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13 October 2016

Shared parental pay - £26,000 award where enhancement for mothers was discriminatory

A Scottish employment tribunal has recently awarded over £26,000 compensation (including £6,000 injury to feelings, £16,129 for future loss and £2,779 for failure to comply with the ACAS Code) to a male employee who brought a claim of indirect sex discrimination in respect of the shared parental pay policy in Snell v Network Rail Infrastructure Ltd.

Network Rail offered enhanced shared parental pay to mothers but only statutory shared parental pay to fathers. By the time of the hearing Network Rail had conceded that this was indirectly discriminatory and had amended its policy so that all employees were entitled to statutory shared parental pay only and therefore the decision itself only deals with the remedy.

However, this case is a timely reminder of the discrimination issues which might arise in connection with shared parental pay. It is unsurprising that the employer conceded its policy was discriminatory given it treated men and women differently. But the most significant issue yet to be considered by a tribunal is whether it is discriminatory for an employer to offer enhanced maternity pay but not enhanced shared parental pay. The Government’s Technical Guidance takes the view that this is not discriminatory and there is no statutory requirement to do so. This is on the basis a woman on shared parental leave would be treated in the same way as a man.

However, in our view there is a risk that enhancing maternity pay and not shared parental pay is potentially discriminatory if it can be established that the correct comparator is a woman on maternity leave. This argument is based on the fact that at some point maternity leave ceases to be connected to recovery from childbirth and is for childcare purposes which men are equally capable of providing. This rationale is supported by an EU decision, Roca Alvarez v Sesa Start Espana ETT SA. It is also potentially indirectly discriminatory and an employer who has an enhanced maternity pay only will need to consider its justification for doing so. In Network Rail, before conceding, the employer sought to argue that the policy complied with the legitimate aim of recruiting and retaining women in a male-dominated workforce, an argument which had succeeded in another tribunal case – Shuter v Ford Motor Company. Employers should remember that cost alone is not sufficient justification.

Practical points

There are a number of claims currently claims currently going through the tribunals on this issue and so at some point in the future we will have a more definitive answer. In the meantime:

  • If an employer enhances shared parental pay for mothers but not fathers it is at serious risk of a successful claim of discrimination.
  • Employers who have enhanced maternity pay but not enhanced shared parental pay are at risk of a discrimination claim although whether this will be successful is still to be tested in the tribunal.
  • Although one way of taking away the risk of discrimination claims and saving costs is to level down and remove enhanced maternity pay this is likely to have negative repercussions for example, reputational damage (Network Rail was heavily criticised on social media for levelling down shared parental pay), poor employee relations and low staff morale, and, importantly, if the employer takes away a long-standing financial benefit there may also be breach of contract and other issues.
  • An alternative is to consider whether to level up so that the same enhanced entitlement is available under maternity and shared parental leave policies. This, of course, has cost implications, but it does remove the risk of discrimination claims. This will also have the added benefit of promoting equality and fairness in the workplace, it is likely to result in the increased loyalty and engagement of the employees, and the employer will be seen as progressive which should in turn help to recruit and retain talent from both sexes.