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Shared parental pay – where are we, and where are we heading?


In April the TUC announced that a mere 1% of new parents eligible to take shared parental leave are using it. A major reason cited for fathers not taking shared parental leave is affordability; on average, fathers tend to earn more than mothers, and so, for many couples, it would be financially punitive for the father to take shared parental leave. This is because the statutory pay for taking shared parental leave is subject to a weekly cap of £148.68 and, further because most employers that offer enhanced maternity pay do not similarly enhance shared parental pay which, again, acts as a financial disincentive for fathers to take shared parental leave.

Some employers are now taking steps to try and address the financial disincentive for fathers by voluntarily offering enhanced shared parental pay. For example, accountancy firm Deloitte offer 16 weeks’ full pay, followed by 10 weeks’ half pay (equivalent to their enhanced maternity and adoption pay offering), whilst Virgin offers (subject to length of service) a remarkable 52 weeks of full pay for parents of either sex including adopters. The key factor for employers in determining whether to offer enhanced shared parental pay is the cost and impact on the business, so employers may wish to assess the likely take-up by employees and the cost of this.

There have been calls (and attempts) to compel employers to equalise rates of maternity and shared parental pay. In the recent cases of Ali v Capita Management Ltd; and Hextall v Chief Constable of Leicestershire Police, the Court of Appeal was asked to determine whether the practice of paying enhanced maternity pay to women, but not offering enhanced shared parental pay, amounts to sex discrimination against men.

In Ali, the court determined that the purpose of maternity leave is fundamentally different to that of shared parental leave, in that the former is afforded to new mothers in order to help them recover from the psychological and physical effects of pregnancy and childbirth, whereas the purpose of the latter is exclusively childcare. Accordingly, the court reasoned, offering enhanced maternity but not shared parental pay cannot be directly discriminatory against men.

In Hextall, the employee argued that this practice was a breach of provisions in the Equality Act which require that men and women are afforded equally favourable contractual terms. The court rejected this argument, citing the exception in the Equality Act which allows for special treatment of women in connection with pregnancy and childbirth. The court also rejected an argument that the practice in question was indirectly discriminatory, again on the basis that a woman on maternity leave could not be validly compared with a man on shared parental leave (for reasons similar to those discussed above).

Whilst these decisions are being appealed to the Supreme Court, most commentators do not see much prospect of them being overturned. Of course, it remains open to the government to change the law and compel employers to equalise these rates of pay but it is very unlikely that the government will do so as this would disadvantage employers who choose to voluntarily offer more than the statutory pay for family friendly leave. Any change, therefore, may arise from the government introducing other measures designed to increase parity between the sexes in respect of childcare in the future.

In terms of what steps might be taken, Sweden is an oft cited example of a country with a progressive parental leave regime. Eligible parents can share a total of 480 days’ parental leave (compared to 350 in the UK), 390 of which are paid at 80% of salary (up to a maximum salary cap of approximately £40,000), compared with a flat rate of £148.68 per week in the UK. In addition, 90 of the 480 days are specifically reserved for each parent; whereas in the UK a couple can choose not to take shared parental leave at all (meaning the mother simply remains on maternity leave).

Unsurprisingly, with the government increasingly preoccupied by Brexit, the current legislative agenda is sparse, and so the prospect of similar steps being taken to address this issue in the UK in the near future are perhaps remote. However, given the current degree of attention on pay equality, the government may come under increasing pressure to act.

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