In Capita Customer Management v Ali & Working Families (Intervenor), the EAT has held that it is not direct sex discrimination for an employer to pay enhanced pay to a women on maternity leave despite not enhancing shared parental pay (ShPP) for a man taking shared parental leave.

Mr Ali was transferred to Capita from Telefonica in 2013.  Under the company’s policy, female employees were entitled to maternity pay comprising 14 weeks’ basic pay followed by 25 weeks’ statutory maternity pay (SMP).  However, male employees were entitled to 2 weeks’ paid paternity leave and up to 26 weeks’ additional paternity leave which “may or may not be paid”.

After taking his 2 weeks’ paid paternity leave, Mr Ali wanted to take further leave to look after his daughter.  After enquiring about his entitlements, Capita told Mr Ali that he was eligible for shared parental leave but that he would be paid only statutory ShPP.  After challenging this on the basis that he should be entitled to the same pay as a female employee taking maternity leave, Mr Ali brought a claim alleging direct and indirect discrimination.  The Tribunal held that Mr Ali had been directly discriminated against on the ground of his sex, considering that Mr Ali could compare himself with a hypothetical woman taking leave after the 2 week period of compulsory maternity leave.  The Tribunal concluded that the preferential treatment for women in connection with pregnancy or childbirth should not apply beyond this compulsory leave period.  Capita appealed.

The EAT found that the purpose of shared parental leave (SPL) is different to maternity leave: maternity leave is concerned with the health and wellbeing of the pregnant and birth mother, whereas SPL focuses on the care of the child.  Accordingly, the correct comparator for Mr Ali’s claim was not a woman on maternity leave, but a woman on shared parental leave, who would have had the same entitlements as him.  The EAT further held that the Tribunal had erred in finding that it should have taken “no account … of the special treatment afforded to a woman in connection with pregnancy or childbirth”.

It was further noted that after 26 weeks, the purpose of maternity leave may change and at that point, it may be possible to draw a valid comparison between a father on SPL and a mother on maternity leave.

There is no doubt that this decision will be welcomed by employers that do not replicate enhanced maternity benefits for those on shared parental leave.

However, the final position will likely be set out in the Hextall v Leicestershire Police appeal, the judgment of which is expected in the coming weeks.  This will consider the question of whether it is indirect sex discrimination to pay male employees on shared parental leave at a lower rate than female employees on maternity leave.

Our upcoming HR forum on 6 June 2018 will discuss these two cases and the practical implications of the same in further detail – please register here if you are interested in attending.

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