Shared Parental Leave

The new law on Shared Parental Leave takes effect on 5 April 2015 and applies to qualifying parents of babies due on or after 5 April 2015.

Shared Parental Leave (“SPL”) is available to new mums and dads. New mums will have the choice whether to stick with maternity leave in which case mum only will be entitled to up to 52 weeks’ leave; or mum can opt instead for new SPL which enables dad to share the leave with her. Mum and dad can take the leave separately or at the same time.

Employers are used to the fact that mothers are entitled to statutory maternity pay whilst on maternity leave and some employers pay new mums over and above statutory maternity pay (enhanced pay).

If your business currently offers enhanced pay to employees, will you now have to offer enhanced pay for new mums and dads on shared parental leave?

If you decide to offer enhanced SPL pay at all, it should be offered equally to mums and dads on SPL, otherwise you risk a claim for direct sex discrimination. However, could you lawfully offer both mums and dads on SPL a lower rate of pay than you offer women on maternity leave?

While such a policy would likely not be directly discriminatory on the grounds of sex, it may still amount to indirect sex discrimination against men, on the grounds that it is a policy which puts men at a particular disadvantage as compared with women, who can also choose to take ML (Remember it is mum who decides whether or not swap her right to ML for SPL instead. Dad has no choice in the matter). However, even if men are disadvantaged there would be no unlawful discrimination if you can demonstrate that your policy can be objectively justified, as a proportionate means of achieving a legitimate aim.

Given the newness of the SPL regulations, this question has not yet been tested in the tribunals, but the 2013 Employment Tribunal case of Shuter v Ford Motor Company may serve as a guide in this case. Mr Shuter, a male employee of Ford claimed that his employer’s policy of offering enhanced ML pay to mothers, while paying men taking Additional Paternity Leave at the statutory rate, was both directly and indirectly discriminatory against men.
The Tribunal found in favour of Ford, dismissing Mr Shuter’s claims.

Interestingly the Tribunal held that Ford’s policy was lawful because although it put men at a disadvantage, it could be justified as proportionate means of achieving a legitimate aim. Ford’s workforce was predominantly male, and its objective in offering generous enhanced ML pay was to recruit and retain more women, which constituted a legitimate aim. Ford also satisfied the tribunal that it had successfully achieved this aim by attracting and retaining more female employees over the years, evidencing that its means were proportionate to its aim.

The particular facts of Shuter concerned a workforce which was very male dominated, and Ford was able to demonstrate that its policy worked. These facts will not apply to every business, and so if you decide to operate differential rates of pay during ML and SPL, you should consider carefully what your aim in doing so is and how you can justify it if challenged and make sure your aims are documented in your new Parental Leave policy. Remember, the potential increase in the cost to the business of offering enhanced pay to dads as well as mums for the best part of one year’s leave will not in itself constitute an objective justification to a claim for indirect discrimination.

All businesses should now be budgeting for the cost for this new legislation. If you are operating in a highly competitive marketplace, you may find that candidates for jobs will be asking to view your parental leave policies before accepting an offer of employment. This legislation will mean that parents contemplating sharing childcare responsibilities will wish to see that their respective employers’ policies are compatible. This policy may become an important recruitment tool to businesses in attracting new talent. Policies can be tailored to the particular needs of the business since employers can stipulate whether or not they will be open to applications for parental leave from parents who wish to dip in and out of work during the leave period rather than take up to three periods of continuous leave.

For advice on any aspects of Maternity, Paternity or Shared Parental Leave contact the Hamlins Employment Team.