November 14, 2016

Shared Parental Leave poses costly problem to employers

A recent employment tribunal seeing Network Rail pay out £23,000 has highlighted the potential issues employers could face with a Shared Parental Leave and pay policy. See what Shared Parental Leave means, why it’s important employers ensure their policies are non-discriminatory, and the potential consequences of unequal parental pay.

The 10 November 2016 was Equal Pay Day in the UK, marking the day women in the UK effectively stop getting paid and work for free for the rest of the year due to the 13.9% gender pay gap between women and men in full-time work.

However, there is one area where women benefit form enhanced pay where men don’t – maternity pay.

With the introduction of Shared Parental Leave in April 2015, it is now possible for men to take up to 50 weeks Shared Parental Leave to look after a newly born or adopted child.

Yet while many employers provide enhanced maternity pay over and above the statutory minimum, this is often not reflected in Shared Parental Leave policies.

Establishing discrimination in parental leave pay

In the recent Scottish tribunal case Snell v Network Rail Infrastructure Limited S/4100178/2016 [PDF] a father argued that Network Rail’s policy on Shared Parental Leave and pay indirectly discriminated against men.

His claim rested on the basis that mothers were entitled to enhanced shared parental pay while fathers were only entitled to the statutory level of pay.

Mr Snell and his wife both worked for the rail company and opted to share their leave, with their application for Shared Parental Leave indicating his wife would take 27 weeks’ leave and then he would take 12 weeks after.

However, while Mrs Snell would receive full pay for her six months’ leave, Mr Snell was told he would only receive statutory parental pay of £139.58 per week during his parental leave.

Consequences of a discriminatory pay policy – a £23,000 payout

Following an unsuccessful grievance Mr Snell brought an employment tribunal claim of indirect discrimination.

Initially, Network Rail sought to objectively justify the difference in pay because it considered the policy to be a proportionate means of achieving its aim of recruiting and retaining women in a male-dominated workforce.

However, they conceded their policy did indirectly discriminate against men, and the Tribunal awarded Mr Snell approximately £23,000. This included £6,000 injury to feelings and £16,129 for future loss – the difference between statutory shared parental pay and what Mr Snell would have received had he been entitled to the enhanced level of pay.

Network Rail’s argument has been used by many employers wanting to offer employees enhanced maternity pay while only providing statutory shared parental pay, so this decision opens up many other employers to the possibility of similar claims.

The legal position

In response to the employment tribunal claim, Network Rail has amended its Shared Parental Leave policy so that both men and women receive the statutory minimum when taking Shared Parental Leave.

And whilst the decision is not necessarily binding law, businesses should review their Shared Parental Leave policies to ensure men and women are treated equally.

The more interesting question of whether it is discriminatory for employers to enhance maternity pay but not shared parental pay remains unanswered, and the law on this area remains unclear.

However, it is only a matter of time before an employment tribunal is asked to answer this question.

Not sure if your Shared Parental Leave Policy stands up to scrutiny? Our experts can help you devise a Shared Parental Leave policy or provide advice on an existing policy. For extra support on this topic please call the Policy Team on 0844 391 1921.

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About the author

Nicholas Stott

Having initially studied International Development and Politics at Leeds University, Nick converted to Law, graduating from the College of Law London in 2008. Nick trained as a solicitor at a law firm based in London’s West End, before qualifying as an Employment Solicitor in 2010. Since then, Nick has advised businesses and individuals on all aspects of employment law and has particular experience advising businesses from the healthcare, IT and restaurant industries. Nick also has extensive experience undertaking Employment Tribunal litigation.