In the fourth part of our series on contract management pitfalls, we look at the risks arising out of varying the terms of construction contracts.
The Employment Appeal Tribunal has, for the first time, ruled on the issue of enhanced shared parental pay for fathers. It confirmed that failure to pay a male employee enhanced shared parental pay, in circumstances where an employer does pay enhanced pay to women on maternity leave, is not direct sex discrimination.
Direct sex discrimination occurs where, because of sex, a person treats another less favourably than they treat or would treat those of the opposite sex.
In determining whether a man has been discriminated against because of sex, the law confirms that no account is to be taken of the special treatment afforded to women in conjunction with pregnancy or childbirth. Therefore, a man cannot claim that he has suffered discrimination because he has not been accorded the same special treatment.
Since April 2015, shared parental leave (SPL) of up to 50 weeks and shared parental pay of up to 37 weeks have been available for eligible parents, and many employers have been uncertain as to how their existing maternity and paternity rules are to be applied where SPL is taken. The pay for SPL and statutory maternity pay are the same. At the time of the introduction of SPL, there was considerable debate about whether employers with enhanced maternity packages should match those benefits for anyone taking SPL, and whether not to do so would be sex discrimination against men. The legislation did not provide for any such obligation, and it seemed that the Government took the view that there was no need for employers to match the benefits. This question did not go away and was given consideration in two tribunal cases that have now, finally, both made their way to the EAT (with the second case still undetermined – Hextall v Chief Constable of Leicestershire Police).
Mr Ali was employed by Capita Customer Management Ltd (Capita) and was entitled to two weeks’ ordinary paternity leave on full pay. Mr Ali took two weeks’ leave immediately upon the birth of his daughter and then sought to take further leave to look after his daughter after his wife was diagnosed with postnatal depression and advised to return to work.
Capita provided 14 weeks’ maternity leave on full pay for female employees. However, Mr Ali was advised that if he took SPL, he would be paid statutory pay only. In response, Mr Ali brought a claim for sex discrimination on the basis that he should receive the same entitlement as a female employee taking maternity leave.
Mr Ali was successful with this claim at the employment tribunal stage. The tribunal held that the caring role that Mr Ali wanted to perform was not a role exclusive to the mother and therefore there was no reason for women to have preferential treatment in respect of leave beyond the two-week compulsory maternity-leave period.
Capita appealed the above decision of the tribunal and were successful. The EAT considered the difference in purpose between the rights given to pregnant workers and those who have to give birth (who by reason of biology are women) and the rights given to parents of either sex to take leave to care for their child.
The EAT pointed out that the legislation providing SPL makes no provision for pay, in comparison to the Pregnant Workers Directive, which requires a minimum of 14 weeks’ maternity leave paid at least at the same level as statutory sick pay. The EAT found that the purpose of maternity leave is for the health and well-being of the mother, whereas the purpose of SPL is the care of the child.
Therefore, it was incorrect to compare Mr Ali with a woman on maternity leave who received enhanced pay. In the EAT’s view, the correct comparator was a woman on SPL, who would have been given the same pay as Mr Ali received.
Many employers are considering whether they enhance the terms of shared parental leave in a bid to encourage more men to take a greater role in caring for new children. However, there is no legal requirement to do so. If employers do not decide to enhance shared parental pay, they can do so knowing that there is EAT authority confirming that it would not constitute direct sex discrimination.
Employers need to be aware that the EAT decision in the other case of Hextall v Chief Constable of Leicestershire Police, is still unknown and therefore there is a risk that a conflicting judgment could be made, complicating matters further. The decision in Hextall is expected in the next few months. The two cases had diverging conclusions at tribunal level, but we anticipate and hope that the judgment will provide further clarity for employers and confirm the conclusion reached in Mr Ali v Capita Customer Management Ltd. For the time being, we are of the view that employers do not have to enhance shared parental pay to match any enhanced maternity pay.
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