EAT allows appeal: ET erred in its dismissal of indirect discrimination claim. Rachel Crasnow QC, specialist in workplace rights, considers the latest appeal in the Shared Parental Leave saga.
SUMMARY: Yesterday the EAT found that the ET erred in adopting for the purposes of Mr Hextall’s indirect discrimination claim their reasons for rejecting women on maternity leave as a comparator for a direct discrimination claim. The identification of a pool for testing disparate impact of a PCP on men and women in materially indistinguishable circumstances is a different exercise from that in a direct discrimination claim. Further the ET erred in failing to base their decision on the disparate impact relied upon: fathers have no choice but to take SPL at the statutory rate of pay whereas mothers have the option of ML at full pay.
Mr Hextall was a serving police constable working in the Roads Armed Policing Team. His wife ran her own business and gave birth to their second child on 29 April 2015. Mr Hextall took SPL from 1 June to 6 September 2015 and during this period was paid at the rate of £139.58 per week. Had he been a female PC on ML he would have been entitled to be paid his full salary for the period over which he took SPL. Within the Leicestershire police force and across the force generally, women on ML and male or female primary carers on adoption leave are contractually entitled to full pay – Occupational Maternity Pay and Occupational Adoption Pay – for 18 weeks.
The ET decision
The comparator the parties selected was a female PC who took ML and was paid enhanced MP at the rate of full pay. Although her contract included a right to ShPP she was in practice unlikely ever to utilise it particularly not during the period in respect of which she would be entitled to enhanced MP.
The ET called the claim
“… a bold and ingenious attempt to gain for men – or men who are police officers at least – a right to payment of a kind of paternity pay at the same rate as maternity pay is paid to women.”
Mr Hextall said this was wrong – what he was seeking was pay for men taking SPL following the birth of their child at a rate equivalent to that which women on ML are paid.
His direct discrimination claim failed firstly as the Tribunal rejected the submission that there were no material differences between the circumstances of the comparator and Mr Hextall pursuant to s23 EqA.
Despite adoptive parents having 18 weeks of full pay, the ET said there were still significant links between maternity and pregnancy and ML, since the first 14 weeks of ML is identified in the Pregnant Workers Directive as a period when employers are required to allow mothers to take leave in recognition of the fact that, “pregnant workers, workers who have recently given birth or who are breastfeeding must be considered a specific risk group in many respects, and measures must be taken with regard to their safety and health”. It saw as significant that no such considerations apply to fathers.
The Tribunal applied its s23 finding to Mr Hextall’s indirect discrimination claim as well as to his direct complaint.
Secondly it had said that the PCP did not put men “at a particular disadvantage when compared with” women, since paying the same sum of money to men and women could not be said “to be particularly disadvantageous to men” (see paragraph 60). The reasoning was there being no causal link between paying ShPP at one rate and enhanced MP at another. The ET thought that the real nature of the claimant’s case was that men are disadvantaged not by any PCP connected with SPL but by the fact that in practice, one has to be a woman to get enhanced MP. Accordingly they held the claim of indirect discrimination was “a non-starter” (see paragraph 83).
Mr Hextall’s arguments on indirect discrimination
On appeal it was argued that that whilst of course the PCP applied to both men and women, the Tribunal had not properly considered the resultant disadvantage – that the only option for men wishing to take leave after the birth of their child was to take SPL at the statutory rate. In contrast women wishing to take such leave had the possibility of taking ML at full pay.
Secondly, Mr Hextall said reliance on s23 led to the ET wrongly applying the test for direct discrimination to the claim for indirect discrimination.
The fact that those on SPL were paid less than women on ML was not a PCP or a disadvantage but a ‘context factor’ – a reason which, according to the Supreme Court in Essop & Naeem  ICR 640, need not be unlawful in itself (see para ). Here the fact that women on ML were paid more than men on SPL was a context for the claim rather an irrelevance because men and women on SPL were paid the same. The context assists in establishing the reason for the disadvantage. Chris Milson of Cloisters submitted on behalf of the intervenor Working Families that the tribunal was wrong to find that the PCP could not give rise to a particular disadvantage.
