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18 September 2014

Employer’s policy did not discriminate

In a recent decision an employment tribunal held that an employer’s policy to pay maternity pay at an enhanced rate was not discriminatory towards male employees who only received the statutory rate of paternity pay.

The claimant, Mr S, was employed by Ford Motor Company Ltd. After his wife returned to work from a period of maternity leave, Mr S took approximately 20 weeks additional paternity leave (APL) to care for his newborn child during which he was paid additional statutory paternity pay.

Ford has, for several years, had a policy of paying enhanced maternity pay at the employees’ full rate of pay for 52 weeks.  When APL was introduced in 2011, Ford made the decision to pay APL at the statutory rate.

Mr S claimed that Ford’s policy resulted in male employees taking APL receiving less favourable treatment than a woman who continued to take maternity leave after 20 weeks and received her full pay. Mr S brought claims of direct and indirect sex discrimination in the employment tribunal.

Decision

The employment tribunal dismissed both of Mr S’ claims.  There was no direct sex discrimination since a female employee who was the spouse or civil partner of the birth mother would also only be entitled to additional statutory paternity pay.

In addition, the tribunal observed that there was an important health and safety aspect to maternity leave and that the special treatment afforded to women for pregnancy or childbirth-related issues is permitted under the Equality Act 2010.

However, the tribunal accepted that the payment of enhanced maternity pay was indirectly discriminatory towards male employees. The policy was, however, capable of justification since Ford could show that it formed part of the company’s wider strategy to assist with the recruitment and retention of female staff in a traditionally male-dominated sector. Although the tribunal found that Ford had missed its target, there had been a significant increase in the percentage of female employees.

Comment

Whilst only a first level decision (which might be appealed) and not binding on other tribunals, this decision provides an interesting illustration of how tribunals might treat the payment of statutory shared parental pay (SSPP) by employers offering enhanced maternity pay.

The new system of shared parental leave will apply to parents of children born on or after 5 April 2015, and the existing additional paternity leave regime will be abolished. It is unlikely that a male employee receiving SSPP will succeed in a claim of direct sex discrimination, if female employees are paid enhanced maternity pay.

However, where an employer’s enhanced maternity pay is more generous than SSPP, they may still risk a claim of indirect sex discrimination, particularly if in practice more men take shared parental leave than women.

It remains to be seen how tribunals will deal with any such claims, but if they follow the approach taken in this recent case, it might prove difficult for employers to justify the difference in treatment unless they can demonstrate that it forms part of considered policy to encourage and support female employees to remain in the workplace.

We will be exploring the new system of shared parental leave in the forthcoming Chamber of Commerce HR Forum on 12 November 2014.