Employment Insight: Shared parental pay: who will bear the cost of sharing the care?

Shared Parental Leave (referred to as “SPL”) was introduced in 2015 to offer a more flexible way for parents to take leave from work during the year after the birth of their child. However, three years on the take up of SPL remains extremely low and accordingly has a relatively modest impact on society. For many parents, the key deterrent remains the stark differential between their employers’ enhanced maternity pay package compared to the shared parental pay on offer.


When SPL was introduced there was much debate about whether employers with enhanced maternity packages would be obliged to match those benefits for anyone taking SPL. From a legal perspective, the central question is whether an employer that enhances maternity pay is discriminating directly or indirectly against men if it fails to similarly enhance shared parental pay. Albeit slower than many had anticipated, a trickle of cases are now working their way up the appeal system and the courts are starting to grapple with these issues.

In Capita Customer Management Ltd v Ali and another[1] the Employment Appeal Tribunal (“EAT”) held that – on the particular facts and overturning the Tribunal’s decision – a failure to pay a male employee enhanced shared parental pay was not direct sex discrimination. This was on the basis that the purpose of shared parental leave is different to maternity leave. Indeed, the policy aim of SPL was to encourage parents to share parental responsibilities; the EU directive which underpins SPL focuses on the care of the child and makes no provision for pay. In contrast, the EU directive in respect of maternity leave and pay underscores that the objective is the health and wellbeing of pregnant women and birth mothers. This led the EAT to find in this case that a father taking SPL was therefore not in a comparable situation to a mother taking maternity leave. A woman on SPL would have been the correct comparator.

However, what has not yet been tested or identified by the courts is whether there is a point – during the 52-week maternity leave period – at which it can be said that the purpose of maternity leave shifts from biological recovery following childbirth and the special bonding period, to childcare that can be undertaken by either parent. Indeed, the case law reminds us that pregnant employees and those on maternity leave should only be treated more favourably than male colleagues to the extent that this is reasonably necessary to remove the disadvantages occasioned by their condition; the special treatment rule does not allow for blanket special treatment (Eversheds Legal Services Ltd v De Belin[2]).

Where does this leave indirect sex discrimination? Where an employer pays enhanced pay only to women on maternity leave is it applying a provision, criterion or practice (“PCP”) with which all men and some women cannot comply, and therefore (subject to any justification) indirectly discriminating against men?

Under the pre-SPL regime of “additional paternity leave” Ford (in the case of Shuter v Ford Motor Company Ltd[3]) successfully argued that its failure to pay male employees enhanced additional paternity pay was not indirect discrimination. On the particular facts, the Tribunal found that Ford had a legitimate aim of attempting to recruit and retain women in a male-dominated workplace. Had absolute equality been required, Ford would have probably have reduced its maternity pay; and consequently undermined its objective of increasing the number and status of women in its workforce.

In the recent case of Hextall v Chief Constable of Leicestershire Police and another[4], the EAT found that the Tribunal had erred in its approach to indirect discrimination, clarified the PCP and the particular disadvantage, and remitted the case to a fresh Tribunal. The issue which the Tribunal will now have to tackle is whether the rate of SPL (which is applicable to both men and women) had a disparate impact on fathers as they have no other choice in their choice of paid leave and are or would be deterred from taking leave. The relevant pool will be those employees with a present or future interest in taking leave to care for their new born child and those who have no interest in taking such leave will be excluded from the pool.

Looking forward, it is unclear whether the disparity and tension between maternity pay and shared parental pay is sustainable as a matter of law or under public scrutiny. Whilst the impact of SPL has so far been relatively modest, the position is not static and employers will need to keep their practices under regular review. Whether the law will require more of employers to encourage parents to share parental responsibility remains to be seen but will be under scrutiny as the cases progress through the courts. Alternatively, public opinion may well be a catalyst for further change.

[1] UKEAT/0161/17/BA; EAT judgment handed down in April 2018

[2] [2011] IRLR 448, EAT

[3] ET/3203504/13

[4] UKEAT/0139/17, Judgment delivered in May 2018

This information is necessarily of a general nature and doesn’t constitute legal advice. This is not a substitute for formal legal advice, given in the context of full information under an engagement with Bates Wells.

All content on this page is correct as of June 12, 2018.