Last summer the Court of Appeal ruled that an employer’s failure to enhance shared parental pay in the same way as enhanced maternity pay was not unlawful direct or indirect sex discrimination or unequal pay (see here). The Court considered that a woman on maternity leave was not in comparable circumstances to someone on shared parental leave, as the purpose of maternity leave was to provide special protection for the health and wellbeing of mothers in connection with pregnancy, childbirth and breastfeeding, whereas the purpose of shared parental leave is to facilitate childcare.
The Supreme Court has now refused permission to appeal the case, leaving the Court of Appeal’s judgment as the definitive position for the time being. Employers who choose only to enhance maternity pay will welcome this decision. However, the case concerned the first 14 weeks of maternity leave, and there remains the possibility of arguing that the nature of maternity leave changes after the first 14 or 26 weeks and therefore that enhancement beyond that point may yet be discriminatory. We also understand that the Employment Appeal Tribunal is to hear an appeal from another tribunal’s decision that Powys County Council’s failure to enhance shared parental pay was not discriminatory even though it enhanced adoption pay.
Employers may also want to consider that the limited statutory pay for shared parental leave has contributed to its low take-up, and unequal sharing of childcare responsibilities has in turn been seen as contributing to the gender pay gap. These issues are clearly on the Government’s agenda following last year’s consultation on possible reform to family-friendly leave, but it is yet to announce any changes.
In July 2019 the Government published its response to a consultation on extending redundancy protections to those on family leave, but without specifying any particular timetable for doing so.
Currently women on maternity leave are given priority over any suitable alternative vacancies should their role be made redundant. An employer’s failure to offer any such available vacancies renders the consequent redundancy dismissal automatically unfair. The Government has committed to extend this right of priority over vacancies to apply from the point at which the employee notifies the employer – whether orally or in writing – that she is pregnant, until six months after the end of maternity leave (even if the mother does not immediately return to work due to taking another form of leave at that point).
Similar protection will be available for those taking adoption leave. The Government intends also to provide protection for those taking shared parental leave, proportionate to the amount of leave taken and the threat of discrimination, but has yet to determine exactly how this will work. No additional protection will apply to paternity leave.
The Government will also establish a taskforce of employer and family representative groups to make recommendations on improvements to the information available to employers and families on pregnancy and maternity discrimination, and to develop an action plan to facilitate pregnant women and new mothers staying in work.
The Government also published Good Work Plan: Proposals to support families setting out three new consultations on:
- a new right to neonatal care leave from ‘day one’ of employment, with flat rate statutory pay conditional on 26 weeks’ service at the 15th week before the baby is due. Where a newborn is in hospital for neonatal care for at least 2 continuous weeks, the number of weeks, capped at a limit to be specified (suggested options are 2, 3, 6, or 12 weeks), would be added on to the end of maternity or paternity leave. Consultation ends on 11 October 2019.
- whether larger employers (with 250 or more employees) should be required to publish their policies on flexible work and family related leave and pay on their websites, possibly with key information to be included on the government’s gender pay gap reporting portal; the consultation also asks whether and how (all) employers should be required to set out their approach to flexible working in job adverts. Consultation ends on 11th October 2019.
- the case for a potentially radical reform of family leave and pay, including possible changes to paternity, shared parental and maternity leave and pay and their possible replacement with a single ‘family’ set of entitlements, with the aim of encouraging greater sharing between mothers and fathers of leave and childcare responsibilities. The consultation closes on 29th November 2019. The Government is currently evaluating the shared parental leave regime and expects to report on this later in 2019.
The Government Equality Office has published Gender equality at every stage: a roadmap for change, which mentions some of the initiatives above but also confirms plans to consult on a new right to carers’ leave, review the enforcement of equal pay legislation (including consideration of when mandatory equal pay audits could be appropriate), and assess the effectiveness of gender pay gap reporting with consultation on any changes by 2021. The roadmap also mentions the possibility of requiring employers to publish retention rates for employees returning from parental leave.
The Court of Appeal has ruled that an employer’s failure to enhance shared parental pay in the same way as enhanced maternity pay was not unlawful. The Court considered that a woman on maternity leave was not in comparable circumstances to someone on shared parental leave, as the purpose of maternity leave was to provide special protection for the health and wellbeing of mothers in connection with pregnancy, childbirth and breastfeeding, whereas the purpose of shared parental leave is to facilitate childcare.
In Ali v Capita Customer Management Ltd the claimant argued that a failure to enhance shared parental pay to mirror enhanced maternity pay (payable for 12 weeks’ maternity leave in addition to compulsory maternity leave) was direct discrimination. This was rejected on the basis that the correct comparator was a woman on shared parental leave, who would be treated equally, and not a woman on maternity leave. In any event, the claim would be defeated by the statutory provision precluding account being taken of special treatment afforded to a woman in connection with pregnancy or childbirth. The Court was not persuaded by arguments that the purpose of maternity leave had been changed by the introduction of the right to swap it for shared parental leave (after compulsory maternity leave). It did not have to decide whether the same applied in relation to additional maternity leave starting 26 weeks after birth, given the short period of maternity enhancement in this case. The Court also did not consider it necessary to consider the fact that non-birth parents now have identical rights to mothers on maternity leave.
