Shared Parental Leave is not comparable to adoption leave for purpose of sex discrimination claim


20th May 2021

Six years ago, shared parental leave was introduced by the coalition Government and hailed by Nick Clegg as an opportunity to "allow men to become more hands-on fathers and stop women feeling they have to choose between a career or a baby".

However, with Maternity Action estimating that take-up by men was between 3% - 4% and with calls from the Trades Union Congress (TUC) to scrap the policy as it was "deeply flawed", could the Employment Appeal Tribunal ("EAT") offer new hope to fathers when comparing a man on shared parental leave to a woman on adoption leave?

In the recent case of Price v Powys County Council, the EAT upheld the Employment Tribunal's decision that there is no direct sex discrimination where an employer pays male employees on shared parental leave less than it pays female employees on adoption leave.

In dismissing the appeal, the EAT followed the Court of Appeal’s reasoning in the high-profile case Ali v Capita Customer Management Ltd. In Ali, there was a “material difference” between the male Claimant on shared parental leave who received no enhancement of pay and his chosen comparator, a female employee on maternity leave who received enhanced maternity pay. In Price, the Employment Tribunal held that whilst there were more similarities between the Claimant and his comparator (that being a female on adoption leave), their respective positions were also not materially the same and therefore the Claimant could not rely upon the female on adoption leave as an appropriate comparator (thus her rate of pay).

The decision in Price will provide comfort to employers that do not offer shared parental leave pay at an enhanced rate as the EAT has made clear that the decision to pay females at an increased rate of pay on adoption leave compared to the normal statutory rate of pay does not amount to direct discrimination on the basis of sex. That said, practically speaking, take-up of shared parental leave is likely to remain low where there is a difference in pay.

Equality Act 2010

The Equality Act 2010 prohibits direct discrimination on the basis of sex. Under section 13 of the Act, direct sex discrimination occurs where, because of sex, a person (A) treats another person (B) less favourably than A treats or would treat others.

An employee claiming direct sex discrimination will need to show that they have been treated less favourably than a real or hypothetical comparator, in accordance with section 23 of the Act.

Facts

Mr Price, was employed by Powys County Council. Mr Price’s wife became pregnant and they decided that he would care for the child so that his wife could return to work after her two weeks’ compulsory maternity leave. Mr Price made enquiries about his entitlement under the Council’s Supporting Working Parents Policy. He was told that he would receive shared parental pay at the statutory rate. By comparison, the Council’s policy was that employees taking maternity or adoption leave were entitled to enhanced pay above the statutory rate.

Mr Price did not proceed with his application. He argued that it was direct sex discrimination for the Council to pay female employees on maternity or adoption leave more than male employees on shared parental leave and brought a claim before the Employment Tribunal.

The claim was heard in September 2019. Mr Price identified two comparators:

  1. A female employee on maternity leave receiving enhanced maternity pay; and
  2. A female employee on adoption leave receiving enhanced adoption pay.

Dealing with each in turn, the Employment Tribunal considered whether the chosen comparators were in materially different circumstances to Mr Price.

With regard to the first comparator, the female worker in receipt of enhanced maternity pay, the Employment Tribunal found that the current position was very clear. In Ali, the Court of Appeal confirmed that maternity leave fulfils a range of different purposes to shared parental leave, for example, to allow mothers to recuperate from the effects of childbirth and to develop the special relationship between the mother and new-born child. By comparison, the predominant purpose of shared parental leave is the facilitation of childcare. The first comparator was therefore in circumstances that were not materially the same as Mr Price.

The second comparator was not specifically referred to in Ali. Mr Price argued that a female worker in receipt of adoption pay was an appropriate comparator as they did not have to undergo childbirth and their role was on par with a worker on shared parental leave. The Employment Tribunal found a material difference between the two, citing the following reasons:

  • Statutory adoption leave was in part compulsory, whereas shared parental leave was entirely optional;
  • Statutory adoption leave could begin before placement, whereas shared parental leave could not commence until the birth of the child;
  • Shared parental leave could only be taken with the partner’s agreement to give up statutory adoption leave; and
  • Shared parental leave had to be taken within 52 weeks’ of placement and within the period could be “dipped in and out.”

Whereas the similarities were more marked between Mr Price and his second comparator, both arguments were dismissed.

The Employment Tribunal held that the correct comparator for Mr Price was a female employee on shared parental leave and since the correct comparator would have received the same pay under the Council’s policy, the direct discrimination claim failed.

Mr Price accepted the Employment Tribunal’s decision relating to maternity leave and maternity pay, but appealed against its rejection of the second comparator, the female employee receiving adoption pay.

Appeal

On appeal, Mr Price argued that the underlying purpose of statutory adoption leave and shared parental leave was the same; the facilitation of childcare. Therefore, a female employee on adoption leave was an appropriate comparator.

The EAT agreed with the Employment Tribunal that there were significant material differences between the two types of leave (as set out in the bullet points) and that the core purpose of statutory adoption leave was not just the facilitation of childcare. The two were not comparable and the Employment Tribunal had been correct to find that the comparator, for discrimination purposes, was a female on shared parental leave.

As such, the requirement in section 23 of the Equality Act 2010, that there must be no material difference in circumstances between the Claimant and his comparator, was not met as a female on shared parental leave was entitled to the same sums as Mr Price.

The claim for direct discrimination failed and the appeal was dismissed.

Comment

In finding a material difference between the two types of leave, the decision of the EAT in Price v Powys County Council will provide comfort to employers that offer enhanced pay for employees on adoption leave (and/or maternity leave) but offer only the statutory rate for shared parental leave.

Such policies are not discriminatory on the basis of sex and there is no legal obligation on employers to amend their policies. However, the problem remains that many men are unable to take shared parental leave due to the current statutory rates of pay (£151.97 a week) and the knock-on effect with their families and the careers of their partners (as evidenced through the gender pay gap).

This is a significant hurdle and one which is affecting society hugely. Employers are increasingly recognising this and many have opted to equalise the benefits available to male and female employees by offering enhanced shared parental pay of their own volition.

The Government’s review of the shared parental leave scheme which was due in 2019 is not expected to be published until later this year. This may well provide a way forward for fathers when facing the cost of taking shared parental leave, as challenges within the legal system have failed to date, but until such time as this impasse is addressed and fathers are offered a viable option for childcare and their families – the current problems will remain.

This article has been co-written by Paul Hayward and Milly Dent.

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