Irwin Mitchell’s Employment Team Advises Capita In Significant Case

The Court of Appeal has today handed down its judgment in the cases of Ali v Capita and Hextall v Chief Constable of Leicestershire Police.

It ruled that employers that enhance maternity pay do not discriminate against those employees taking shared parental leave paid at lower or statutory rates. 

In Ali, women were entitled to maternity pay of up to 39 weeks, with the first 14 weeks paid at full pay followed by 25 weeks of lower rate statutory maternity pay. Parents taking shared parental leave received statutory shared parental pay only. 

In Hextall, the Police operated a similar policy – women were entitled to 18 weeks full pay followed by 39 weeks of statutory maternity pay whilst those on shared parental leave were only paid at statutory rates. 

The Court said there was ‘nothing unusual’ about their policies. 

Despite the similarity of the claims, they were pleaded differently in the appeal courts. Mr Ali argued that paying him less than a woman amounted to direct discrimination. Mr Hextall argued that the policy of paying women on maternity leave more than those on shared parental leave indirectly discriminated against men.

In a clear and unanimous judgment, the Court of Appeal rejected both claims. 

Mr Ali tried to persuade the Court that only the first two weeks of compulsory maternity leave are necessary to protect a mother following childbirth and, after that, remaining on maternity leave (rather than switching to shared parental leave) is a ‘choice’ about providing care. He argued that times had changed and that there shouldn’t be a financial incentive for the birth mother to stay at home and that the mother and father should both have same benefits when taking leave to care for the child.

The Court said these arguments amounted to an ‘attack against the whole statutory scheme’ under which special treatment is given to women on maternity leave and that the ‘entire period of maternity leave, following childbirth, is for more than facilitating childcare’. In particular, it helps women prepare and cope with the later stages of pregnancy, recuperate from giving birth, bond with their child, breastfeed and care for their new born. By contrast, shared parental leave was predominately about childcare.

The Court did not set a date when, it said, the purpose of maternity leave ‘transitioned’ into one that focussed on caring for the child rather than the mother’s health – but indicated this would be at least 14 weeks (and possibly longer if the woman was still breastfeeding for the recommended six month period).  Work-life balance organisation, Working Families, intervened in the case and argued that 26 weeks might be appropriate. That issue, remains unresolved.

The legal arguments in Hextall were more complicated. The Police argued that Mr Hextall had incorrectly pleaded his claim and that his complaint was, in fact, about inequality of terms (equal pay). The Equality Act incorporates a sex equality clause in all contracts of employment where an individual does work that is equal to the work done by a comparator of the opposite sex. This means that men and women should be paid at the same rates for doing the same job. Mr Hextall argued that the sex equality clause should modify his terms of work by including a corresponding term giving him leave and pay at the same rates as a police officer taking maternity leave.

The Court agreed that this issue was about inequality of terms rather than one of indirect discrimination but said  that Mr Hextall could not have been successful with that type of claim anyway, because the law allows employers to make exceptions to women who are pregnant, have recently given birth or whom are breastfeeding. An equal pay claim would therefore have failed. 

The Court confirmed that a claim can only be about equal terms or direct/indirect discrimination claim – it can’t be both.  Mr Hextall couldn’t therefore pursue an indirect discrimination claim. In any event, even if he could, the Court did not find that the indirect discrimination claim was valid for much the same reasons as Mr Ali’s claim failed – shared parental leave is not comparable with maternity leave. 

Jenny Arrowsmith, Employment Partner at law firm Irwin Mitchell who acts for Capita, comments: 

Expert Opinion

“The Court made it clear that that there is no room for a direct, indirect or equal pay claim arising from paying women on maternity leave more than parents on shared parental leave. My client was correct to resist this claim. Its policies were similar to those of many other employers. Parliament has made a statutory exception which gives special treatment to a woman in connection with pregnancy or childbirth. That special treatment is, by definition, not available to anyone other than a birth mother, which means the partners of birth mothers are not discriminated against if they do not receive enhanced benefits for taking leave to care for their newborn.

“This decision will be welcomed by employers that pay higher rates to women on maternity leave than to parents on different types of family leave. It’s also good news for women. Had the decision gone the other way, employers may have reduced their maternity pay to statutory rates because they could not afford to equalise pay rates to those taking shared parental leave – something Working Parents acknowledged in their submissions.”
Jenny Arrowsmith - Partner