The decision in Hextall comes hot on the heels of the EAT’s decision in Capita v Ali, in which the EAT found that a similar policy failing to mirror enhanced maternity pay for SPL did not amount to direct sex discrimination. Mr Ali has been given leave to appeal, but unless and until the Court of Appeal determines otherwise, the EAT’s decision in Ali is legally binding. (See our previous alert – EAT confirms that it is not direct sex discrimination for an employer to enhance payment for maternity leave but not SPL).
However, the EAT’s decision to send Hextall back to the ET means that the extent of the indirect sex discrimination risk for employers who fail to enhance SPL to the same level as any enhanced maternity pay remains uncertain. Indirect discrimination occurs where a provision, criterion or practice (PCP) adversely impacts on a particular group (who share a protected characteristic) and an employer cannot objectively justify the PCP by showing it to be a proportionate means of achieving a legitimate aim.
Case facts and ET judgment
Mr Hextall was a police constable in the Leicestershire Police Force (LPF). After the birth of his second child he took a 3 month period of SPL. During SPL he was paid at the statutory rate of pay only (which at the time was £139.58 per week). Under LPF’s maternity policy, officers with the required continuity of service were entitled to full pay for 18 weeks of maternity leave. Mr Hextall brought employment tribunal claims on the basis that, had he been a female officer taking maternity leave, he would have received full salary for the entire period he was on leave, and LPF’s failure to pay him similarly for his SPL amount to both direct and indirect sex discrimination. The ET dismissed both claims, concluding that women on maternity leave were not valid comparators for men on SPL in respect of either direct or indirect discrimination claims. Mr Hextall appealed against the dismissal of his indirect sex discrimination claim only.
The EAT accepted that the original ET had correctly identified the relevant PCP for Mr Hextall’s indirect discrimination claim as LPF’s practice of paying SPL at the statutory rate only. However, the ET had erred in its conclusion that because this PCP applied to all employees who could take SPL, and thus to both men and women, there could be no indirect discrimination. The ET had fallen into the trap of applying a direct discrimination comparator in an indirect discrimination claim.
The ET was also found to have erred in excluding women on maternity leave from the comparison pool for consideration of whether fathers were disadvantaged by the applicable PCP. The EAT found that any disadvantage suffered by fathers was in relation to taking leave to care for their child, as they had no choice other than to take SPL, paid at statutory rate only, whereas mothers could instead elect to take maternity leave and receive full pay for 18 weeks. The EAT therefore considered that the categories of employee that should be included in the comparison pool should be all employees with a present or future interest in taking leave to care for their recently born children. However, the ET had not made sufficient findings of fact for the size or composition of the comparator pool to be determined for the purpose of judging detrimental impact on Mr Hextall. The EAT therefore sent his indirect discrimination claim back for rehearing by a fresh ET.
It is disappointing that the EAT in Hextall was unable to provide the same level of clarity in relation to the risk of successful indirect sex discrimination claims arising from failure to enhance pay for SPL to the same levels as any enhanced maternity pay as it did in relation to direct discrimination claims in Ali. As it stands, Hextall leaves the door open to indirect sex discrimination claims against employers whose policies provide inconsistent levels of pay for maternity leave and SPL. Employers operating such policies should therefore ensure they have turned their mind to the issue of objective justification for their approach. For some, this is likely to be problematic, as cost alone will not be sufficient. In this regard, although the original ET in Hextall dismissed the indirect discrimination claim on a different basis, it is worth noting the ET’s comments on LPF’s stated reasons for not introducing similarly enhanced pay for SPL as they had for maternity leave. The ET made a clear finding of fact that the ‘real’ reason for such pay differentiation boiled down to cost, and that cost per se would not have justified an otherwise unlawful act of indirect discrimination. In essence, employers cannot defend themselves from an indirect sex discrimination claim for a failure to enhance pay for SPL to the same level as maternity pay by arguing that they cannot afford not to discriminate. The prospects of an employer successfully defending such a claim on other grounds, such as retention of female employees, or encouraging women to return to the workplace following childbirth, will be heavily dependent on the actual make up and circumstances of their particular workforce.
Hopefully, any new ET decision in Hextall will include consideration of, and therefore further guidance on, the question of potential objective justification for different levels of pay for different types of family leave. In particular, it will be interesting to see what weight any new ET decision gives to the contrasting purposes of maternity leave and shared parental leave, (so emphasised in the EAT’s decision on direct discrimination in Ali) in the context of justifying indirect discrimination. As always, EEF will keep members informed of any further developments in this area.