Shared Parental Leave and Enhanced Maternity Pay: potential for indirect sex discrimination?

Two appeals heard in the Employment Appeal Tribunal (EAT) in the cases of Capita Customer Management Ltd v Ali, and Hextall v Chief Constable of Leicestershire, result in the findings that although it is not direct discrimination to pay Maternity Pay at enhanced rates in comparison to the statutory rate of pay for Shared Parental Leave, it may still amount to indirect discrimination.

Direct Discrimination?

In the Capita case,  Mr Ali  wished to take Shared Parental Leave ("SPL") to accommodate his wife's wishes to return to work. Mr Ali was informed by his employers that his SPL would be paid at the statutory rate of pay only, and that he was not entitled to the Enhanced Maternity Pay ("EMP") pay offered to new mothers taking Maternity Leave ("ML"). Mr Ali brought a claim for direct discrimination.

Mr Ali alleged that SPL, was analogous to ML as it was for the purposes of caring for the baby, and the reduced rate of pay for SPL as compared to the EMP offered by Capita acted as a deterrent from him taking this leave. The EAT disagreed and held that paying someone on SPL at a lower rate than the EMP offered by the company did not amount to direct discrimination as the two types of leave had different purposes, and were therefore not comparable. The EAT found that the purpose of ML was for the health and safety of women who had recently given birth, and that care for the baby during this time was a consequence but not the main purpose of the leave.

Indirect Discrimination?

In the case of Hextall the EAT considered the context of SPL in terms of indirect discrimination when a male police officer alleged that his employer operated a practice of indirect sex discrimination because his only option for leave after the birth of his child was SPL (paid at the statutory rate), whilst women were able to take ML paid at an enhanced rate. The EAT held that an employer paying EMP to women but only the statutory rate of SPL to men is potentially applying an indirectly discriminatory practice that puts men at a disadvantage. The rationale is that unlike new mothers who can choose to opt for SPL or stay on ML and receive EMP, men only have the option to receive the flat statutory lower rate which does disadvantage them.

The Hextall case has been remitted back to the Employment Tribunal for a decision as to whether on the facts there was indirect discrimination.

What does this mean for employers?

We will need to wait and see what the outcome of the remitted tribunal decision in the Hextall case is in terms of payment of SPL at the statutory rate as compared to EMP, and the link this may have to indirect discrimination. However in anticipation of this decision it may be prudent for employers to give some thought to their rates of EMP and SPL as, although there is the ability to objectively justify indirect discrimination as being a proportionate means of achieving a legitimate aim, it is unlikely that cost savings alone would meet the test of being a legitimate aim particularly when considered alongside the rationale for introducing SPL in the first place.