Male employees don't have to be paid enhanced shared parental pay equivalent to enhanced maternity pay

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

Why care?

These two cases, heard together at the Court of Appeal, asked whether employers must pay the same to men on shared parental leave as to women on maternity leave.

Direct sex discrimination occurs where, because of sex, a person (A) treats another (B) less favourably than A treats or would treat others (section 13(1), Equality Act 2010). Indirect sex discrimination takes place where a person (A) applies a provision, criterion or practice (PCP) generally to both men and women, but it puts or would put B, and others of the same sex as B, at a particular disadvantage compared to those who are of the opposite sex, and the reason for the PCP cannot be objectively justified (section 19, Equality Act 2010).

In determining whether a man has been discriminated against because of sex, no account is taken of special treatment afforded to women in connection with pregnancy or childbirth (section 13(6)(b), Equality Act 2010). Therefore a man cannot claim that he has suffered sex discrimination because he has not been accorded the same special treatment. However, pregnant employees and those on maternity leave should only be treated more favourably than others to the extent that this is reasonably necessary to remove the disadvantages they face because of their condition.

S66 of the Equality Act implies a sex equality clause into all contracts of employment. However, a man cannot claim based upon the more favourable terms given to a woman as a result of pregnancy or childbirth (paragraph 2, schedule 7, Equality Act).

The cases

Both Mr Ali and Mr Hextall were fathers who took a period of shared parental leave and were paid statutory shared parental pay. Both of their employers had a policy of enhancing maternity pay above statutory rates, but not shared parental pay.

The employment tribunal held that Mr Ali had been the victim of direct sex discrimination, but the EAT disagreed, saying that both UK and European law draws a clear distinction between the rights of pregnant workers, new mothers and those who are breastfeeding, and other employees of either sex who wish to take leave to care for their child. The more favourable treatment given to women on maternity leave was "in connection with pregnancy or childbirth" which, under s13(6)(b) of the Equality Act, is an exemption from direct sex discrimination. A woman on shared parental leave would have been treated in the same way as Mr Ali.

Mr Hextall's claims for direct and indirect sex discrimination were both dismissed by a different employment tribunal. He appealed only the finding that it was not indirect sex discrimination. The EAT found that the tribunal had made a number of errors in its decision. The correct pool of comparators was colleagues of both sexes who had a present or future interest in taking leave to care for their children, but the tribunal had not identified the precise disadvantage to which men were put and women were not in those circumstances. His employer clearly did apply a neutral rule, paying only statutory pay to those on shared parental leave regardless of sex. That must be the case in an indirect discrimination case (or it would be direct discrimination). Just because the rule is applied to everyone, does not mean it cannot be indirect discrimination, said the EAT, and remitted the case to a fresh tribunal.

The Court of Appeal decision

The two appeals were heard together. The Court of Appeal (the Master of the Rolls, Bean LJ and Rose LJ) dismissed the two claimants' appeals, and allowed the Police's cross appeal that the EAT had incorrectly characterised the claim as being indirect discrimination, instead of a breach of his terms of employment as modified by a sex equality clause.

Ali v Capita Customer Management Ltd

The correct comparator in Mr Ali's case was a female worker on shared parental leave. That comparator would be treated in the same way as a man on shared parental leave like Mr Ali, and so there was no direct sex discrimination.

Statutory maternity leave is not intended to facilitate childcare, but to allow a woman to prepare for and cope with the later stages of pregnancy, to recuperate from pregnancy and childbirth, to develop the special relationship between mother and baby, to breastfeed and to care for the newborn baby.

The EU's Pregnant Workers Directive says that a minimum of 14 weeks maternity leave is given for the safety and health of those who are pregnant, have recently given birth or are breastfeeding. Section (13(6)(b) of the Equality Act exists in order to preserve and promote in the UK this EU-required protection.

