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Is it Discriminatory to Pay a Different Enhancement for Maternity Leave v Shared Parental Leave?

Employers often introduce company maternity pay, which offers employees an enhancement on top of statutory maternity pay, usually if the employee meets certain criteria decided by the company.

However, Employers are often concerned that if they offer increased maternity pay then they will also have to offer the same enhancement for shared parental leave (‘SPL’), as they may believe a failure to do so could be discriminatory.

Employers may be relieved to know they can in fact lawfully pay different enhanced rates for maternity leave for their female employees, but only offer statutory SPL or a lesser rate of enhancement. It is not discriminatory for Employers to offer two different rates and we explain why below.

The leading case law on the matter are the cases of Ali v Capita Customer Management Ltd and Hextall v Chief Constable of Leicestershire Police (2019) in which the main argument was whether two men taking SPL should be entitled to the same benefits as women taking maternity leave. Mr Ali claimed that he had suffered direct sex discrimination on the basis that women within the company were entitled to enhanced maternity leave pay, whilst he would only be entitled to statutory SPL pay. Mr Hextall, claimed that he had also suffered indirect sex discrimination, as women had the choice of maternity leave and SPL, and he was therefore at a disadvantage to his female counterparts.  The Court concluded that men taking SPL could not compare themselves to a women taking maternity leave, as their circumstances were materially different. It was not direct or indirect discrimination, nor a breach of the equal pay sex equality clause, for an employer to pay a man taking SPL less than a women on maternity leave. The Court of Appeal stated that maternity leave fulfils a different purpose to that of SPL. The primary purpose of maternity leave is the health and wellbeing of the pregnancy and birth month and did not agree that the purpose of maternity leave was to facilitate childcare.

The take up of SPL remains very low, and the Government estimates that only 2-8% of those eligible actually use the scheme, with many charities petitioning for a reform of the scheme.  In addition, parents who take up SPL are more likely to be older, of white ethnicity, highly qualified, work in large organisations, earn a higher income, and have progressive gender role attitudes, compared to parents who do not take SPL.

Employers may wish to consider offering enhance SPL pay, to encourage take up across its workforce. Some Employers are equalising their parental pay to assist parents in being able to share parental duties more equally, as women usually take on the majority of the responsibility for their newborn.

Employers looking to introduce enhanced pay for parental leave may wish to consider the following points when preparing their business case:

  1. Eligibility criteria. For example, what length of service employees require to become eligible for the payments;
  2. How much will they receive and for how long do you wish to pay enhanced payments. You could consider tapering this over the course of the maternity leave; and
  3. You may also wish to consider any repayment obligations, for example for those employees who fail to return to work after leave or leave work shortly after their return to work. For example, if the employee leaves within 6 months the sums will be repayable

If you require any assistance in relation to any issues addressed above, please do not hesitate to contact the employment team for further help.

Disclaimer: this post has been produced for our website/app blog and does not constitute legal advice.