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Pay for Shared Parental Leave

Posted by TonyBrownEmploymentSolicitor on November 10, 2014

On 1 December, Shared Parental Leave will be introduced for parents of babies due (or children placed for adoption) from 5 April 2015 and will replace Additional Paternity Leave.

Under the new system, a mother can choose to take less than her statutory entitlement of 52 weeks of maternity leave and convert the untaken weeks into shared parental leave. She can then share the leave and pay with her working partner. 

However, the level at which Shared Parental Leave is paid remains a big issue.

Although the legislation provides that Shared Parental Pay should be a flat weekly rate of £138.18 or 90% of basic salary, if this is lower, employers are wary of potential sex discrimination claims if they do not pay men taking parental leave at the same rate they pay to female employees on maternity leave. 

Employers who choose to pay Shared Parental Leave at a lower rate than their enhanced maternity scheme may draw some comfort from a recent employment tribunal decision which ruled that an employer was justified in paying men on Additional Paternity Leave the statutory minimum, even though it offered women on maternity leave generous enhanced pay. 

Although this case related to additional paternity leave the principles considered are similar to those which should apply to Shared Parental Leave.

The Claimant in that case argued that he had suffered sex discrimination as a result of his employer’s policy of paying his additional paternity leave at the statutory minimum rate. By contrast a woman on maternity leave would be entitled to her full basic pay for 52 weeks under the employer’s enhanced maternity policy. The employer conceded that its policy of paying full pay to women on maternity leave was indirectly discriminatory against men but argued that its policy was justified. 

The tribunal accepted the employer’s evidence that its enhanced maternity policy was introduced with the purpose of attracting and retaining female staff who were significantly under-represented in its workforce. The employer showed that it had succeeded in increasing the number of female employees since the introduction of its enhanced maternity pay policy. 

This decision might be helpful for employers who intend to pay Shared Parental Leave at a lower rate than their maternity scheme. However, in the reported case the employer was able to provide detailed evidence to justify its approach. Employers should be prepared to demonstrate the purpose of their enhanced maternity pay policy and its effectiveness in achieving that purpose. It may not be sufficient for the employer to argue that it is unable to carry the cost of enhancing shared parental pay in line with enhanced maternity pay.