The future direction of shared parental leave and shared parental pay

19 April, 2018

The Government has promised to carry out an evaluation of shared parental leave (SPL) this year, including statistics on its take-up and the barriers that fathers face when considering or requesting shared parental leave.  These barriers start with the “maternal transfer” design of the SPL scheme, by which all SPL which the father takes acts to reduce the mother’s leave entitlement, and which arguably reinforces the traditional view of caring as the mother’s role and responsibility.  The practical obstacles to SPL also include the complexity and bureaucracy of the statutory scheme.

For many families, the main barrier they face when considering SPL is financial, and the option of SPL is seen as unaffordable.  This is a clear effect of the gender pay gap between mothers and fathers.  In households in which both parents are in paid work, two-thirds of fathers are paid more than mothers – and so there is a clear financial disincentive against their taking SPL.  But the greater involvement of fathers in caring responsibilities is seen as vital to changing workplace culture and societal norms, and in tackling the “parenthood penalty” which is one of the major causes of gender pay disparity in the first place.

Increasing paternity leave and paternity pay

There is pressure on the Government to move towards creating more substantial paternity leave entitlements for fathers, both in duration and in rates of pay.  Sweden and Iceland are cited as examples of countries having effective models of dedicated “daddy leave” which attract very high take-up rates.  Last month’s report by the Women and Equalities Committee suggested introducing a new policy of 12 weeks’ standalone paternity leave in the child’s first year, to replace SPL, paid at 90% of salary for the first 4 weeks (capped for higher earners) and at statutory levels for the remaining 8 weeks.

This recommendation reflected the Government’s evidence to the Committee that the SPL scheme for most fathers is not meeting its objective of encouraging fathers to take a more active and engaged role in bringing up their children.  A key conclusion by the Committee was that current policies do not support fathers who want to take a more equal share of childcare and are not keeping up with social change.

Enhancing shared parental leave pay

Some companies are now taking the lead in supporting working parents, ahead of legislative change, through their provision of enhanced shared parental pay.  For example the insurance company Aviva now offers all UK employees 26 weeks’ full basic pay following the arrival of a new child, regardless of gender, sexual orientation or how they became a parent.  Aviva has expressed this policy as forming part of their strategy to create a diverse and inclusive working culture in which barriers to career progression are removed.

Discrimination claims based on enhanced maternity pay

If an employer offers enhanced maternity pay, is it duty bound to enhance shared parental pay? This is the question addressed by the Employment Appeal Tribunal last week in the case of Capita Customer Management Ltd v Ali.  Mr Ali brought a claim of direct sex discrimination for not being entitled to pay at the same rate as Capita paid to a woman for the first 14 weeks of maternity leave.  The EAT decided that he could not validly compare his circumstances to a women taking maternity leave, in particular since the primary purpose of maternity leave (according to the European directive) is to support the mother’s health and well-being.  The EAT also based its decision on the provision in the Equality Act that on a sex discrimination claim brought by a man, no account is to be taken of special treatment afforded to a woman in connection with pregnancy or childbirth.

The EAT said that it may be possible to draw a valid comparison where a discrimination claim is based on the additional maternity leave period, when it may well be that the primary purpose of maternity leave becomes care for the child, rather than recovery from childbirth and the special bonding period between mother and child.

Judgment is awaited from the EAT in another case heard in January, Hextall v Chief Constable of Leicestershire Police.  At the Employment Tribunal Mr Hextall failed in his direct discrimination and indirect discrimination claims challenging the police force’s practice of paying 18 weeks’ enhanced maternity pay but not enhancing shared parental pay beyond statutory rates.  It is possible that the EAT will reach different conclusions in this case although the likelihood is that it will follow the Capita decision.

In both cases, the correct comparator to a direct sex discrimination claim was identified as a female employee taking shared parental leave.  Employers will clearly be exposed to discrimination claims if they enhance shared parental pay for women but not for men, or vice versa.

If you have any questions concerning shared parental leave or related issues, please contact Patrick Glencross at patrick.glencross@crippspg.co.uk or on 01892 765419.

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