The forthcoming introduction of shared parental leave in April 2015 has raised many questions for employers. The recent Employment Tribunal decision in Shuter v Ford Motor Company raises perhaps more questions concerning the level of pay offered where employees exercise a right to paternity leave. The case, the first of its type to be heard before a Tribunal, concerned the employee’s pay entitlement during additional paternity leave (“APL”) and whether it was discriminatory to pay less than that which a mother would receive during her maternity leave.
Where an employee satisfies eligibility criteria, they are entitled to take APL for up to 26 weeks where the mother of the child has returned to work after her own period of maternity leave. Ford had a policy that female employees would receive full basic pay for up to 52 weeks of maternity leave. Employees taking APL would receive no such enhancement and were only entitled to statutory paternity pay. Mr Shuter had taken 20 weeks of APL and claimed that, as a result of this policy, he was £18,000 worse off than he would be if he had the same entitlement to enhanced pay as a female employee on maternity leave.
Mr Shuter brought claims before the employment tribunal for both direct and indirect discrimination on the basis it was discriminatory to only pay him the statutory rate when a woman who had taken the same amount of maternity leave would have received full pay.
Statutory Maternity Pay and Leave
The Employment Tribunal held that this difference was not directly discriminatory as a female employee who took additional paternity leave, such as a female civil partner of the mother, would also have received the statutory rate of pay. A female employee on maternity leave was not the correct comparator.
Mr Shuter also argued that a man on additional paternity leave and a woman on additional maternity leave were not materially different because the leave was for childcare, which could be done by either parent, rather than for the health and safety of the mother following pregnancy and childbirth. The Tribunal rejected this argument and held that the right to additional paternity leave was dependent on the mother returning to work: the timing of which was her choice based on her own circumstances. The Tribunal believed the legislation was not intended to separate periods of leave as having different functions. It was also noted that government guidance indicated enhanced maternity schemes did not have to be mirrored for paternity schemes.
Ford acknowledged that the practice of giving full pay to women meant male employees could be found to suffer a group disadvantage for the purposes of indirect discrimination. The Equality Act provides a potential defence to an employer to a claim of indirect discrimination if it can objectively justify an apparently discriminatory provision, criteria or practice (“PCP”), such as Ford’s enhanced maternity pay policy, by showing it is a proportionate means of achieving a legitimate aim. Ford maintained the reason for the policy was to recruit and retain female employees in a male dominated workforce. Evidence was produced showing the consultation which had taken place in introducing the policy and that the number of female employees had increased, including in senior management roles, against the background of a reducing workforce. The Tribunal held that this was a legitimate aim and that the practice of giving full pay on maternity leave was proportionate in seeking to recruit more women.
Mr Shuter was therefore unsuccessful in his claim on the grounds of both direct and indirect discrimination.
This decision was made by an Employment Tribunal at first instance and is not binding on other Tribunals, but it raises some interesting points.
Firstly, while this decision indicates that it is justifiable for employers to have differing schemes for maternity and paternity pay, it also illustrates that it is important to be clear of the basis for such policies. The decision in this particular case was based on the fact that evidence existed showing the enhanced maternity policy had been successful in achieving the company’s aim of recruiting and retaining women. This evidence dated back to 1999. If the policy had been in place for so many years and had made little or no difference to the number of female employees, the tribunal may have held that the policy was not achieving any aim and was therefore not justified.
Equal Pay in the UK
Therefore, employers who have similar differentials in maternity and paternity pay may have to consider the aims of their policies, bearing in mind that the saving of money alone is not generally considered justifiable. An employer with a more balanced or female dominated workforce than Ford may find it more difficult to justify offering enhanced pay to women and not men. It may also be worth considering whether there is evidence to support the proportionality for the policy should any questions arise.
Secondly, it may be questioned whether the decision will have any implications regarding shared parental leave. Its introduction will abolish additional paternity leave as all but the first two weeks of maternity leave will be able to be shared between both parents. Consideration will have to be given by employers as to whether they will offer enhanced pay schemes for shared parental leave.
It is less likely that discrimination will occur where pay enhancements for shared parental leave are less than enhanced maternity pay provisions as both male and female employees can take shared leave and would have the same entitlement. The taking of shared parental leave depends on the mother choosing to curtail her right to maternity leave: the same position as for additional paternity leave and one of the reasons the Tribunal believed having different policies was not directly discriminatory.
If it becomes apparent that the majority of employees taking shared parental leave are male then it might be possible to establish group disadvantage as in the Shuter case, and employers would therefore have to justify any pay difference. It is not clear that such claims will be common, but given that not every employer will be able to produce the level of evidence available to Ford, it may be worth giving consideration to such policies at an early stage.
Contact Miller Samuel Employment Solicitors
If any of the above raises any issues for you or your business, we would be happy to assist. Get in touch with one of our employment solicitors today on 0141 530 9267.
