Employment and Immigration Law Update – Enhancing maternity pay but not shared parental leave pay

In these conjoined cases, the Court of Appeal held that it was not discrimination on the grounds of sex, or in breach of equal pay rules, to enhance pay for maternity leave but not for shared parental leave.

Ali v Capita Customer Management Ltd; Hextall v Chief Constable of Leicestershire Police
[2019] EWCA Civ 900

Facts

Both Mr Ali and Mr Hextall had taken a period of shared parental leave after becoming new fathers. Both employers paid an enhanced rate of contractual maternity pay but only paid the statutory rate of pay in respect of shared parental leave. Mr Ali’s claim for direct sex discrimination was initially upheld by the employment tribunal, but this decision was overturned by the Employment Appeal Tribunal (EAT) last year. Mr Hextall’s claim for direct and indirect sex discrimination was initially rejected. The EAT held that the tribunal had taken the wrong approach in its consideration of indirect discrimination, so remitted this aspect of the claim to be reheard, potentially leaving open the door for an indirect discrimination claim to succeed. See our previous summary of these decisions.

Court of Appeal decision

The Court of Appeal has rejected the discrepancy in pay as either amounting to direct or indirect discrimination on the grounds of sex, or a breach of the sex equality clause under equal pay legislation.

In relation to Mr Ali’s claim of direct discrimination, the court held that the statutory ‘special treatment’ exception applicable to women in connection with pregnancy or childbirth includes enhanced maternity pay. The predominant purpose of taking maternity leave is to protect a woman in connection with the effects of pregnancy and childbirth, rather than for childcare. Men taking shared parental leave and women taking maternity leave are therefore not comparable under the provisions of the Equality Act 2010.

The court decided that Mr Hextall’s claim was more properly categorised as a claim for equal pay, rather than indirect discrimination, since it relied on his comparator’s more favourable contractual terms for enhanced maternity pay. However, the sex equality clause that would be implied into Mr Hextall’s contract under section 66 Equality Act 2010, is excluded as a result of the ‘special treatment’ exception that applies to women in connection with pregnancy and childbirth. This means that a claim for equal pay failed for the same reason as Mr Ali’s claim for direct discrimination.

In relation to indirect discrimination, such claims are excluded if they would be regarded as an equal pay claim if not for a specific exception – which in this case was the ‘special treatment’ exception. Even without this exception, the court decided that the indirect discrimination claim would fail in any event, due to the fact that women on maternity leave are materially different from men or women taking shared parental leave. Any disadvantage to Mr Hextall would be justified as a proportionate means of achieving a legitimate aim, namely the special treatment of mothers in connection with pregnancy or childbirth.

Consequences

The Court of Appeal has comprehensively dismissed the claims of Mr Ali and Mr Hextall, meaning that for now, employers who enhance maternity pay but not shared parental leave pay can continue to do so without risk of a similar claim succeeding against them. It has been reported that both Mr Ali and Mr Hextall are both seeking permission to appeal their case to the Supreme Court. We will have to wait to see whether permission is granted, and any further hearing is unlikely to be for some months – probably not before the second half of 2020.

This article is from the June 2019 issue of Employment and Immigration Law Update, our monthly newsletter for HR professionals. To download the latest issue, please visit the newsletter section of our website. Law covered as at June 2019.

The content of this article is for general information only. For further information please contact Liz Stevens or another member of Birketts’ Employment Law Team.