EAT leaves the door wide open for indirect sex discrimination claims to succeed in latest twist in shared parental leave cases
Hot on the heels of the Employment Appeal Tribunal’s helpful decision in Capita Customer Management Ltd v. Ali, a case concerning direct sex discrimination which we featured last month, the Employment Appeal Tribunal has now published its decision in the case of Chief Constable of Leicestershire Police v. Hextall, a case about whether not enhancing statutory shared parental pay, was potentially indirectly discriminatory against men, when the same employer offered mums the opportunity to receive enhanced maternity pay.
The EAT held that such a policy or practice could be indirectly discriminatory, and has sent the case back to a fresh Tribunal to decide whether the policy was, in fact, indirectly discriminatory and, if so, whether the employer could justify such disparate treatment.
What does the Hextall decision mean for employers?
Employers who do not match shared parental pay with enhanced maternity pay need to be alive to the very real risk of finding themselves faced with indirect sex discrimination claims.
While it is down to the new Tribunal to decide whether the practice in Hextall was discriminatory, the focus will undoubtedly be on the employer as to whether they can justify the pay disparity between the two leave arrangements. Put simply, why do they pay female police officers more for being on maternity leave for the relevant enhanced pay period, and does that stack up when looked at the impact of not paying enhanced benefits for those (men) on shared parental leave?
People may remember the case of Shuter v Ford Motor Company another indirect sex discrimination claim but in arena of additional paternity leave (the precursor to shared parental leave). In that case Ford were successful in defending the indirect sex discrimination claim because they were able to say, and, evidence, that women were attracted to Ford because of their maternity benefits and they had a legitimate aim in attracting, retaining and developing female talent because of the poor representation of women across the workforce which they were trying to redress through a variety of measures, one being a generous maternity package.
How many employers could, like Ford, produce compelling evidence to justify the different rates of pay? We don’t think employers will have to meet the lofty standards that Ford were able to demonstrate, but in light of this decision, employers of all sizes will need to evaluate carefully why they do not provide matched benefits. Questions like: what is the business’ aim in providing the enhancement to maternity pay; how effective is the policy at achieving that aim; could the same aim be achieved through different means? These are all relevant questions which now need to be posed, and answered. Without having undertaken that type of analysis, and reached some satisfactory conclusions, employers of all sizes will be exposed to costly legal claims.
The hope is that cases like Hextall will trigger employers to start to enhance shared parental pay, and not before time, to kick start the take up of this important benefit. The fear is that it has the polar opposite effect and force employers to level down, and remove enhanced maternity pay to mitigate against the risk. And that would, truly, be a retrograde step.