Just three weeks ago, we reported on the Employment Appeal Tribunal's decision in Capita Customer Management Ltd v Ali and another, where it was held that paying a man on shared parental leave less than a woman on maternity leave did not amount to direct sex discrimination. We now have the decision of the Employment Appeal Tribunal in Hextall v Chief Constable of Leicestershire Police and another (UKEAT/0139/17) on whether this amounts to indirect sex discrimination.
Section 19 of the Equality Act 2010 deals with indirect discrimination and states:
"(1) A person (A) discriminates against another (B) if A applies to B a provision, criterion or practice which is discriminatory in relation to a relevant protected characteristic of B's.
(2) For the purposes of subsection (1), a provision, criterion or practice is discriminatory in relation to a relevant protected characteristic of B's if-
(a) A applies, or would apply, it to persons with whom B does not share the characteristic.
(b) it puts, or would put, persons with whom B shares the characteristic at a particular disadvantage when compared with persons with whom B does not share it,
(c) it puts, or would put, B at that disadvantage, and
(d) A cannot show it to be a proportionate means of achieving a legitimate aim."
The relevant protected characteristic in this case was the claimant's sex.
Mr Hextall was a police constable with Leicestershire Police (LP). His wife ran her own business. She gave birth to their second child on 29 April 2015. Mr Hextall took shared parental leave from 1 June to 6 September 2015 and received statutory shared parental pay. If he had been a female police constable on maternity leave, he would have been entitled to full pay for 18 weeks.
Mr Hextall complained about the practice of paying male employees on shared parental leave statutory shared parental pay, where women on maternity leave were entitled to full pay for 18 weeks. He claimed that the only option for men was to take shared parental leave at the statutory rate of pay, whereas women could choose to take maternity leave on full pay. He brought claims in the employment tribunal (ET) for direct and indirect sex discrimination. In support of his claim for indirect sex discrimination, Mr Hextall relied on a provision, criterion or practice (PCP) of paying only the statutory rate of pay for those taking shared parental leave. He argued that the disadvantage suffered by men as a result of the application of the PCP was that it was more difficult for them to take shared parental leave than to stay at work.
LP claimed that this was an equal pay claim.
Employment tribunal decision
The ET held that the claim was one of discrimination and not equal pay but dismissed Mr Hextall's claims. In relation to direct discrimination, the ET rejected his argument that women on maternity leave were valid comparators for men on shared parental leave, and found that the correct comparator was a woman on shared parental leave. The ET then applied this finding in rejecting Mr Hextall's indirect sex discrimination claim. It also held that the PCP did not put men at a particular disadvantage when compared with women because both men and women received the same amount of shared parental pay.
Mr Hextall appealed to the Employment Appeal Tribunal (EAT) in relation to the finding on indirect sex discrimination. LP cross-appealed the decision that the claim was one of discrimination and not equal pay.
Employment Appeal Tribunal decision
In a very technical judgment, the EAT dealt with the cross-appeal first and dismissed it, agreeing with the ET that this was a discrimination claim.
It then went on to consider the appeal. The EAT held that the ET had been wrong to apply the comparator test to the indirect sex discrimination claim. The ET should have looked at the appropriate pool for testing whether the PCP disproportionately disadvantaged men. The ET had also made an error by failing to identify clearly the particular disadvantage to which men were put. The EAT also held that the ET had erred when it held that the PCP (paying only the statutory rate to those taking shared parental leave) did not put men at a particular disadvantage on the basis that men and women on shared parental leave were entitled to the same amount of pay.
The EAT therefore allowed the appeal and set aside the dismissal of the claim of indirect sex discrimination. It remitted the claim of indirect sex discrimination to a new ET for a rehearing.
The claim will now go back to a different ET for it to look at again and it may be some time before we know the outcome - assuming the claim is not settled before the hearing.
For the time being, the question of whether failing to enhance shared parental pay amounts to indirect sex discrimination therefore remains unanswered. When the case returns to the ET, it may find that LP's policy constituted indirect sex discrimination but Mr Hextall's claim will fail if LP can objectively justify it as a proportionate means of meeting a legitimate aim (other than saving costs) by successfully arguing that enhancing maternity pay aids recruitment of women, promotes loyalty and encourages women to return after maternity leave.
As the issue of justification depends on the facts of the case, an ET could come to a different conclusion in relation to an employer with a different demographic (eg equal numbers of men and women, or more women than men).
Employers will no doubt be hoping for further clarity, and those that can afford to do so may wish to consider enhancing shared parental pay to encourage fathers to take shared parental leave and to send out a strong message about their commitment to gender equality.