20 July, 2015
The new Shared Parental Leave provisions, which took effect on 5 April, allow working couples to share up to 50 weeks of leave and 37 weeks of pay (48 and 35 weeks respectively if the mother is a factory worker) following the birth or adoption of their child, the aim being to offer greater flexibility in how they care for their new arrival in their first year.
For employers, the new scheme presents a raft of transitional challenges and most will find that their existing family friendly policies will require updating.
An interesting predicament for employers which is emerging out of the changes is the question of how much to pay parents who wish to utilise their joint entitlement.
Currently many employers offer enhanced maternity pay packages which outstrip the statutory minimum. These employers will now face the decision as to whether to apply these enhanced benefits to shared parental leave, with its potential for payments over a longer period to eligible partners who were previously limited to additional paternity pay which could be no more than 13 weeks. In our experience so far a noticeable trend is yet to emerge - different employers are making different decisions depending on whether they enhance other payments.
There is no legal obligation under the new rules for the employer to equalise the enhancements, however the recent employment tribunal case of Shuter v Ford Motor Co. Ltd demonstrated the potential for discrimination claims to emerge.
The Shuter case involved a father who took 20 weeks of additional paternity leave and, in compliance with company policy, was paid at the statutory rate. He claimed that the policy directly and indirectly discriminated against him, drawing a comparison with a female employee on maternity leave, who would receive full pay for up to 52 weeks.
Although the tribunal rejected the claimant's arguments for direct discrimination, it did agree that the relevant provision and group disadvantage requirements had been established for indirect discrimination. The claim ultimately failed as the company's justification for enhanced maternity pay, to boost its female workforce, was deemed appropriate and proportionate. It also must be pointed out that this was first instance decision and is therefore not binding on future claims. Nonetheless, the case aptly demonstrates that those employers who choose to offer, for example, enhanced maternity, paternity, and adoption pay, but only statutory shared parental pay, could be subject to indirect discrimination claims that have some potential to succeed.
Employers will need to think carefully about the level of pay they are willing to offer employees who wish to take shared parental leave, particularly if they offer other enhanced packages. If they are unsure they should consider seeking legal advice before issuing their policy.
If you require further information or assistance, please do not hesitate to contact Ruth Rule-Mullen by email or on 01772 220195.