis to decide whether to enhance ShPP in line with pre-existing enhanced maternity pay schemes.
The government's position on this, as set out in the BIS guidance, seems to be reassuring for employers. Its view is that any differences between company pay during maternity leave and during SPL will not amount to discrimination as maternity is a protected right. In order for this to apply, though, the mother must be on maternity leave and not on SPL as any differences in treatment between men and women whilst they are both on SPL could clearly lead to discrimination claims.
However, the view that enhanced maternity pay is protected is, in our view, misleading and over-simplified. Cases in the UK and EU suggest that there could be room for sex discrimination claims to be brought in this context. Whilst the reality of claims remains to be seen and there are hurdles over which a claimant would need to jump, employers should be alive to the risk of future claims.
Risk of discrimination claims
In practice, it will be hard for a man on SPL and not in receipt of enhanced pay to bring a direct discrimination claim where the company offer enhanced maternity pay. This is because employers can argue that the comparator in such a case is a woman on SPL (who is also not in receipt of enhanced pay) and not a woman on maternity leave (and in receipt of enhanced pay) on that basis there would be no less favourable treatment on the grounds of sex. In addition, an extra hurdle is provided by s13 (6) of the Equality Act 2010, which states that when a man is complaining of direct sex discrimination "no account is to be taken of special treatment afforded to a woman in connection with pregnancy or childbirth."
A direct discrimination claim is therefore, on the face of it, going to be a difficult claim to bring. However, UK and EU case law decisions potentially leave room for a man to compare himself to a woman on maternity leave when the purpose of the leave is detached from the aim of protecting the health and safety of the woman as a result of the biological condition of pregnancy and maternity (e.g. Shuter v Ford  and Roca Alvarez v Sesa Start España ). Also a recent case has established that the Equality Act wording does not allow for blanket "special treatment" for women on maternity leave. Instead, any such treatment needs to be a proportionate means of achieving the legitimate aim of compensating "a woman for the disadvantages occasioned by her pregnancy or maternity leave" (Eversheds Legal Services Ltd v De Belin ).
Consequently, the door is left ajar for a man to argue that at some point, after the 2 weeks' compulsory maternity leave period, he is in a comparable position to a woman on maternity leave when the purpose of the leave is to care for the child and not protecting the biological condition of pregnancy and maternity. When this tipping point would be is up for debate. It is unlikely to be before the minimum period of maternity protection under EU law (currently 14 weeks) and another EU decision has suggested it still will not be comparable at 16 weeks. After that there is, in theory, potential for claims arising but we consider unlikely.
There is, however, more scope for an indirect discrimination claim to be brought. A man could potentially argue that offering enhanced maternity pay only to those who have given birth is a provision, criterion or practice (PCP) to which all men (and some women) cannot comply and that he (and other men) are put at a disadvantage as a result. Whether a man can establish that the provision puts more men at a disadvantage than women may depend on statistical evidence of take up of SPL. Further, employers can justify indirect discrimination, provided the PCP is a proportionate means of achieving a legitimate aim. There needs to be a "real business need" and it cannot be based on cost alone.
Justifying not extending enhancements to ShPP
If your business is considering not enhancing ShPP where it does enhance maternity pay, you should look at the legitimate aims now (and gather and keep evidence of the consideration of the legitimate aims) to try and assist you in the event a potential future claim ever needs to be defended.
Whilst the aims of protecting the biological condition of the woman and the special relationship between a woman and her child after pregnancy and childbirth may provide a justification for differences in treatment close to the birth date, following that period employers should look to other legitimate aims relevant to their workplace such as:
- Wanting to recruit and retain more women to a male dominated workforce (this was successfully used by Ford Motor Company in the Shuter v Ford case to justify not enhancing pay for fathers on Additional Paternity Leave although it will not be appropriate in all workforces)
- Wanting to increase the number of women in senior positions
- Addressing problems of women not returning to work after having children
- Addressing issues arising as a result of physically demanding work which causes female staff to have to commence maternity leave early and not return until they are physically fit
- Compensating women for disadvantages arising from maternity such as any impact on career development and promotional opportunities
Options for your business
So, what should you do in terms of enhancing ShPP in line with enhanced MP?
- Offer enhanced ShPP and use it as tool to attract and retain talent (male and female) - many large employers (public and private) are offering enhanced ShPP matched to their maternity leave e.g. the Civil Service, PWC, Deloittes and some law firms. Consider what conditions you want to attach to any enhancements. You could also offer some enhanced ShPP but at a lower level than enhanced MP although this would not remove the risk of discrimination claims it may reduce it
- Wait and see approach – you could assess the level of demand for SPL and make a more informed judgment further down the line (e.g. depending on take up or if a test case is brought). In the meantime you should look to have a justification for the decision as set out above and retain evidence of it
- Reduce maternity pay to fund enhanced ShPP – this may be an unattractive option for employers as it may damage employee relations. Further, if the enhanced MP is contractual, a consultation process (possibly collective) may be required to enforce this change. Alternatively, it could consider limiting the changes to new employees only
Ultimately, the decision of offering enhanced pay or not for SPL will be personal to each business and sector. Cost and employee relations may in practice be more significant drivers than the legal issues. In reality, the take up of SPL may be limited and slow and the risks of claims low. However this is a changing landscape and employers should carefully consider and justify their decisions now in the event future claims are brought. If you have any further questions on this or the SPL regime generally, please do not hesitate to contact us.