May 27, 2015

Shared Parental Leave and Pay – Could this be discriminatory?

Two important new pieces of legislation are now live – Shared Parental Leave (ShPL) and Pay (ShPP).

This means that either parent may take Shared Parental Leave (for a maximum of 50 weeks as the first two weeks of Maternity Leave is compulsory for the mother) and Shared Parental Pay is to be paid at the same rate as Statutory Maternity Pay for a maximum of 37 weeks.

There is no statutory requirement for employers to pay any enhancement to Shared Parental Pay and many employers will therefore offer only the minimum statutory amount.

So if it’s shared between each parent, how can it be discriminatory?

The simple answer in most cases is that it isn’t.  A parent of either sex can take Shared Parental Leave and receive statutory Shared Parental Pay.

However, there could be a problem if you offer enhanced Maternity Pay and not enhanced Shared Parental Pay – you could be subject to a claim of discrimination.

How can this be the case when either parent taking Shared Parental Leave will be paid the same?

Take the scenario of a company paying enhanced Maternity Pay but only statutory Shared Parental Pay.  If you look at direct discrimination, then this is likely to be unsuccessful.

As the company in this scenario only pays statutory Shared Parental Pay, then whoever is on Shared Parental Leave, whether a man or a woman would get no additional pay and therefore there could be no direct sex discrimination.

But what about indirect discrimination?

By failing to offer enhanced Shared Parental Pay when you offer enhanced Maternity Pay could leave you in a more likely position to receive a claim of indirect discrimination.

A recent case, Shuter vs Ford Motor Company Ltd, claimed indirect discrimination as Maternity Pay was enhanced, but Additional Paternity Pay was at the statutory rate.

Although this case is referring to Additional Paternity Leave, this has now been replaced by Shared Parental Leave and Shared Parental Pay, so the claim would still be valid.

Mr Shuter’s claim was that he should have received enhanced pay at the same rate as the company’s enhanced Maternity Pay.

The Tribunal accepted Mr Shuter’s claim that men (as a group), and Mr Shuter himself, had been disadvantaged by Ford’s policies.

However, Ford were able to objectively justify their reason for the enhanced maternity policy as they had actively looked to recruit more women into the predominantly male workforce and the offer of enhanced Maternity Pay was key to them doing so.

They were able to produce very detailed evidence that the policy was working, showing that the number of female employees had significantly increased and, as a result of the evidence provided, Mr Shuter’s claim was not upheld.

This outcome would likely have been very different if Ford had not been able to produce such evidence.

It is likely that many companies would be unable to offer such evidence to justify the difference in their policies.

How can you reduce the risk of a claim?

The easiest way to avoid indirect discrimination claims is to enhance Shared Parental Pay to the same level as your enhanced Maternity Pay, but this could be economically restrictive, especially in a male dominated workforce, and especially if your Maternity Pay enhancement is significant.

It may be possible to reduce the risk of a claim if you were to offer a lower enhancement to Shared Parental Pay, but the risk would not be entirely removed and you would need to objectively justify why the enhancement of the Shared Parental Pay was lower than the enhanced Maternity Pay.

Some companies are intending to look at the take-up levels of Shared Parental Leave and review the situation once they have this information to hand.  Although this could be a risk, it may be the only option for some companies.

Could it be a benefit?

However, there is one other consideration which must be investigated – could the introduction of enhanced Shared Parental Pay be introduced as a benefit from an employee relations perspective?

This is something which could be particularly important in terms of retaining your workforce if your competitors offer this benefit.

If you need advice or assistance on Shared Parental Leave or Pay, contact us. This month, you can also attend our Shared Parental Leave Webinar.

By Elaine Pritchard

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