The Court could not see any grounds on which to confer on UK shared parental leave legislation the intention or effect of making the facilitation of childcare the predominant purpose of maternity leave after a period of compulsory leave to recover from birth. There are important differences between the two: maternity leave is partly compulsory, can begin before birth, and is an entitlement even where there is no child to look after. Shared parental leave, on the other hand, is entirely optional, only available after birth and a period of compulsory maternity leave, and there must be a child for whom the parent is caring. Unlike shared parental leave, maternity leave is not just about childcare, but other matters which are exclusive to the birth mother.

Chief Constable of Leicestershire Police v Hextall

Mr Hextall's claim was neither direct nor indirect discrimination, said the Court of Appeal, but an equal terms claim, because:

• his comparator had more favourable terms to take time off to care for her baby
• these should be included in his own contract by the implied sex equality clause
• he relied on the that term to claim he had suffered a reduction in pay when he was absent from work to care for the baby.

However, had the tribunal and EAT properly characterised it as an equal terms claim, then the exclusion for special treatment in connection with pregnancy or childbirth applied, so his claim could not succeed.

Mr Hextall could not bring an indirect sex discrimination claim because a less favourable term cannot be sex discrimination where it was inserted because of the sex equality clause.

The Court went on to find that even if that was not the case, he could not have won his indirect sex discrimination claim because it was not the PCP of paying only statutory shared parental pay which caused a particular disadvantage to men rather than women, but that only birth mothers are entitled to statutory and contractual maternity pay. Women on maternity leave are in a different position from that of men and women on shared parental leave (see reasons in Ali above) and therefore should be excluded from the pool of comparators. What was left was men and women taking shared parental leave who were treated in the same way, and so Mr Hextall was at no particular disadvantage and there was no need to objectively justify anything.

But, said the Court, even if the above was not the case, and Mr Hextall had been at a particular disadvantage, it would still not have been indirect discrimination, because it was a proportionate means of achieving a legitimate aim (the special treatment of birth mothers in connection with pregnancy or childbirth).

What to take away

It is not direct discrimination to pay men on shared parental leave less than women on maternity leave, and neither is it indirect discrimination. It is a technically a breach of the sex equality clause implied into all contracts of employment, but the exception for special treatment for pregnant workers, new mothers and those who are breastfeeding applies.

Employers will be relieved to have clarity. They are free, if they wish, to continue to enhance maternity pay but not shared parental pay provided this applies to both men and women.

Both fathers have lost all aspects of their claims – but are reported to be seeking leave to appeal. Working Families, the campaigning organisation which intervened in the case, has called for a standalone period of extended paternity leave for fathers.

Whether employers wish to operate an unequal scheme is worth considering. Smaller employers may not be able to pay either parent in any case. Larger ones may consider that the reputation of being family friendly is worth the added expense (especially given the still small take up of shared parental leave at present).

As the recent ECJ RE v Praxair case shows, encouraging both parents to take parental leave is not a solely-UK problem. In that case, it was noted that 96% of those French employees who took a part-time parental leave for childcare reasons (an option available under French law but not in the UK) were women. The ECJ held that a female employee who had taken a period of part-time parental leave in order to care for her child was entitled to be paid a termination payment and for her redeployment leave based on her full-time salary, without any deduction for the period she spent working part-time. The ECJ held that the EU framework on parental leave is intended to give both men and women the opportunity to reconcile their work and family lives, and national legislation which reduced rights when employees took parental leave could discourage them from taking leave, contrary to the objectives of the framework agreement.

In April 2019, the European Parliament adopted its first reading of a Commission proposal for a new directive on work-life balance for parents and carers. The new directive will have two objectives:

• to recognise that the main cause of the gender pay gap is the unbalanced design of leave between men and women
• to increase the take-up of family related leave and flexible working arrangements by men.

This is an issue that is not going away soon (Brexit dependent, of course) and so while Ali and Hextall may preserve the UK status quo for now, the Court of Appeal is unlikely to have had the last word.