Shared parental leave, the toddler years: the impact and cost of sharing leave

It's now two years since the first babies were born in the UK whose parents were freely able to choose how to divide up the leave to look after them. The introduction of shared parental leave for babies born or children adopted after 5 April 2015. Are we now living in a Scandinavian utopia, where nearly all men take parental leave to care for their children while their female partners return to work?

No.

Around 285,000 UK couples are estimated to be eligible every year for shared parental leave, but the Department for Business, Energy and Industrial Strategy (BEIS) says that take-up rates may be lower than 2%,

Take up is thought to be so low because of a lack of knowledge about shared parental leave (in one survey, half the public were found to be unaware of the scheme), cultural barriers and financial concerns.

BEIS plans to spend £1.5m on a publicity campaign to better inform parents about the policy – but this article sets out what they might want to say.

What is shared parental leave?

Shared parental leave allows working parents to share up to 50 weeks of leave, 37 of them paid at statutory levels. Each family can decide which parent takes leave, when the leave is taken, and even to take leave at the same time if they choose to do so.

Mothers are still entitled to up to 52 weeks' maternity leave, with 39 weeks' statutory pay. However, after the compulsory two weeks' (or four weeks', if she works in a factory) compulsory maternity leave immediately after the birth, she can choose to end her maternity leave and pay and if both parents qualify, enter into an equivalent period of shared parental leave with her partner.

As of April 2018, maternity leave is paid at statutory rates of 90% for the first six weeks (or £145.18 if lower), and then 33 weeks at the lower rate of £145.18. Shared parental leave is paid only at the lower £145.18.

Her partner is also entitled to up to two weeks of paternity leave, paid at £145.18 per week.

Some employers choose to pay enhanced rates of pay to employees taking family leave, but there is no obligation to do so.

The financial cost of shared parental leave

Research has suggested that one of the principal reasons the take up of shared parental leave is low is pay. Where a man earns more than his female partner, they may well feel that 'Daddy day care' is a luxury the family cannot afford. Would that decision be easier if the employer paid a higher rate of pay on leave?

Employers are not required to top up statutory rates of pay, although some choose to do so and can attach repayment clauses if the employee does not return for a set period of time after the end of their leave. Although many of those that do offer extra pay do so to employees on all types of family leave, it has been unclear whether this is necessary.

There has been inconsistency between two conflicting employment tribunal decisions on enhanced shared parental pay. In Ali v Capita Customer Management Limited, a tribunal held that it was sex discrimination not to pay a male employee the equivalent 14 weeks' full pay during a period of shared parental leave received by a woman on maternity leave. On the other hand, in Hextall v Chief Constable of Leicestershire Police a different tribunal took the opposite view and held that paying a period of full pay to mothers on maternity leave, but only statutory pay to partners on shared parental leave was not discriminatory.

EAT holds that it is not sex discrimination to enhance maternity but not shared parental pay

The EAT has now held that the Ali case was wrongly decided. The tribunal had adopted the wrong comparator but in any case, should have found that the more favourable treatment given to women on maternity leave was "in connection with pregnancy or childbirth". Section 13(6)(b) of the Equality Act 2019 provides that special treatment for this reason does not give rise to direct sex discrimination against men.

In Ali, the company paid female employees on maternity leave 14 weeks' basic pay, followed by 25 weeks' statutory maternity pay. Male employees were entitled to two weeks' paternity leave and were eligible for shared parental leave at statutory rates of pay.

The Claimant took two weeks' paternity leave when his daughter was born, and brought an unsuccessful grievance complaining that he should receive the same pay on shared parental leave as a woman on maternity leave before bringing a claim for direct sex discrimination,

The tribunal had accepted the Claimant could compare himself to a hypothetical female employee taking leave to care for her child after two weeks of compulsory maternity leave. In the tribunal's view, it was irrelevant that the Claimant had not given birth, since he was not comparing himself with a woman who had given birth but with a a woman taking leave to care for her child. The tribunal could see no reason why the preferential treatment for women in s13(6)(b) should extend beyond the compulsory maternity leave period. On the facts of the case, the role of caring parent was not a role exclusive to the mother, and therefore it was not special treatment in connection with pregnancy and childbirth.

The EAT allowed the employer's appeal. In holding that the exemption at section 13(6)(b) did not apply, the tribunal had depended on its finding that the purpose of maternity leave is to care for the child. However, both domestic and European legislation draws a clear distinction between the rights of pregnant and breastfeeding workers (biological women) and the rights of parents of either sex to take leave to care for their child.

