Shared parental leave, and in particular enhanced pay during shared parental leave, has come under the spotlight again in a recent EAT decision: Price v. Powys County Council.
by Elouisa Crichton
Elouisa specializes in employment and discrimination law and is Counsel in Dentons’ Glasgow office. elouisa.crichton@dentons.com
What is shared parental leave?
Shared parental leave is a statutory scheme which allows parents to take leave in the year after their child is born or adopted. Introduced in 2014 as the successor to additional paternity leave, it is unique in many ways.
Firstly, it is not a stand-alone entitlement. Parents only qualify if they and their partner meet certain employment and earnings limits. In simple terms, if your partner does not work, you may find that shared parental leave is not available to you.
Secondly, up to 50 weeks of shared parental leave is available, but to access it, you need to “borrow” the time from the maternity or adoption leave entitlement. This has been one of the key challenges in the uptake of the scheme. Many who might have used a period of shared parental leave have been reluctant to take time off because doing so shortens the leave available to their partner.
Thirdly, it is really flexible. Parents can take separate blocks of time off, interspersed with time at work. There are rules around giving notice and, importantly, each period of leave must be in units of full weeks.
There are also 20 keeping-in-touch days available during shared parental leave. This suits many wanting to balance childcare and work and has been a key reason why some mothers opt to move from the more rigid maternity leave regime onto shared parental leave.
However, unlike maternity and adoption leave, shared parental leave cannot be taken prior to childbirth or placement for adoption.
Finally, the focus of this claim, and other similar ones, was on how much employees should be paid during shared parental leave. The statutory rules only provide for a flat rate of pay, with no entitlement to the enhanced 90% of pay for the first six weeks as is the case in maternity and adoption leave.
Do employers need to mirror enhanced maternity pay/adoption pay for those on shared parental leave?
Where employers choose to offer enhanced pay during maternity and/or adoption leave, the challenging issue for them and the tribunal has been whether or not they need to mirror that enhancement for those on shared parental leave. And, if they choose not to, could that amount to discrimination on the basis of sex?
In Price v. Powys County Council, the EAT said that it would not. An employer was entitled to pay a male employee on shared parental leave a lower rate of pay compared to a female employee on adoption leave.
The Council offered enhanced maternity/adoption pay, but paid only statutory shared parental pay. Mr Price took shared parental leave. As a result of not qualifying for the enhanced rate of pay, he brought a claim for direct discrimination.
It was held that there were material differences between shared parental leave and maternity/adoption leave. Accordingly, the correct comparator for Mr Price was a female employee on shared parental leave, not one on adoption leave. As a female employee would receive the same pay on shared parental leave, there was no direct discrimination. This accords with previous cases in which it has been held that such pay differences are not indirect discrimination.
What does this mean for employers?
The decision in Price v. Powys County Council supports previous decisions that it is acceptable to enhance maternity/adoption pay, while only paying the statutory rate during shared parental leave. Employers should still take care and consider whether having such a policy is beneficial in the long run for their company. As we navigate our way out of this pandemic where childcare has been juggled between working parents, having a policy that financially discourages partners from taking on more childcare responsibilities may not fit with flexible and modern family culture.
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