Care needed when drafting Family Friendly policies to ensure that an enhancement of pay to one group does not disadvantage another group.
Shared Parental leave (SPL) was a hot topic for 2015 but it's fair to say that take-up has been relatively low. Prior to the implementation of SPL, the government estimated that around 285,000 couples would be eligible for SPL and that the take-up would be between 2% and 8%.
The government itself is not tracking the take-up of SPL, although it will evaluate the policy in 2018, but recent research indicates that only 1.5% of eligible parents have taken SPL. In April 2016, the Women's Business Council and the employer support firm My Family Care published its research into SPL:
- 55% of mothers said they did not want to share their leave;
- 80% of employees said taking SPL would depend on finances and if their employer paid more than the statutory payment of £139.58 a week (but concerns over career progression was also a factor);
- 40% of employees said their employer encouraged them to take SPL;
- Of the 200 employers surveyed, fewer than 10% reported more than 1% take-up of SPL.
There appears to be a clear link between the take-up of SPL and an individual's finances and the recent Employment Tribunal decision in Snell v Network Rail Infrastructure Ltd illustrates the difficulties that can arise when a policy that enhances pay to one group has the effect of disadvantaging another group. In this case, Mr Snell was awarded more than £28,000 for indirect sex discrimination, because his wife, who also worked for Network Rail received full pay for 26 weeks while taking SPL and 13 weeks at the statutory Shared Parental Pay (ShPP) rate of £139.58 a week, whereas Mr Snell only received statutory ShPP when taking SPL.
Mr Snell had worked at Network Rail since March 2008 as a Signalling Principles Designer and his gross rate of pay was £811.65 a week and his wife's was £618.28. He and his wife were expecting a baby in early January 2016.
Under its Family Friendly policy, Network Rail provided:
- 52 weeks' SPL to be shared between the mothers/primary adopters/first surrogate parents and their partners
- ShPP of 26 weeks' full pay (inclusive of statutory ShPP, 13 weeks at the statutory ShPP rate and 13 weeks unpaid to mothers/primary adopters/first surrogates. Their partners on the other hand were entitled to 39 weeks of statutory ShPP only.
On 22 September 2015, Mr Snell raised a grievance with his manager about the policy on the basis that ShPP paid to mothers was at significantly different rates to fathers and he was being discriminated against because of his sex. He also argued that the policy was contrary to the government guidance, "Employers' Technical Guide to Shared Parental Leave and Pay". Mr Snell also referred to the Acas guidance,"Shared Parental Leave and Pay - a good practice guide for Employers and Employees." This states that there is no statutory requirement to mirror occupational maternity schemes when a shared parental leave scheme is established. However, it was important that within the scheme, men and women are "treated equally and paid the same rate in the same circumstances".
Network Rail's Grievance policy stated that certain steps needed to be taken within specified time limits. For example, that an acknowledgement of the grievance would be sent within 3 working days and a date for the hearing agreed within 7 working days of the grievance being submitted. Neither of those steps was complied with. On 23 October 2015, Mr Snell wrote to his manager saying that the delay in dealing with the grievance was causing him and his wife considerable stress and they were unable to finalise the care arrangements for their baby. The grievance hearing eventually took place on 5 November 2015. At a meeting on 5 January 2016, Mr Snell was told that his grievance was not upheld because, using the comparator of a female partner of a mother taking SPL, the female partner, like Mr Snell, would not be given enhanced pay. Mr Snell appealed that decision and also commenced Employment Tribunal proceedings for direct and indirect sex discrimination. His grievance appeal was dismissed on 11 March 2016.
Employment Tribunal proceedings
Initially, Network Rail contested the claim. It challenged the comparator identified by Mr Snell, that is, the mother or primary carer. It submitted that the appropriate comparator was a female partner. It also argued that if its policy was discriminatory, it could be justified as a proportionate means of achieving a legitimate aim, namely to recruit and retain women in a male-dominated workforce. Network Rail subsequently decided not to contest the claim of indirect sex discrimination and as Mr Snell withdrew his claim of direct sex discrimination the only issue for the Employment Tribunal to decide upon was the amount of compensation.
In terms of injury to feelings, the Employment Tribunal were asked to take into account the stress caused by the delay in dealing with Mr Snell's grievance and the fact that this was not a one-off incident. It awarded Mr Snell £5,000 (towards the top end of the lower band of the Vento guidelines).
As for future financial loss, Mr Snell had intended to take 24 weeks' SPL and the Employment Tribunal took into account his gross weekly rate of pay (£811.65) and deducted the amount of statutory ShPP resulting in a weekly loss of £627.07. His loss for the intended SPL period was assessed as £16,129.68.
The Employment Tribunal also ordered an uplift of 20% on the award for injury to feelings and future loss (applied to the net wages) for Network Rail's breach of the Acas Code of Practice on Disciplinary and Grievance procedures for the unreasonable delay in dealing with the grievance. It also took into account the size and resources of Network Rail for dealing with grievances of this type.
With additional sums ordered for pension loss, interest and reimbursement of the Employment Tribunal fees of £1,200, the total amount awarded to Mr Snell was £28,321.03.
Since the introduction of SPL there has been some doubt about an employer's position if it chooses to enhance Maternity Pay but not ShPP. The "Employers' Technical Guide to Shared Parental Leave and Pay" makes it clear that there is no legal requirement for companies to provide enhanced ShPP (as long as women and men on SPL were treated the same) and that they could continue to provide enhanced maternity pay schemes without enhancing ShPP. Case law however both from the EU and the UK suggests that there may be some problems with this approach and that it may give rise to claims for sex discrimination direct and indirect, depending on the particular circumstances. The issue remains unclear, since the Network Rail case involved a different rate for men and women on SPL, rather than a different rate between women on maternity leave and parents on SPL.
In Shuter v Ford Motor Company Ltd, Mr Shuter argued that failure to enhance additional paternity pay in the same way as maternity pay was indirect sex discrimination. Interestingly, in Shuter, Ford argued (successfully) the same justification point as Network Rail, that with a male-dominated workforce, the reason for enhancing maternity pay was to recruit and retain women in its workforce, although it is acknowledged that this will very much depend upon the industry and sector of the employer and cannot be relied upon as being a justification for all employers.
So what should employers do if they want to promote a positive family-friendly environment? They need to be careful when drafting Family Friendly policies to ensure that an enhancement of pay to one group does not disadvantage another group. One option is simply to specify that any enhancement of pay for taking SPL is for a specified period and is available to either parent rather than specifying different rates for mothers and fathers. However, the interplay with any existing enhanced maternity pay scheme would need to be carefully reviewed and there are potentially other risks of discrimination in different approaches to enhanced pay.
Network Rail's response to Mr Snell's discrimination claim was to introduce a new policy and "level down" the mother's entitlement to that of her partner, that is, limiting pay for women to statutory only, rather than enhancing the pay for men. This could be the least risky step to take but is a move that has attracted some criticism. Finally, don't forget that whilst implementing fair policies is in the employer's control, employers could also be liable for sex discrimination by their staff (vicarious liability) and must ensure that they have taken all reasonable steps to prevent discriminatory behaviour.
The decision clearly shows that training for HR, managers, and indeed all staff is also essential in dealing with requests for SPL, and Acas has produced some good guidance on this. Handling the process badly (which could even be through not understanding the details of SPL properly) could result in employees raising grievances or even resigning and claiming constructive dismissal and/or sex discrimination. As mentioned above, certain elements of Mr Snell's compensation were increased by 20% specifically because of the unreasonable delay in dealing with his grievance so it is important that grievances are dealt with promptly.