Maternity leave is for the health and wellbeing of the mother, although she will "no doubt take care of her baby", and under EU law at least 14 weeks must be paid; parental leave is for the care of the child, and EU law sets no requirements for pay.

The correct comparator was not a woman on maternity leave, but a woman taking shared parental leave. She would have received statutory shared parental pay on the same basis as the Claimant, and therefore there was no sex discrimination.

The campaign group Working Families intervened in the appeal, and suggested that after 26 weeks, the purpose of maternity leave may change from recovery from birth. The EAT noted that may the case, and that a claim based on the comparison between a father on shared parental leave and a mother taking additional maternity leave (after 26 weeks on ordinary maternity leave) might succeed.

The Hextall case was heard separately by the EAT in January 2018, and the judgment is awaited.

For now though, it would appear that employers may, if they choose to do so, pay enhanced rates of pay only to women on maternity leave and not to employees of either sex on shared parental leave (or of course on adoption leave). To do so sends a message to employees and the wider world, particularly for those concerned about gender inequality in the workplace.

Cultural barriers and the gender pay gap

The Prime Minister of New Zealand and her partner are the latest high-profile example of successful woman whose partner will care for the child. Men do sometimes report a reluctance to take parental leave, with cultural barriers to doing so and fear of being seen as unambitious or unreliable at work if they do (we hear you! – Women, everywhere.)

Cultural barriers are thought to play a part in the low take up of parental leave.

All UK organisations employing more than 250 employees were required to publish a gender pay gap report by no later than April 2018, and thereafter to do so annually. The results after the first year of operation showed three quarters of large UK businesses on average paid men more than women, with the average median difference being 9.7% in favour of men.

The data shows that men are more likely to make it into highly paid roles – the average company is 52% male, but the highest paid 25% of its employees are 63% male. As the Financial Times has noted, on the whole as the percentage of women at a company increases, so does the percentage of them who rank amongst its highest-paid employees.

Of course personal choice plays a part in these figures, but solving the gender pay gap means addressing the root causes of why women are employed in the highest paid jobs, and removing the obstacles that prevent women from advancing their careers, including the so-called 'motherhood penalty'. Data from the Resolution Foundation shows that the age at women's pay starts to fall behind men's tracks the age at which they typically have their first child.

In a couple where the man earns more, it is not surprising that the lower-paid female partner takes leave, or even takes a career break, to care for children. Many firms identified in the narratives which accompanied their gender pay gap information, that women were more likely to be employed in lower paid roles which were more likely to be flexible part-time opportunities.

When couples are able to choose who will take time off to care for their children, it is less likely that women's career progression will be impacted – either by perception (because men are equally likely to take time off) or because they are able to take time off and return without damaging their future prospects at work.

The future

As the tribunal in Ali observed, men are being encouraged to take a greater role in caring for their babies. The principle behind shared parental leave is that parents should be free to choose which parent should take on the greater burden of caring responsibility. There should not be an assumption that the mother is best placed to do so.

In March 2018, the House of Commons Women and Equalities Committee published a report, Fathers and the Workplace, setting out proposals for legislation to ensure workplace policies better support working parents.

The recommendations in the report include:

• the introduction of 12 weeks’ paid paternity leave, to be taken in the first year of the child's life, as an alternative to shared parental leave
• statutory paternity pay should be set at 90% of fathers’ pay for the first four weeks (with a maximum cap for higher earners) and the remaining eight weeks to be paid at statutory levels
• that the government considers whether the current entitlement for fathers to attend two antenatal appointments is sufficiently supportive for parents of multiple babies or where other factors could mean additional appointments are required
• the harmonisation of workplace rights for fathers who are agency workers or self-employed with employed fathers where practical, for example by introducing a paternity allowance similar to the maternity allowance available to self-employed mothers or those who do not otherwise qualify for maternity pay
• all jobs should be advertised as flexible, unless there are business reasons not to.

Replacing shared parental leave with a period of paternity leave on a "use it or lose it" basis was shown in Germany to increase take up rates from around 3% to 33%.

The government is due to review the current shared parental leave scheme this year in any case. It is not yet known how the government will respond to the proposals but what does seem clear is that, while publicising the existing scheme is a start… alone, it's not enough to make a real difference to families.

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