Divergence in Pay Between Women and Men in Shared Parental Pay Is Not Discriminatory, UK Supreme Court Rules

An employer that refused to offer a discretionary pay enhancement to a male employee who had availed himself of the statutory right to take shared parental leave did not run afoul of sex discrimination rules or breach the Equality Act 2010 (EA), even though the employer had offered the enhancement to a female employee taking statutory maternity leave, the Supreme Court of the United Kingdom ruled in Chief Constable of Leicester v. Hextall.

The claimant had sought leave to appeal the court of appeal’s May 2019 ruling in the combined cases of Ali v. Capita Customer Management Limited and Chief Constable of Leicester v. Hextall, [2019] EWCA Civ 900. The UK Supreme Court said the central issue in the case was “whether it is unlawful discrimination on the basis of sex—whether direct, indirect, or” due to “the operation of the sex equality clause” in the EA—“for men to be paid less on shared parental leave than birth mothers are paid on statutory maternity leave.”

Under UK law, employees who take maternity or shared parental leave are entitled to statutory payments for a total of 39 weeks. During the first 6 weeks, employees are entitled to 90 percent of their average weekly earnings (AWE). For the remaining 33 weeks, employees are entitled to either 90 percent of their AWE or the statutory rate per week, whichever is less.

Female employees are entitled to 52 weeks’ maternity leave and to receive up to 39 weeks as paid leave. However, parents can share up to 50 weeks of leave and 37 weeks of pay (after the expiration of a 2-week compulsory maternity leave period). Employees who opt to take shared parental leave must follow a strict notice procedure in order to avail themselves of this right. Employers may refuse requests for shared parental leave should employees fail to give proper notice.

To boost employee retention and attraction, employers often offer discretionary pay enhancements to female employees’ maternity pay. Some employers have also chosen to offer the same enhancements to male employees who take shared parental leave.

Due to the Supreme Court’s decision, employers that decide to not provide pay enhancements for male employees who take shared parental leave now have a measure of certainty that their approach does not breach the EA. Employers may nevertheless want to consider messaging issues, including previous statements they might have made about diversity and support for family life, before deciding whether to reduce pay enhancements for male employees. Whilst the legal risk of variance in enhanced pay for maternity and shared parental leaves has been reduced, there still may be risks to employee and public relations to be considered when implementing policies around family leave.

Written by Rebecca Emery of Ogletree Deakins

© 2020 Ogletree, Deakins, Nash, Smoak & Stewart, P.C.