The Appellant also averred that the Tribunal erred in constructing a pool for comparison under s19 EqA which did not exclude those men and women who had no interest in the PCP – by virtue of not being or not going to be imminently about to become parents.
The EAT decided that the ET had erred in its dismissal of the s19 complaint
The “particular disadvantage” was this: whilst the rate of pay for SPL was the same for both father and mother, such a rate had a disparate impact on fathers because they, as opposed to mothers, have no other choice (in their choice of paid leave) but to take SPL and are or would be deterred from taking leave to care for a child.
Thus said the EAT, the relevant pool for testing whether men suffered a relative disadvantage by the application of the PCP would be those police officers with a present or future interest in taking leave to care for their new-born child. Those who have no interest in taking such leave should be excluded from the pool – see Rutherford v DTI  IRLR 551 in the House of Lords.
The ET had dealt with comparators in the wrong way. The EAT said “The identifying of a pool for testing disparate impact of the application of a PCP on men and women in materially indistinguishable circumstances is a different exercise from that of deciding whether the circumstances of one chosen comparator of the opposite sex are materially indistinguishable from those of the Claimant.”
So the ET erred by relying upon the rejected s13 comparator (a woman on ML) – as its first reason for rejecting the indirect discrimination complaint.
Data was needed to construct the appropriate pool. Findings of fact on such material would be needed to determine disparate impact.
A key reason for the failure of the s19 claim at Tribunal level was the finding that the PCP did not put men at a particular disadvantage when compared with women. The EAT said the ET made a mistake by deciding that since the application of the PCP resulted in payment of the same amount to men and to women on SPL, the PCP could not be particularly disadvantageous to men.
Given Baroness Hale’s observation at paragraph 72 of Rutherford: “ It is of the nature of such apparently neutral criteria or rules that they apply to everyone, both the advantaged and disadvantaged groups. So it is no answer to say that the rule applies equally to men and women …”, Mr Hextall was right to argue that a Claimant does not have to show a particular threshold of disparate impact to establish that a PCP has a disproportionate adverse effect.
Equal pay in the Tribunal
The EAT found the ET did not err in dismissing the equal pay aspect of the claim as the Claimant, rather than claiming that his contract does not have a provision for maternity leave and pay, was arguing that the term of his contract relating to ShPP be upgraded so as to be equivalent to a term of his comparator’s contract relating to enhanced MP.
The Tribunal’s error meant the indirect claim will be remitted. It may seem obvious that disparate impact is self-evident, as it is only women who have the choice of taking maternity leave at full rate of pay to care for their child.
Since the Chief Constable did not appeal the finding that the (discriminatory) PCP – of paying only the statutory rate of pay for those taking a period of SPL – was not justified, this issue was not considered in the EAT judgment.
It has been commented upon previously that adoption leave paid at the same rate as ML means that the link between birth and breastfeeding and ML is less rigid. (See here for blog of Rachel Crasnow QC and Siân McKinley.)
The EAT’’s use of the “context factor” to analyse the indirect discrimination claim made a significant difference to the outcome in his appeal – as in Essop. In both cases the term enhanced the means of understanding the claim. If the Chief Constable of Leicestershire Constabulary appeals, when this case reaches the Court of Appeal (probably joined with Ali who recently lost his EAT appeal but who has already been given leave to appeal to the CA) it is hoped that the guidance of the Supreme Court in Essop and the House of Lords in Rutherford prove as instructive.
At the Court of Appeal the differences between direct and indirect discrimination, issues of material circumstances for comparators, the nature of thresholds for disparate impact and particular disadvantage in itself will be hotly contested
Until then employers are at risk of indirect discrimination complaints where they fail to enhance ShPP in workplaces where MP is enhanced, and may potentially remain at risk of direct discrimination claims involving parental leave when babies are more than 26 week’s old (see Ali v Capita Customer Management Ltd EAT at para  and here).