Update
Since we published the blog below, we have also published 'We enhance maternity pay; do we need to enhance shared parental pay?' which updates our advice in line with new case law.
Some employers have been concerned that failing to offer enhanced shared parental pay (where they offer enhanced maternity pay) could lead to discrimination claims.
As the first tribunal decision on shared parental pay, the case of Snell v Network Rail has attracted significant media interest.
But the facts of the case have been widely misreported: here we set the record straight and answer employers' key questions.
Shared parental leave and pay - the basics
Shared parental leave allows parents to share leave from work following a birth or adoption.
A mother can reduce her 52-week maternity leave to create weeks of shared parental leave that can be taken by the mother and / or her partner. So, if a mother takes 30 weeks' maternity leave, a maximum 22 weeks' shared parental leave will be available.
Likewise, a mother can reduce her 39-week maternity pay period, creating weeks of statutory shared parental pay that can be claimed by her and / or her partner. If she claims 30 weeks' maternity pay, a maximum 9 weeks' statutory shared parental pay will be available.
Mr and Mrs Snell request shared parental leave
Both Mr and Mrs Snell worked for the Network Rail.
Mrs Snell intended to take 27 weeks' shared parental leave, with Mr Snell then taking 12 weeks' shared parental leave (which he later increased to 24 weeks).
It is not clear why Mrs Snell opted for shared parental leave, rather than maternity leave.
Network Rail's policy
Network Rail's policy provided that mothers on shared parental leave would receive:
- A maximum 26 weeks' full pay (reduced by any enhanced maternity pay received)
- Up to a further 13 weeks' statutory pay (currently £139.58)
- Up to a further 13 weeks unpaid.
In contrast, fathers or partners on shared parental leave were only entitled to a maximum 39 weeks' statutory pay (£139.58) followed by up to 13 weeks unpaid.
Discrimination?
Mr Snell alleged that that the policy was discriminatory on grounds of sex, as mothers taking shared parental leave would be paid more than fathers.
Network Rail contested this in their response to Mr Snell's grievance, arguing that:
- It was justified in paying enhanced shared parental pay to mothers only, in an effort to recruit and retain female employees in a male-dominated industry.
- A female partner of a mother would have been treated in the same way as the claimant i.e. would only have received statutory pay.
Mr Snell raised a tribunal claim, but the tribunal did not have to decide whether the policy was discriminatory or consider these arguments on justification, as Network Rail decided not to contest the indirect discrimination claim at the tribunal.
Compensation
The tribunal hearing was only concerned with the level of compensation due to Mr Snell, and awarded him around £25,000. The bulk of this was to compensate Mr Snell for receiving statutory rather than full pay during his 24 weeks'shared parental leave.
Network Rail objected to the level of compensation, arguing that by the time Mr Snell was due to take leave, it had changed its policy and equalised mothers' entitlement with that of fathers at the basic statutory level.
The tribunal didn't accept this: it found that the new policy made no provision for what should happen to outstanding requests under the old policy and, as such, the old policy still applied to Mr Snell's leave.
It is unclear why Network Rail did not argue that Mr Snell's compensation should be limited to 10 weeks' pay. Their policy stated that "parents are able to share up to 37 weeks of shared parental pay". As Mrs Snell appears to have claimed 27 weeks' pay, it was at least arguable that only a further 10 weeks' pay was available (rather than the 24 weeks awarded by the tribunal).
If we enhance a mother's shared parental pay, do we need to enhance this for fathers?
Network Rail conceded that their policy was discriminatory before the tribunal hearing, meaning the tribunal did not consider the arguments Network Rail originally made in defence of its policy.
The government guidance warns that "if an occupational scheme is offered to a mother on shared parental leave, it could constitute sex discrimination if such an occupational scheme were not offered to fathers/a mother's partner". We agree that there is a risk of discrimination if you offer enhanced shared parental pay to mothers only.
If we enhance maternity pay, do we need to enhance shared parental pay?
Some employers have been concerned that failing to offer enhanced shared parental pay (where they offer enhanced maternity pay) could lead to discrimination claims.
There is no case-law on this point as yet. Contrary to some media reports, Snell v Network Rail did not deal with disparities between maternity and shared parental pay and only concerned equal rights for mothers and fathers to enhanced shared parental pay.
The government guidance indicates that you don't need to provide enhanced shared parental pay just because you provide enhanced maternity pay; but this is not definitive and could be challenged in a tribunal.
If you offer enhanced maternity pay, but don't want to enhance shared parental pay, at least ensure that you document your reasoning on this, so that you can attempt to justify your decision if challenged. As the increased cost of providing such a benefit may not, of itself, provide sufficient justification, you should consider whether your approach has other legitimate aims, and whether it is a proportionate means of achieving these. If you want to discuss this, please get in touch.
What else do we need to think about if we are enhancing shared parental pay?
Enhanced shared parental pay schemes need to be drafted with care. Some particular points to look out for:
- The interaction with maternity and paternity pay entitlements, particularly any enhanced entitlements to these.
- Will you pay enhanced pay to both parents if they both work for you? Some schemes provide that if both parents are your employees, the enhanced entitlement (of say 26 weeks' full pay) will be shared between them.
- Will you specify that enhanced shared parental pay can only be claimed whilst an employee is also entitled to statutory shared parental pay? If you don't do this, the following scenario could arise:
- Your employee is a father. The mother has already claimed her full 39-weeks' maternity pay (from you or another employer).The father is not entitled to statutory shared parental pay (as the couple have used their full 39-week entitlement) but you will still need to pay him enhanced shared parental pay (assuming he is entitled to this under the other terms of your policy). You will not be able to recoup any portion of this from HMRC.
- You might be content to accept this outcome but, either way, you should ensure that your policy makes the position clear.
- As discussed above:
- You will be at risk of a discrimination claim if you enhance shared parental pay for mothers but not for fathers.
- It may be possible to offer different maternity vs shared parental rights but, given the discrimination risk, at least think about whether you can justify this.
More information
Users of Workbox, the employment team's online HR site,can access detailed information, an example policy and host of template letters and forms to help with the management of shared parental leave and pay in our Shared Parental Leave section.
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Practice Development Lawyer
