The United Kingdom (UK) Court of Appeal recently held that it is not discriminatory for enhanced shared parental leave pay (mostly claimed by men) to be paid by employers at a lower rate than enhanced maternity leave pay (claimed by women). In two separate appeals that were heard together,¹ the Court of Appeal found that such arrangements are not unlawful. Although it is understood that the claimants are seeking permission to appeal to the Supreme Court, for now, this decision remains good law.

Background

In the UK (as well as many other European countries) there are different types of family leave available depending on the relationship with the child. For example, mothers can get up to 52 weeks maternity leave and fathers can get two weeks of paternity leave. Typically employers will pay some part of salary during this leave as a benefit. A hybrid system was introduced some years ago in which both parents could share 52 weeks of leave between them in any way they wished. This is called Shared Parental Leave and effectively meant men could now avail of a much longer family leave entitlement. Many employers have decided to not pay any salary if an employee chooses this type of leave, and that approach was the focus of this decision.

Facts

The first claimant was the father of a new child and was entitled to two weeks' shared parental leave at full pay under his employer’s policy before switching to statutory shared parental pay. His female colleagues were entitled to maternity pay comprising of 14 weeks' full pay before moving to statutory maternity pay. The second claimant, also the father of a newborn, took 14 weeks of shared parental leave paid at the minimum statutory rate. His employer had a policy allowing for 18 weeks of maternity leave at full pay for new mothers.

Both men brought claims in the Employment Tribunal of unlawful sex discrimination and equal pay. Initially, one claimant succeeded and the other did not. Both decisions were appealed and the Employment Appeals Tribunal decided in both cases that the claimant’s case did not succeed. The claimants subsequently appealed to the UK Court of Appeal, which heard their appeals together. In a well-reasoned judgment, the court dismissed their claims on all grounds as explained below.

Direct discrimination claim

Direct sex discrimination occurs where, because of sex, someone treats one person less favourably than they treat or would treat others.

In determining whether a man has been discriminated against because of sex in the UK, the Equality Act 2010 stipulates that no account is to be taken of special treatment afforded to women in connection with pregnancy or childbirth. Therefore, a man cannot claim that he has suffered direct sex discrimination because he has not been given the same special treatment. For this reason, the claimants’ claims of direct discrimination failed.

Furthermore, the court held that the direct discrimination claim failed because the correct comparator was a female colleague on shared parental leave, not a woman on maternity leave. The court held that the purpose of statutory maternity leave relates to matters exclusive to the birth mother resulting from pregnancy and childbirth (not simply childcare), and that purpose was not altered by the introduction of shared parental leave.

Indirect discrimination claim

Indirect sex discrimination arises from policies, practices or criteria that apply to everyone regardless of sex but have the effect of disadvantaging employees or job applicants of one sex, unless the employer can show that the challenged policies are objectively justified.

The court held that the indirect sex discrimination claim could not succeed because the Equality Act 2010 provides that if a claim is properly construed as an equal pay claim, a claimant cannot also argue sex discrimination. In this case the court found that the claimants’ claims were properly construed as equal pay claims, so their sex discrimination claims were barred by the terms of the statute.

The court clarified that (in the alternative, should their earlier interpretation be found incorrect) an indirect sex discrimination claim would fail as a practical matter because the correct pool for comparison could consist only of employees on shared parental leave who were paid the same amount (not including anyone on maternity leave). In any event, any disadvantage to the claimants could be justified as being a proportionate means of achieving the legitimate aim of providing special treatment to birth mothers in connection with pregnancy or childbirth, which is a stated aim of both UK and European Union law.

Equal pay claim

The Equality Act 2010 implies a "sex equality clause" into all employees' contracts of employment. The law provides that less favourable terms that are based on sex are modified so that they apply equally to all (to the benefit of those who were at a detriment).

Here, the claimants were successful in arguing they had a legitimate equal pay claim and that the equality clause meant they should be paid the same as women on maternity leave. But it was a pyrrhic victory. As the court explained, a claim on this basis could not succeed because the Equality Act 2010 explicitly bars claims of equal pay if they are based on more favourable terms enjoyed by a woman as a result of pregnancy or childbirth.

In short, the claimants’ claims failed on all three grounds.

Comment

This case has divided opinion. Some commentators believe it is a victory for the special place maternity leave has in society, while others bemoan the fact that it may keep men from taking on childcare responsibilities, which may ultimately detract from equality. Despite the moral arguments, employers now have some clarity in how they structure any enhanced family leave payments. Employers that generously enhance maternity leave pay do not need to extend this enhancement to shared parental leave. For now.

With the case highly likely to be appealed to the Supreme Court we suggest employers continue watching this space – as we will be, very closely.