It’s common for larger SMEs to offer contractual maternity pay (pay in addition to the statutory entitlement) as part of their reward and retention strategy. If you offer enhanced maternity pay do you need to do the same for shared parental pay?
There have been two significant cases in recent Months that have argued an employer’s rights to enhance Maternity Pay but offer only the statutory rate for men and women on Shared Parental Leave…
Ali vs Capita Customer Management Ltd
In this case Capita Customer Management offered 14 weeks of full pay to women on maternity leave however employees on shared parental leave only received the statutory amount.
Ali argued that there was a financial incentive for women to stay at home after childbirth and that a mother and father have the same role in taking care of a child post childbirth meaning they should receive the same benefits.
Ali’s case was overturned, and the judges concluded that the arguments were an ‘attack against the whole statutory scheme’ and that the ‘entire period of maternity leave, following childbirth, is for more than facilitating childcare. Arguing that maternity leave/pay is the period for a woman to recuperate from giving birth whilst shared parental leave was predominately about caring for the child.
Hextall vs Chief Constable of Leicestershire Police
Leicestershire Police offer 18 weeks full pay to women on maternity leave followed by 39 weeks of statutory maternity pay, whereas employees on shared parental leave only received the statutory amount.
Hextall argued that he was discriminated of because of his sex. His unlawful direct sex discrimination claim was based on him only being entitled to shared parental pay and therefore received less pay than new mothers who are entitled to enhanced maternity pay.
The court ruled that Hextall could not pursue an indirect discrimination claim. Even if he could, the court did not find that the indirect discrimination claim was valid for shared parental leave is not comparable with maternity leave.
Currently an employer that enhances maternity pay is under no obligations to enhance shared parental pay, as it has been deemed that maternity pay is not solely taken to care for a child but to rest after childbirth.
Despite this ‘Working Families’ CEO has said “To make shared parental leave financially viable for more families, we encourage employers that can afford it to go beyond the minimum statutory pay.
Employers that do not enhance Shared Parental Leave could consider offering further benefits to employees as an alternative e.g. offering flexible working or a phased return to work after statutory leave.