Is SShPP discriminatory?
25 June 2018
This article was featured in the July - August 2018 issue of the magazine.
Danny Done, managing director at Portfolio Payroll, discusses the implications of recent judgments and highlights the growing uneasiness surrounding SShPP
Having first been introduced in April 2015, statutory shared parental leave (SShPL) and the accompanying statutory shared parental pay (SShPP) were intended to increase the flexibility with which working parents can manage taking time off after they have children. However, over recent months two notably similar disputes involving SShPL have reached the Employment Appeal Tribunal (EAT), an issue which is only likely to grow in significance in light of the government’s current aim to increase awareness of this statutory entitlement amongst those who are eligible to take it.
In the case of Capita Customer Management V Ali, the EAT overturned the decision of the initial Employment Tribunal (ET). The ET had previously ruled Capita’s practice of paying male employees the statutory amount of SShPP and female employees an enhanced rate of maternity pay was tantamount to sex discrimination.
On appeal the EAT examined the test for discrimination and ruled the ET had mistakenly found that the correct comparator for a father on SShPL was a mother on maternity leave. It was ruled that Mr Ali could not reasonably compare himself to a mother on maternity leave given the special protection afforded to women during this period. The EAT added that maternity leave and pay is designed to safeguard the health of the mother and the child following the birth, whilst SShPL and SShPP are purely to care for the child. The appeal was upheld, and the finding of sex discrimination was overturned.
The case of Hextall vs CC of Leicestershire Police again involved a male employee claiming that his employer had discriminated against him because of his sex by offering female staff enhanced rates of maternity pay but only the statutory rate of SShPP. However, Hextall’s initial claims of direct and indirect discrimination were dismissed by the ET, which stated the claimant could not compare himself to a woman on maternity leave due to the obvious material differences between the two. In dismissing the claim of indirect discrimination, the ET decided the correct comparator would be a female same sex partner who chose to take SShPL and in this instance the statutory rate of SShPP applied to both men and women equally.
The employee appealed the finding on indirect sex discrimination. The EAT ruled that the ET had wrongly applied the test of indirect discrimination when it found that, as both male and female employees were treated in the same way, there was no discrimination involved. Indirect discrimination will always involve equal treatment, but the test is in deciding whether one sex, in this case, is disproportionately affected over the other.
...in the near-future this may become a key battleground for employee disputes
The EAT identified the disadvantage as the lack of choice for male employees in their choice of paid leave; female employees have that choice. The correct procedure would have been to use a pool of individuals to test the disparate impact of the rate of SShPP on men and women in materially indistinguishable circumstances. The EAT overturned the initial decision on this basis but did not have sufficient evidence to determine the size and make-up of the pool; the case was remitted to the employment tribunal for further consideration.
Whilst these cases have different outcomes they highlight a growing uneasiness surrounding the topic of SShPP, suggesting that in the near-future this may become a key battleground for employee disputes.
Whilst we know now from the Ali case that a practice of paying male employees SShPP whilst female employees receive enhanced maternity pay is not direct discrimination, there is a possibility that it is indirect discrimination to which a different test is applied. Employers should remember that indirect discrimination can be objectively justified meaning that, given an employer uses the practice as a proportionate means of achieving a legitimate aim, it may continue with the disparate treatment.
It would be advisable, therefore, for employers whose pay practices match those discussed above to consider the reason for adopting the practices, such as to aid recruitment and retention of women. It is likely that employers will need to demonstrate the identification of the problem they faced for which the unequal payment was the resolution.
Where the practice cannot be objectively justified, employers could consider increasing rates of SShPP to match enhanced rates of maternity pay. This would help guard against discrimination claims and increase gender equality by making SShPL a more attractive option. On the other hand, paying only statutory pay during both maternity leave and SShPL offers a more cost-effective method of equal treatment.