Employers enhancing maternity pay may need to do the same for men
New shared parental leave and pay rights apply to the parents of babies due, or children matched for adoption, on or after 5 April 2015.
One of the key considerations for employers preparing for the new regime is the thorny question of whether to enhance shared parental pay. While some organisations have decided to match their current enhanced maternity pay provisions, as part of their commitment to family leave and gender/diversity initiatives generally, others are having to weigh up the costs of doing so against the legal risks of not doing so.
Legal position
While the government has encouraged employers to enhance shared parental pay, its view is that they are not legally obliged to do so on the basis that the appropriate person for a male employee to compare himself with is not a woman receiving enhanced maternity pay, but a woman on shared parental leave. Provided men and women taking shared parental leave are treated in the same way for pay purposes, no claim for direct discrimination would arise.
However, the position may not be so clear cut. As men can take shared parental leave from the birth of their baby, the position of men on shared parental leave and women on maternity leave is more similar now than has been the case previously. This potentially paves the way for men to compare themselves with a new mother receiving enhanced maternity pay and to claim direct discrimination where they do not receive correspondingly enhanced pay during shared parental leave.
Even if direct discrimination claims don’t succeed, the risk of indirect discrimination claims remains. This would be on the basis that a policy of only paying enhanced payments to women on maternity leave disadvantages more men than women, because while women have the choice of whether to stay on maternity leave (with enhanced pay) or take shared parental leave, men can only take shared parental leave and not maternity leave.
A recent case, Shuter v Ford Motor Co, highlighted that companies which enhance maternity pay but not pay during additional paternity leave could be open to such indirect discrimination claims. Shuter took 20 weeks of additional paternity leave and was only paid the statutory rate of pay. Ford had a policy of increasing statutory maternity pay up to full pay as part of its drive to improve gender diversity. Shuter claimed that this effectively discriminated against him in comparison with a female employee on maternity leave, who would receive full pay for up to 52 weeks.
Claim risk
The indirect discrimination claim did not succeed because the employment tribunal agreed that while Shuter was treated differently, Ford’s policy of only enhancing maternity pay was objectively justified. This conclusion was heavily influenced by the evidence Ford produced showing that the number of female employees had increased in a workforce where previously they had been under-represented, suggesting the policy really worked. Where a similarly convincing argument cannot be made, an employer that chooses to offer enhanced maternity pay but only statutory shared parental pay may face discrimination claims.
The simplest way to avoid claims is to enhance shared parental leave pay by matching company maternity pay provisions. However, this may not be economically viable, particularly for employers in male dominated sectors or where there are already generous maternity pay provisions. An alternative would be to offer some form of enhancement to pay during shared parental leave. While this may reduce the risk of claims, it does not remove it altogether and employers would need to objectively justify why shared parental leave pay was lower than maternity pay, which may be difficult.
Some employers are planning to review the situation once more information is available regarding take-up levels of shared parental leave, particularly among men. This is not without risk but may realistically be the only option for many employers.
If the lack of enhanced pay for shared parental leave deters men from taking leave, then the government’s aim of levelling the work playing field will not have been met. It is surely only a matter of time before we see cases on this issue – albeit no employer will want to be the first to have their pay policies examined in public.
Marian Bloodworth is a partner in the employment team at Berwin Leighton Paisner
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