Indirect sex discrimination claim succeeds for failure to pay enhanced shared parental leave payout
Snell v Network Rail
Indirect sex discrimination claim succeeds for failure to pay enhanced shared parental pay
In this first reported decision challenging an employers failure to offer equivalent benefits between mothers taking maternity leave and parents taking shared parental leave, the employment tribunal ruled that the failure to pay enhanced shared parental pay, where it already paid enhanced maternity pay, did amount to indirect sex discrimination.
As already mentioned in the case law post on breastfeeding, the fact is thatemployment tribunal decisions are not binding on other employment tribunals. However, if the legal issues here are confirmed in a subsequent Employment Appeal Tribunal decision, the approach followed in this case will have significant consequences for those employers that choose not to provide enhanced benefits to parents taking shared parental leave – in the circumstances where they already offer enhanced maternity pay.
The Law
Shared Parental Leave entitles parents to share up to 50 weeks of leave and 37 weeks of pay in the year following the birth or adoption of their child, provided that they meet certain eligibility requirements.
The minimum rate of Shared Parental Pay is set by the Government and is currently £139.58 a week or 90% of an employee’s average weekly earnings, whichever is lower.
The Government has previously advised that it is “entirely at the discretion of employers whether they wish to offer” enhanced shared parental pay and has suggested that it would not be discriminatory if women were paid enhanced maternity pay but men and women were not paid enhanced shared parental pay. However, this advice was precarious and vulnerable to challenge after an earlier tribunal decision in Shuter v Ford Motor Company. This case left open the likelihood that a failure to pay fathers enhanced additional paternity pay in circumstances where mothers received enhanced maternity pay could possibly amount to indirect sex discrimination.
Background
Mr Snell and his wife both work for Network Rail. His wife intended to take 27 weeks’ leave following the birth of her child, whilst Mr Snell requested to take 12 weeks’ leave. Mr Snell subsequently discovered that whilst his wife would be entitled to 26 weeks’ full pay, he would only be entitled to shared parental pay at the statutory rate.
Mr Snell raised a grievance, alleging that Network Rail’s policy constituted sex discrimination. That grievance was not upheld. Network Rail advised Mr Snell that it had complied with its legal obligations as it was only required to pay him statutory shared parental pay. Mr Snell’s grievance appeal was also rejected.
Mr Snell raised a tribunal claim against his employer and during the course of proceedings Network Rail admitted that its policy was indirectly discriminatory. Mr Snell was subsequently awarded £28,321.03 in compensation by the tribunal.
Interestingly, following this case Network Rail has reduced its maternity payments to bring them into line with statutory payments to avoid discrimination!
Implications for Employers
Following the Shuter case there has always been a risk that the payment of enhanced maternity pay without replicating the benefit for shared parental pay could result in a successful case of indirect sex discrimination. In Shuter the tribunal decided that Ford’s policy was indirectly discriminatory, but held that it was nevertheless a proportionate means of achieving a legitimate aim, or in other words justified for promoting the recruitment, retention and development of women within a male-dominated workforce. Note: In this latest Network Rail case, it is not yet clear whether they argued similarly that its policy was a proportionate means of achieving a legitimate aim, and if it did, why the tribunal did not agree with this.
After shared parental leave was introduced in April 2015 many employers continued to provide enhanced maternity pay but only provided statutory shared parental pay.
In light of this latest decision, employers are advised to definitely document their reasons for not equalising enhanced benefits to reduce any risk of an indirect sex discrimination claim. You must be able to demonstrate that you have a legitimate aim and that your approach goes no further than is necessary to achieve this. The fact that it is simply too expensive to pay enhanced pay to employees on shared parental leave is unlikely to cut any mustard or be sufficient enough.
Or of course you could do what Network Rail seem to have done and reduce the enhanced Maternity Pay to just the statutory maternity pay rate. However, that is not advisable as doing this could in itself cause serious repercussions in terms of causing low morale, reputational damage and contractual challenges, in addition to affecting your ability to attract new employees.
No doubt there will be further challenges and appeals as more people start to use SPL, although it has to be said that the take up of this statutory right has been minimal.
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