26th April 2022

Is offering enhanced payment schemes for mothers on maternity leave discriminatory?

Background

It is a common practice amongst employers, particularly those seeking to implement measures to improve employee retention, or to make themselves more attractive to prospective employees more generally, to offer enhanced payment schemes to mothers on maternity leave.

Currently, employees on maternity leave have a statutory entitlement to receive 39 weeks pay at 90% of their average weekly earnings or £156.66 per week for the final 33 weeks (whichever is lower). Employers may take the view however, that such an arrangement is not sufficient in order to satisfy the employee’s financial needs and concerns whilst they care for a new-born baby. Employers may therefore choose to provide contractual enhancements to be paid alongside or in place of the employee’s minimum statutory entitlements.

Discrimination

An issue that often arises when employers offer enhanced maternity pay arrangements, is whether they are then obliged to offer enhanced payment arrangements for other types of paid leave in order to avoid potential discrimination.

The Equality Act 2010 (“the 2010 Act”) provides employees with a right not to suffer less favourable treatment on the basis of certain “protected characteristics”. One such protected characteristic is sex. Therefore, if an employee is subject to less favourable treatment because of, or as a result of their sex, the employee can bring a claim for direct discrimination against their employer under section 13 of the 2010 Act.

A Case Study

This was exactly the point at issue in the case of Ali v Capita Customer Management Ltd. In this case, a male employee on shared parental leave (SPL) receiving minimum statutory SPL entitlements, claimed he was being discriminated against as a result of his employer offering enhanced pay arrangements to employees on maternity leave. As a result of Mr Ali not receiving an enhanced payment arrangement whilst he was on SPL, he alleged that this was less favourable treatment on the basis that he was a man (i.e. sex).

The court held in this instance that there was no discrimination. Whilst he was no doubt suffering less favourable treatment than a woman on an enhanced maternity arrangement, a woman on maternity leave was not an appropriate comparator for Mr Ali to demonstrate such less favourable treatment. This was because the circumstances of the parties were materially different, maternity leave being geared towards the mother’s recovery from childbirth as much as it was the care of the child itself. The court were clear that the correct comparator in Mr Ali’s case was a female colleague taking SPL, not a female colleague on maternity leave. Since a woman on SPL would receive the same pay as a man on SPL, there was no sex discrimination.

In general therefore, offering enhanced payment arrangements for certain types of paid leave is entirely at an employer’s discretion. Employers ought to bear in mind however, that with the offer of enhanced payment to mothers or fathers in isolation, comes the possibility for sex discrimination claims by employees on statutory minimum pay arrangements.

If you want further advice about whether to offer enhanced benefits for employees, then you can get in contact with the Blackadders’ Employment Team who have offices in Glasgow, Dundee, Edinburgh, Perth and Aberdeen.

Ethan Laing, Trainee Solicitor
Employment
Blackadders LLP

www.blackadders.co.uk

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