In the joined case of Chief Constable of Leicestershire Police v Hextall, the claim was framed as one of indirect discrimination. Overturning the EAT, the Court of Appeal ruled that the claim (again in relation to pay for 12 weeks’ shared parental leave) could only be brought as an equal pay case for breach of the statutorily implied sex equality clause in the contract of employment, and that this would be defeated by the express statutory provision that such claims could not be brought in relation to terms affording special treatment to women in connection with pregnancy or childbirth. Statute prevents equal pay claims being framed as sex discrimination actions (even if the equal pay claim could not succeed). Further, even if the claim could properly be brought as an indirect discrimination claim, that would also fail as (i) the pool for comparison would only include women on shared parental leave and not those on maternity leave (for the same reasons as in Ali), and (ii) in any event the differential treatment would have been justified by the legitimate aim of providing special protection for women in connection with pregnancy and childbirth.
Although this ruling will be welcome to employers who provide more generous pay for those on maternity leave than for those on shared parental leave, permission to appeal to the Supreme Court has been sought. It is also worth noting that equalising pay enhancement, to encourage greater take-up of shared parental leave by men, has been repeatedly suggested as one measure to help reduce the gender pay gap.
Many employers who enhance maternity pay have chosen not to mirror this for shared parental leave, pending clarity as to whether this could be direct or indirect sex discrimination. The EAT has now given its first rulings on the issue. In Capita v Ali, the EAT ruled that a failure to mirror enhanced maternity pay was not direct discrimination, at least where the enhancement is only for the first part of maternity leave (at least the first 14 weeks, possibly 26 weeks). In its view, the purpose of this part of maternity leave is to protect the health and wellbeing of the mother during pregnancy and following childbirth, and therefore this leave is not comparable to shared parental leave, the purpose of which is to care for the child. Continue reading
From 6 April 2018, the cap on the unfair dismissal compensatory award increases from £80,541 to £83,682 and the cap on weekly pay (used to calculate the unfair dismissal basic award and statutory redundancy pay) increases from £489 to £508. This gives a maximum unfair dismissal award of £98,922. Note that since 29 July 2013 there has been an additional cap on the compensatory award of 12 months’ pay.
The bands for injury to feelings awards have also been increased for claims presented on or after 6 April 2018; the lowest band starts at £900, the middle band at £8,600, and the highest band starts at £25,700 with a cap of £42,900 (save in exceptional cases).
From 6 April 2018 the weekly rate of statutory sick pay increases to £92.05 per week (from £89.35) and from 1 April 2018 the weekly flat rate of statutory maternity, paternity, adoption and shared parental pay increases to £145.18 per week (from £140.98).
The national minimum wage rates increases from 1 April 2018. Workers of 25 years and older will be entitled to be paid a minimum national living wage of £7.83 per hour (increased from £7.50).
The Fawcett Society has published its Sex Discrimination Law Review, calling for:
A tribunal has ruled that an employer’s failure to enhance pay for shared parental leave (SPL) to the same level as enhanced maternity pay is direct sex discrimination.
Employers who enhance maternity pay but not shared parental pay should be aware of a first instance decision that, if upheld on appeal, could require them to change their approach. The tribunal in Ali v Capita Customer Management Limited has upheld a father’s direct sex discrimination claim in relation to his employer’s refusal to pay him 12 weeks’ full pay during shared parental leave, when a mother taking maternity leave would have been entitled to 12 weeks’ full pay (in addition to 2 weeks’ fully paid compulsory maternity leave).
Changes to shared parental leave and adoption leave entitlements as well an increase in the re-employment age ceiling will take effect from 1 July 2017. This is a good juncture for companies to review their employment policies to ensure they will be compliant.
From 6 April 2017 UK employers with an annual pay bill of or over £3 million will be required to pay an apprenticeship levy at a rate equivalent to 0.5% of their payroll costs, subject to an offset allowance of £15,000. Employers in England that pay the levy will be able to access funding through a digital service which is expected to open from 1 May 2017. Updated guidance is available here. The offence of wrongly advertising work as a statutory apprenticeship also came into force on 1 April 2017.
From 6 April 2017, the cap on the unfair dismissal compensatory award will increase from £78,962 to £80,541 and the cap on weekly pay (used to calculate the unfair dismissal basic award and statutory redundancy pay) will increase from £479 to £489. This gives a maximum unfair dismissal award of £95,211. Note that since 29 July 2013 there has been an additional cap on the compensatory award of 12 months’ pay.