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Failure to enhance paternity pay not discriminatory

In Shuter v Ford Motor Company, an employment tribunal has held that a male employee was not discriminated against when he received only statutory pay during a period of additional paternity leave (APL) whereas a female employee on maternity leave would have received full pay for up to 52 weeks.   Although only a first instance decision which will not bind other tribunals, this case nonetheless serves as a useful reminder to employers that they need to decide an approach to the incoming system of shared parental leave (SPL) and, in particular, to address the thorny issue of whether the benefits of an enhanced maternity scheme should be mirrored for those on SPL.

Facts

Under Ford’s family leave policies,  employees on maternity leave are entitled to occupational maternity pay at the rate of 100% for the whole leave period and employees on the two weeks of ordinary paternity leave are also entitled to 100%.   APL was a new type of family leave which took effect in relation to children born after 3 April 2011;   where the mother returns to work and ends her maternity leave,  the child’s father or the mother’s spouse/civil partner can then take between two and 26 weeks’ APL.   At the time APL was introduced,  Ford reconsidered how it might structure its pay arrangements for family leave.   Its decision was the retain 100% maternity pay and two weeks’ full pay for ordinary paternity leave but to pay only statutory pay for APL.   Among the reasons for this decision were –

  • The APL regime was likely to be temporary as the Government was already consulting on the introduction of SPL;
  • It was usual practice to initially adopt statutory minimum entitlements and then refine entitlements based on experience;
  • Paying APL at 100% would be costly and disruptive to the business given the make-up of Ford’s workforce;
  • 100% maternity pay had been introduced to enhance Ford’s ability to recruit and retain more female employees and assist its diversity targets.  A downwards equalisation of pay for maternity and APL would demotivate female staff; negatively impact the reasons for implementing 100% maternity pay; and  risk litigation and negative publicity;
  • A recognition that APL and maternity leave are different as maternity leave is connected with the biological condition of pregnancy and childbirth and facilitates the special relationship between mother and child;
  • The Government’s advice was that pay for APL did not need to be enhanced to mirror maternity pay and similar employers were not doing so;
  • Ford did not want to subsidise the less generous maternity benefits of other employers;
  • The current 2% take up of ordinary paternity leave was low; and
  • Other European companies in the Ford group did not offer such generous rights.

Ford was also able to provide statistical evidence to the tribunal which demonstrated the need to increase the number of women in its workforce; that an increase had been achieved; and also statistics on the take up of maternity and paternity leave within its workforce.

ET Claim

Following his wife’s return to work after maternity leave,  between July and December 2013,  Mr Shuter took a period of about five months’ APL from his employment with Ford.   He was paid at the statutory rate.  In October 2013,  Mr Shuter issued employment tribunal proceedings alleging both direct and indirect discrimination based on the difference in treatment by Ford of women on maternity leave and men on APL.   Had Ford’s maternity and APL pay policies been the same,  he would have received around £18,000 during his period of leave.

The employment tribunal decided that Mr Shuter had not been subject to either direct or indirect sex discrimination.   

In terms of direct discrimination,  Mr Shuter had sought to compare himself to a woman on maternity leave but the tribunal held that this was not the correct comparator.  Instead, Mr Shuter should be compared to a woman on APL who would, similarly, have received only statutory pay and, as such, there was no less favourable treatment.

In terms of indirect discrimination,  it was accepted that Ford had applied a practice of “paying women basic pay when on leave beyond 20 weeks after the birth of the child when looking after the child”.  It was also accepted that men were likely to suffer a group disadvantage from this practice given that the largest group eligible for APL are fathers.   However, the tribunal decided that Ford’s practice of paying full pay during maternity leave was justified;  its legitimate aim was to retain and increase the number of women in its workforce and its policy on maternity pay was a proportionate means of achieving that aim.

Implications

This is one of the first cases where a difference in pay for women on maternity leave and men on APL has been considered.   It is helpful for employers that, in a well-reasoned judgment, the tribunal found that there was no discrimination.   However,  businesses should not take this as an opportunity to breath a collective sigh of relief.    The decision is only at employment tribunal level so is not a binding authority and it may yet be subject to appeal.   In addition,  the case related to APL which will soon become a thing of the past when SPL comes into effect (for babies expected on or after 5 April 2015).    There are significant differences between APL and SPL including that, for example,  SPL can be taken from two weeks after the birth, rather than 20 weeks as is the case with APL,  and also that a mother and father can take SPL concurrently,  rather than consecutively as is the case with APL.    As such,  it is possible that the courts may reach a different decision when asked to consider a discrimination claim based on differences between maternity pay and pay for SPL.   

What this case is very helpful in demonstrating is the sort of detailed evidence an employer will have to provide in order to justify a decision to enhance maternity pay but not pay for SPL.  Cost alone is not an adequate reason and some additional justification will be required.   Here, Ford had carefully considered the issue when APL was introduced,  had reviewed various options and had identified sound business reasons for the decision to continue to enhance maternity pay only.     This is an exercise which employers who currently enhance maternity benefits will need to carry out before the SPL regime comes into effect and, in this regard, there is no time like the present!

 

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