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Employers who currently offer enhanced maternity pay but don’t plan to offer the same to parents under the new shared parental leave system may find themselves facing claims of indirect sex discrimination, a recent legal webinar heard.
The free Employment Law Update webinar, hosted by Ruth Renton at Artington Legal, included a recent Employment Tribunal case (Shuter v Ford Motor Company Ltd) where a father made sex discrimination claims because he was not paid enhanced paternity pay during his additional paternity leave though enhanced maternity pay was offered by Ford to mothers on maternity leave. The Employment Tribunal found that he had not suffered direct discrimination as a man on additional paternity leave did not face the same issues compared to a woman on maternity leave, such as pregnancy, recovery from childbirth and possibly breastfeeding the child.
However, the Employment Tribunal found that offering enhanced maternity pay to mothers and nothing to fathers on additional paternity leave could have amounted to indirect discrimination. In this instance, said Renton, Ford was able to show there was a legitimate business aim for only paying enhanced maternity pay. Ford successfully argued that it offered enhanced maternity pay to promote diversity in a male-dominated industry. It would be interesting to see if this argument would work with regard to offering enhanced maternity pay for mothers but not for shared parental leave, she added, saying companies needed to think about the implications.
A poll of the employers who were taking part in the webinar showed 70% had not yet started preparing for shared parental leave, which affects babies born after 5 April 2015, and only 30% were looking at creating new policy documents and were therefore only at the beginning of the process.
The webinar covered many other issues, including the new power for Employment Tribunals to order equal pay audits of employers who lose an equal pay claim and the effect of the new flexible working legislation allowing requeststo be made by all employees. Another webinar poll found about half of employers taking part had noticed an increase in people applying for flexible working since the new legislation came in at the end of June. Renton said this was in line with what she was hearing from employers anecdotally. She added that there was not enough clarity on what employers should do if they received multiple applications for flexible working. Currently they tended to accept flexible working requests in favour of employees with additional protections, such as working mums, she said.
Renton also discussed the implications of the recent Employment Appeal Tribunal (EAT) decisions on the calculation of statutory holiday pay. She said the rulings centred around what constituted “normal pay” and what needs to be included in the calculation. These EAT decisions looked at the inclusion of overtime – both guaranteed and non-guaranteed and other types of payments which are essential to the employee’s role. Renton reminded the attendees that these EAT decisions only related to the 20 days’ statutory holiday provided by European Directives. She said the UK offered more statutory holiday than that outlined under European directives – 28 days compared with 20. Those extra eight UK statutory holiday days are not part of these decisions. This made it “a nightmare” for employers to allocate and calculate, she stated. Renton also looked at a recent European Court decision now back in the UK Employment Tribunal which also looked at the treatment of commission and its inclusion in the calculation of holiday pay. Renton stated that discretionary bonuses remained a grey area, still under review.
There were concerns around holiday pay claims being backdated, but the recent EAT decisions have limited this – any interval of three months or longer between vacation periods will break the chain in any series of underpayments.. Renton advised employers to:
– Review and amend their employees’/workers’ contracts and holiday policies to consider what needs to be included in holiday pay calculations and which periods of leave will be treated as manadatory four weeks’ leave required by EU law and which periods of leave (if any) will be treated as additional UK leave;
– Revise their budgets to take account of the new ruling on overtime and holiday.