Comparing maternity pay rights to shared parental pay

28 February 2020

Over the past few years, tribunals at different levels have given a variety of answers to this, causing businesses concern that they may be accruing ongoing liabilities. We now have clarity on this from the Supreme Court which has recently blocked an appeal from a decision of the Court of Appeal.

One of the cases concerned a male employee and a female employee working for the same employer. The man was entitled first to two weeks’ paternity leave at full pay and then to up to 26 weeks additional paternity leave for which he would receive the shared parental pay flat rate. However, his female colleague, who had retained her entitlement to maternity pay (rather than moving to shared parental leave at the shared parental pay statutory rate), enjoyed 14 weeks full maternity pay followed by 25 weeks statutory maternity pay. The man brought a sex discrimination claim in relation to this differential of pay.

It’s important to remember that, in determining whether a man has been discriminated against because of sex, no account is able to be taken of special treatment afforded to women in connection with pregnancy or childbirth. This is a fundamental principle of discrimination law.

Shared parental leave of up to 50 weeks and shared parental pay of up to 37 weeks are available for eligible parents to take or share. Although the weekly rates for statutory shared parental pay and statutory maternity pay are the same (after the initial six weeks), employers often provide enhanced maternity pay packages usually at contractual pay rates or a proportion of them. 

The question here was whether employers were obliged to match those maternity pay packages for anyone taking shared parental leave who became entitled to shared parental pay. The Government thought that there was no need to do so. It is fair to say that, when shared parental pay is enhanced, employers provide the same shared parental pay to both men and women. The difference however, as in this case, is that enhanced maternity pay packages are generally more financially generous.

The Court of Appeal’s view that this was not sex discrimination was based on the fact that a correct comparator for the man was not a female employee who wished to leave work to look after her child but a female worker who was on shared parental leave. A female on shared parental leave would be paid the same as a man on shared parental leave so there was no less favourable treatment.

The court decided that a man on shared parental leave could not compare himself with a woman on maternity leave because the purpose of statutory maternity leave (after the two week compulsory leave period) was not intended to facilitate childcare. Instead the purposes of statutory maternity leave were for the woman to prepare and cope with the later stages of pregnancy, to recuperate from the pregnancy and to recuperate from the effects of childbirth. It was also for the mother to develop a special relationship with her newborn, to breastfeed the newborn and to care for the newborn.

The impact here is that women can choose whether to continue on maternity leave and enjoy enhanced maternity pay benefits where they are paid by her employer or to take shared parental leave on shared parental pay. This decision often arises at six months after maternity leave has commenced. However, any enhancement that might be paid for shared parental leave (usually applied equally between the sexes) often ends at six months after the beginning of the absence.

Therefore, the statutory regulation which financially favours employees taking maternity leave and disadvantages men taking shared parental leave has been upheld. 

Insofar as campaigners are keen for there to be an equality of pay between men and women for absence for early care of newborns in order to support the woman’s return to work, this opportunity would appear to be missed. Instead we will need UK legislation to seek to drive social change. 

If the Government does intend to retain and enhance employment rights now that we have left the EU, this may well be an area for it to look at to bring our legislation in line with, say, the Scandinavian countries. However, it will need to prepare business for the cost of such a change.

If you would like further information on dealing with maternity pay or shared parental leave, please contact Carolyn Brown