Failure to pay enhanced shared parental pay not discriminatory (Court of Appeal)

In Ali v Capita Customer Management limited; Hextall v Chief Constable of Leicestershire Police [2019] EWCA Civ 900 the Court of Appeal considered whether it was direct or indirect discrimination or a breach of the equal pay sex equality clause for two employers to fail to pay two make employees enhanced shared parental pay of an amount equivalent to enhanced maternity pay available to female employees.

The Court of Appeal (CA) held that such a practice is neither directly nor indirectly discriminatory on the grounds of sex and it is not a breach of the equal pay sex equality clause.

Background

In the first case, Mr Ali was entitled to two weeks SPL at full pay and a further 26 weeks at the statutory rate, while his female colleagues were entitled to 14 weeks of full pay and an additional 25 weeks of SMP. The Employment Tribunal (ET) held that this was direct sex discrimination. Upholding Capita’s appeal, the Employment Appeal Tribunal (EAT) held that there was no direct discrimination because the purpose of maternity leave and SPL are fundamentally different. The former, established under the Pregnant Workers Directive (92/85/EC), concerns the health and well-being of the new or expecting mother. The latter is a measure related to childcare. Therefore, someone taking SPL was not in a comparable situation to a woman taking maternity leave. In any event, the Equality Act 2010 allows for women to be given more favourable treatment during maternity leave, which is therefore not unlawful.

In the second case, Mr Hextall was entitled to 14 weeks of SPL at the statutory rate, whereas Leicestershire Police provided 18 weeks of maternity leave at full pay. The ET dismissed Mr Hextall’s claims of both direct and indirect discrimination. On appeal the EAT held that there had been a number of errors concerning the claim of indirect discrimination including that the provision criterion or practice of only paying statutory pay for those on SPL did not put men at a disadvantage on the basis that both men and women taking SPL were entitled to the same amount, saying that this was the essence of an indirect discrimination claim (i.e. that the rule applies equally to both men and women).

Appeal

Both Mr Ali and Mr Hextall appealed to CA. Leicestershire Police cross appealed on the EAT’s characterisation of Mr Hextall’s claim as an indirect discrimination claim.

The CA dismissed both Mr Ali and Mr Hextall’s appeals and allowed the appeal of the Leicestershire Police, ruling that there had been neither sex discrimination nor a breach of equal pay rights in either of the two cases.

The CA agreed with the decision of the EAT that the correct comparator for Mr Ali was not a woman taking maternity leave but rather a woman taking SPL as the purpose of maternity leave and shared parental leave are different. Maternity leave relates to more than just child care, encompassing the protection of the mother during the later stages of pregnancy, recuperation from pregnancy and birth, developing the special relationship between mother and newborn child and to facilitate breastfeeding and care for the newborn child. This could not be compared to SPL which is optional, can only be taken by the mother agreeing to give up maternity leave and was predominately concerned with childcare arrangements. Therefore, Mr Ali’s appeal was not upheld.

In relation to Mr Hextall’s appeal, the CA ruled that this was an equal pay claim, relating to contractual terms concerning pregnancy, which were not available to him because he is not a woman. Nevertheless, because the Equality Act allows more favourable terms for women during maternity leave, Mr Hextall’s equal pay claim failed as well. In deciding that Mr Hextall’s case amounted to an equal pay claim, the CA ruled that it could not be an indirect discrimination claim as the two are mutually exclusive. In any event, the CA said that Mr Hextall’s comparator could not be a woman on maternity leave but a woman on SPL who was receiving more than the statutory rate. Furthermore, indirect discrimination in this manner could also be justified as it amounts to special protection for new or expecting mothers, even though this exemption is missing from the indirect discrimination provisions of the Equality Act, which the CA regarded as an error of Parliament, noting that the exemption is provided for under EU law and previous national legislation.

Comment

These cases will undoubtedly be welcomed by employers in that the CA has ruled that it is not sex discrimination to pay enhanced maternity pay while paying the statutory rate for SPL.