Paternity and Maternity Pay
In many organisations it is common for an Employer to offer their female employees some form of enhanced maternity pay which goes over and above the legal minimum that has to be paid. The current statutory legal minimum maternity pay is 90% of pay for the first 6 weeks and then £138.18 or 90% of normal pay (whichever is lower) per week for 33 weeks.
In some larger organisations Employers can pay the full weekly rate of pay for the full 39 weeks or up to 52 weeks.
In a recent case in the Employment Tribunal the question arose about whether it is discriminatory treatment to offer women on maternity leave enhanced pay but not enhanced additional paternity pay to men.
Since 2011 fathers have been able to take up to six months’ leave when the mother returns to work, known as Additional Paternity Leave (or APL). The earliest that a father can take Additional Paternity Leave is 20 weeks after the birth of the child and they must take the leave before the child’s first birthday.
If there is any unused maternity pay when the father’s leave starts he can benefit from this. In reality this would be a maximum of 19 weeks at the rate of £138.18 per week.
In the case in question Ford Motor Company Ltd were the Employer and they operated a maternity policy which gave women on maternity leave full pay for up to 52 weeks.
For Additional Paternity Leave they only paid fathers the statutory rate.
Mr Shuter, an employee of Ford Motor Company Limited took 20 weeks of Additional Paternity Leave and was paid statutory pay. As a result he submitted claims to the Employment Tribunal for direct and indirect sex discrimination. He argued that the difference in treatment between him and a mother on maternity leave meant that was paid around £18,000 less for an equivalent period of leave.
Mr Shuter compared himself with a female employee on maternity leave, who would have been entitled to full pay throughout.
He also argued that the introduction of Additional Paternity Leave reflected Parliament’s view that, after 20 weeks, maternity leave is aimed at facilitating childcare, which can be undertaken by either parent.
The tribunal decided that there was no direct discrimination in Ford’s decision to pay Mr Shuter only statutory pay. They considered that the comparison that Mr Shuter was making was incorrect and that a woman who had also applied for Additional Paternity Leave would have been treated no differently.
The tribunal also rejected Mr Shuter’s argument that he could compare himself with a mother on maternity leave 20 weeks after the birth of the child. There is a clear and material difference between a mother and father on leave.
They did however decide that the policy to pay differently was indirect discrimination, however Ford Motor Company were able to rely on the defence of objective justification. They stated that it could be justified by the need to recruit and retain female staff in what is a male-dominated workforce.
In addition to their decision about Mr Shuter’s arguments the tribunal also went on to note that if it had found that there were a relevant difference in treatment, it would have held that it fell within provisions of the Equality Act 2010, which allow for more favourable treatment in connection with preserving the health and safety of the mother following pregnancy.
Points to Note
The policy of paying full pay to a woman on maternity leave would be a relevant ‘provision, criterion or practice’ for the purpose of the Equality Act 2010 and if it places a relevant group at a disadvantage (in this case fathers) it would be indirect discrimination.
In this case Ford Motor Company were able to justify their policy and show that it was a proportionate means of achieving a legitimate aim, i.e. to encourage more women to work for them.
For your business this means that you should consider whether you have any such policy or procedure which would place fathers at a disadvantage, and if it cannot be objectively justified it is likely that it would be discrimination.
Offering staff enhanced maternity/paternity pay can be a good incentive to encourage parents to return to work after a period of leave. Thereby ensuring that you retain experienced and talented staff, and giving you a degree of certainty about staff levels and recruitment needs.
However, this will only be of benefit if you include a clause in the Employment Contract which states that in the event the employee does not return to work after their maternity/paternity leave they will have to repay some or all of the enhanced pay. Otherwise you will lose the benefits of actually providing the enhanced pay in the first place.