Introduction of Shared Parental Leave and Pay
The new entitlement to shared parental leave (“SPL”) will come into effect for babies whose expected week of childbirth is on or after 5 April 2015 (or a child who is placed for adoption after that date). This new entitlement will enable eligible parents to take or share up to 50 weeks of SPL (i.e. everything other than the two week compulsory maternity leave period – or equivalent two week period in cases of adoption) and up to 37 weeks’ of Shared Parental Pay (“SPP”).
Unlike maternity, paternity and adoption leave, which are limited to distinct groups within the workforce, SPL and SPP is available to both men and women, and applies to births, adoptions and surrogacy arrangements. As such, SPL and SPP may be available to virtually the entire workforce at one time or another.
This scheme does not replace the current right to maternity leave and pay, ordinary paternity leave and pay, or statutory adoption leave and pay. However the current additional paternity leave scheme (in which fathers could use part of the mother’s unused entitlement to leave) will be abolished.
Potential issues to consider
In addition to updating relevant policies and staff handbooks, employers should consider their proposed SPL and SPP policies. We are already beginning to receive queries from employers regarding their proposed policies and in particular, whether they should/are required to match any enhanced maternity pay provided to employees. Some employers are even considering whether this means they should abolish/phase out their current enhanced maternity pay policies to avoid having to pay SPP at the same rate.
While the legislation does not require SPP to be paid at the same rates as enhanced maternity pay (“EMP”), employers who pay EMP are concerned that they may face discrimination claims if they do not also pay enhanced SPP at equivalent rates.
While a recent case concerning the soon to be abolished additional paternity leave scheme suggests it is unlikely that claims for direct discrimination will succeed and that it may be possible to justify indirect discrimination and thus avoid liability (Shuter v Ford Motor Company Ltd), it is by no means certain that the courts will follow the approach taken in that case. Indeed, many employers may not be able to justify such policies.
Our advice to employers
For any employer who currently offers enhanced maternity pay, the only completely safe route is to offer the same level of enhanced SPP. Any other action may be open to challenge, until we have case law to rely on. However, given the application of SPL and SPP to such a wide section of the workforce, this could be an expensive option.
Organisations should review policies and contractual rights and consider what, if any, justification might be available for any disparity in treatment as a result of different treatment between men and women. Documenting such justification might provide valuable evidence to defend a claim.