Failure to enhance Adoption Leave Pay not discriminatory

Back in 2019, we updated you on the Court of Appeal’s decision in Capita & Hextall which held that employers were not required to equalise enhanced maternity pay with parental leave pay.

A similar question has recently been considered by the Employment Appeal Tribunal (EAT), in a case called Price v Powys County Council.  However, in this case, the question related to an employer’s policy of enhancing adoption leave pay, but not shared parental leave pay. Would a failure to equalise these benefits amount to sex discrimination?

Facts

Mr Price was employed by Powys County Council and applied for shared parental leave. He did not proceed with his application when the Council confirmed he would only be paid statutory shared parental leave pay, which is equivalent to statutory maternity pay.

The Council operated enhanced maternity and adoption leave pay for employees. This led Mr Price to bring a claim for direct sex discrimination.

However, an employment tribunal found that Mr Price was not entitled to compare maternity leave or adoption leave with shared parental leave.

Mr Price accepted the employment tribunal’s decision on maternity pay, but appealed its decision on adoption leave pay.

Mr Price argued that men on adoption leave are entitled to compare themselves with women on maternity leave – he argued that this is the same ‘category’ of leave and any differential in pay would, therefore, be discriminatory on the grounds of sex.

Decision

The EAT reviewed Mr Price’s grounds of appeal and referred to health and safety concerns and the Adoption and Children Act 2006, which outlines the purpose of statutory adoption leave. The EAT found that the purpose goes far beyond that of childcare and included matters such as creating a safe environment for the child and the forming of a parental bond.

The EAT concluded that adoption leave and shared parental leave do not hold the same purpose: shared parental leave aims to provide parents with more choice regarding childcare. It was held that there were material differences between the two types of leave – meaning that they were not comparable for the purpose of a sex discrimination claim.

The EAT considered five material points of comparison between the position of a man on shared parental leave and the position of a woman on statutory adoption leave.

1. Neither adoption leave nor shared parental leave have any compulsory period of leave (unlike maternity leave, which has a compulsory two or four week period, depending on the type of employment).
2. The purpose of shared parental leave is to facilitate childcare; and this is substantially different from the core purpose of statutory adoption leave.
3. Statutory adoption leave is an immediate entitlement upon placement; whereas shared parental leave can commence at any stage during the first year of a child’s birth or adoption.
4. Mr Price argued that, similarly to shared parental leave, a female adopter and her partner must also agree who will be the “adopter” who is entitled to take the leave. However, the EAT disagreed because the nomination of an “adopter” takes place before the entitlement to take adoption leave arises – at that point, there is no leave entitlement to transfer to a partner. 
5. Shared parental leave is flexible as to when the leave is taken, which is consistent with the purpose of giving parents greater childcare options; whereas adoption leave (and maternity leave) must be taken in continuous periods of time.

The EAT concluded that a woman on statutory adoption leave was not an appropriate comparator to a man on shared parental leave. It was held that the correct comparator was a woman on shared parental leave. Given that a woman on shared parental leave would be on the same pay as a man under the employer’s policy, there was no sex discrimination. 

Comment

This decision focuses on the material differences between adoption leave and shared parental leave: the EAT has followed the Court of Appeal’s line of reasoning in the Capita and Ali cases and found that the two types of leave are fundamentally different.  The main difference is that adoption leave focuses on creating a safe environment for the child and forming a parental bond; as opposed to shared parental leave, which is focussed on facilitating childcare.

Because the two different types of leave are materially different, different treatment for employees on each type of leave cannot be discriminatory.

This will, no doubt, be a comfort for employers who pay employees more during adoption leave than during shared parental leave; there is currently no legal requirement to re-visit such policies (although this decision could be appealed).

From a practical point of view, however, take up of shared parental leave amongst male employees is likely to lag behind women taking maternity or adoption leave, if there is a differential in pay. 

Contributors: Katie Barclay and Sarah Maddock

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at April 2021. Specific advice should be sought for specific cases. For more information see our terms & conditions.