Parental pay and Enhanced Maternity pay

Employers not obliged to match shared parental pay to enhanced maternity pay

The Court of Appeal’s recent decision in the combined cases of Ali v Capita Customer Management Ltd and Chief Constable of Leicestershire Police v Hextall brings welcome news for employers.

The Court found that not paying male employees enhanced shared parental pay (SPP), equal to female employees enhanced maternity pay, did not amount to direct or indirect discrimination, nor did it breach the “sex equality clause” implied into employment contracts by the Equality Act 2010.

The court made the following key findings:

Mr Ali’s claim of direct sex discrimination failed because he had incorrectly compared himself to a woman on maternity leave. The correct comparator – a necessary part of any direct discrimination claim – was a female colleague on shared parental leave, who would have been paid the same. The rights of a woman on maternity leave were unique and therefore she could not be a comparator as alleged;
Mr Hextall’s claim, correctly interpreted, was a claim that women had more favourable contractual terms, as they were permitted to take time off to care for their babies, and that was a breach of the sex equality clause. However, such a claim was always doomed to fail. The sex equality clause cannot be relied on where the difference arises from the special treatment afforded to women in connection with their pregnancy and/or childbirth; and
A claim of indirect discrimination, based on similar arguments, must also fail. Mr Hexall and Mr Ali had to identify a pool of individuals, whose circumstances were the same as theirs, who were disadvantaged by a provision, criteria or practice (i.e. not receiving the same level of SPP). That pool could not include women on maternity leave, given the special nature of that entitlement. Once women on maternity leave were excluded from the pool, the claimants were not disadvantaged compared to others. In any event, enhanced maternity pay could be objectively justified.

Hannah Pryce comments:

“This case is welcome news for employers who would otherwise be conflicted between wanting to offer enhanced maternity pay – a key tool to help retain female talent and, in turn address the gender pay gap – and the risk of discriminating against male employees. The claimants may yet appeal to the Supreme Court, however, so watch this space!”

If you require any further advice or assistance, please contact a member of the team.

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