There was a lot of discussion about shared parental leave and pay when this right was brought in, back in 2014.  Many saw it as a positive change, because mothers can now share part of their maternity leave with the other parent.  Although, there has been a low take up of the right in practice by new parents and this isn't helped by uncertainty around pay arrangements.

For example, when a baby is born, if a dad wants to use part of the mum’s maternity leave and the mum agrees to share it, then what does the dad get paid? If the dad’s employer pays enhanced maternity pay to female employees, does the dad get enhanced pay as well?

The case of Capita Customer Management Limited v Ali has provided some clarification for both employers and employees.  Many employers are likely to welcome the decision from a financial perspective.  Although, the outcome of this case will do little to change the low take up of shared parental leave or to encourage employees to take it.  

A recap of Shared Parental Leave and Pay

So, what is Shared Parental Leave (SPL) again? SPL allows mothers to end their maternity leave early and share the untaken maternity leave with the other parent. Adoptive parents can make use of SPL as well.  The sharing of maternity leave only applies to 50 of the 52 weeks of maternity leave, because the mum has to take at least 2 weeks of her leave.

So, what is the pay position then? The parents get 37 weeks of paid shared parental leave to take or share between them.  Interestingly, the statutory rate paid for SPL each week is the same amount as mothers receive as statutory maternity pay each week.  This raises the question of what happens where an employer offers female employees enhanced maternity pay, do male employees get this as well? 

The case of Capita Customer Management Limited v Ali has provided some answers to that question for us.  

Capita Customer Management Limited v Ali 

In this case: 

  • Mr Ali was employed by Capita Customer Management Limited (Capita) – his employment transferred from Telefonica to Capita in 2013;
  • Following the birth of his daughter, Mr Ali wanted to take SPL and Capita confirmed he could do so. Mr Ali would be paid the statutory amount for the SPL;
  • Mr Ali asserted that he should receive the same amount that female employees who had transferred to Capita would get if taking maternity leave – female employees were entitled to enhanced maternity pay for the first 14 weeks of their maternity leave; and
  •  Mr Ali raised a grievance internally and then brought claims alleging direct and indirect sex discrimination.

Mr Ali argued that he had been treated less favourably by his employer as a result of his sex. However, under discrimination laws, when looking at whether a man has been discriminated against in this way, no account can be taken of certain special treatment afforded to women in connection with pregnancy or childbirth.   However, case law has confirmed that there are limits to this protection and that pregnant employees and those on maternity leave should only be treated more favourably to the extent that this is reasonably necessary to remove the disadvantages occasioned by their condition.  

In Mr Ali’s case, he was initially successful with his claim of direct discrimination. The first tribunal held that Mr Ali had been directly discriminated against on the ground of his sex.  The tribunal agreed that Mr Ali could compare himself with a hypothetical female transferred employee taking leave after the 2 week compulsory period. The tribunal did not consider that the special treatment exemption mentioned above should apply beyond that 2 week period, because either parent could take on the care of the child then and it was not exclusive to the mother.

Capita appealed to the EAT and their appeal was successful. The EAT considered that the tribunal’s findings were incorrect.  The EAT referred to European legislation, part of which refers to the need for member states to provide a minimum of 14 weeks' maternity leave paid at a certain level.   In this context, it considered that maternity leave and pay is for the health and wellbeing of the mother. By contrast, the purpose or reason for SPL is for the care of the child. 

The EAT concluded that Mr Ali should not be able to compare himself to a woman on maternity leave and found that the correct comparator was a woman on SPL. Mr Ali had not been discriminated against, because a woman on SPL would receive the same statutory sum.   In addition, the EAT considered that even if Mr Ali could compare himself to a woman on maternity leave as the first tribunal had found, then the tribunal’s other finding that the treatment did not fall within the special exemption for women in connection with pregnancy or childbirth was also incorrect.

What does the case development mean in practice?

So, on the face of it, this case suggests that employers should not need to match enhanced maternity pay schemes for male employees taking shared parental leave. However, it is never as simple or straightforward as that is it? 

In the case of Ali, the EAT was discussing the pay arrangements in the context of the first 14 weeks of leave.  The EAT did go on to confirm that the position may be different if considering the position after 26 weeks. The EAT noted that it may be that, after 26 weeks, the purpose of maternity leave could change from the biological recovery and special bonding period between mother and child to a period where a comparison could be drawn between a father on SPL and a mother on maternity leave.   Taking into account the EAT's comments here, I expect that we will see further litigation in situations where a male employee’s employer offers enhanced maternity pay to female employees beyond 26 weeks. 

This case highlights some difficult issues and calls into question whether the legislation is achieving its purpose.  Whilst parents can share leave, and that is a welcome development, if a male employee will only receive basic statutory pay when on SPL, then this may not be sufficient to encourage male employees to take SPL in practice. 

In addition, if male employees can challenge the pay position after 26 weeks - which remains unclear -  is this going to discourage employers from offering female employees enhanced entitlements after that period? I can see that there may well be some reluctance to do so if challenges may be brought and this can’t have been the intended impact of the SPL legislation.

The case development provides some guidance for employers and employees, but also leaves some important questions still unanswered.