Shared parental leave. To enhance or not enhance, that is the question...

Shared parental leave. To enhance or not enhance, that is the question...

Published: 20 June 2017

A recent Employment Tribunal case addressed the question of whether employers who provide enhanced Maternity Pay should now apply the same enhancement to their staff who take Shared Parental Leave, or risk claims for discrimination…

A significant recent case?

Since the inception of Shared Parental leave, it has always been the position that women and men taking Shared Parental Leave must be paid the same and treated equally. However, since only a woman on maternity leave can be given maternity pay, she can be treated differently from a person of any gender taking Shared Parental Leave.  The recent case of Ali –v- Capita Customer Management Limited [ET/ 1800990/2016], however, takes a different view.

In the Ali case, it was held to be direct discrimination that a father who took shared parental leave was paid full pay for only 2 weeks paternity leave, when his employer offered women on maternity leave 14 weeks full pay. The father argued that he should have received the additional 12 weeks leave on enhanced pay that a female, on maternity leave and in the same position would have received when his wife was advised to return to work for medical reasons and he was required to become his child’s primary carer.  His employers Shared Parental Leave pay was statutory rate only. 

His case tested existing gender assumptions and the Employment Tribunal felt that such assumptions had no place in the modern workplace and indeed, took away the choices of parents to decide whom would take the principal child-caring role.  Capita has, however, announced it will be appealing the decision.

This is the third case of its kind, but the decisions have been mixed. Whilst the judiciary starts to grapple with these issues, we are apparently no closer to establishing a definitive position on whether men/husbands/partners are or should (also) be entitled to enhanced pay under the provisions of Shared Parental Pay if there is also provision for enhanced maternity pay in their employers’ policies. 

What must Employers currently do?

Some 30% of employers in the UK have some kind of maternity pay enhancement; so clarification of the position is long overdue.  That said; there is no statutory requirement for employers to provide such enhancement, and neither does the government (yet) consider that there is any need for employers to do so. Their assurances in the Business, Energy and Industrial Strategy (BEIS) Employers Technical Guide to SPL was (and remain) unequivocal

“It will be entirely at the discretion of employers whether they wish to offer occupational parental schemes for men and women taking shared parental leave. The way in which employers respond to these changes will therefore vary across different employers based on their individual business plans”

In addition, the three decisions in this area (presently) do not amount to binding case law, so no obligation is placed on employers to provide such an enhancement now; but it is perhaps an early indicator of where the legal position is heading. Whilst Tribunal decisions are not necessarily binding on other tribunals, a decision of the Employment Appeal Tribunal (EAT) or a higher court would be, and it is that which is required to provide the much needed transparency in this area. 

That said…employers that offer enhanced maternity packages usually do so because of the benefits of attracting and rewarding high-calibre employees, rather than just to avoid discrimination claims.  It is clearly a significant recruitment and retention benefit.

What does the future hold?

Whilst it was known that the implementation of this Shared Parental Leave system would be unlikely to transform society's habits overnight (for example - the government's forecast is that only 2% to 8% of eligible employees in 2017/18 will take it up); one of the greatest reasons for low take up of additional paternity leave was believed to be the lack (or low level) of pay available. In a similar vein, therefore, take-up of Shared Parental Leave is therefore likely to be much higher among employers who offer an enhanced level of pay.

Our advice to Employers

This being the position, should employers who are considering enhancement be concerned that it will open floodgates regarding employees on leave and be financially crippling for their businesses?  Apparently, business financials would be expected to even themselves out as women “trade in” their maternity pay for SPL, and return to work – so it might well be the case in future that fathers are indeed left holding the baby.

For more information about how we can help you to introduce or adapt your family friendly policies, please contact Andrea London, Partner & Head of Employment on Andrea@Fletcherday.co.uk or on 0207 632 1442