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“It’s Okay to Pay Women More”

9 August 2019

“It’s Okay to Pay Women More”

Donna Trembath, Executive Counsel and Rocio Paradela, Graduate Associate

On 24 May 2019 an important decision was handed down in the United Kingdom confirming that employers are entitled to provide birth mothers with better paid parental leave (“PPL”) than husbands or partners. This is unsurprising in Australia, where a similar case was determined in 2013, but worth noting as many employers in Australia prefer a gender-neutral approach.

The UK decision about “paying women more” 

The case of Ali v Capital Customer Management Ltd; Hextall v Chief Constable of Leicestershire Policei was a joint appeal of two male employees against the parental leave policies of their employers.

The statutory backdrop is that women in the UK have a right to 39 weeks of paid “maternity leave”, six weeks’ at 90% of their full rate of pay and the remainder at a lower “statutory rate” of pay. Women can bring their maternity leave to an end after two weeks and opt to take the remainder of their leave with their husband or partner under a “shared parental leave” regime for up to 52 weeks (less the two-week compulsory period) at the statutory rate of pay. At the relevant time the statutory rate was around £139 per week, or about $247 per week in Australian dollar terms.

Employers are, of course, free to supplement the statutory scheme by having their own, more generous, policies, which is what had occurred in this case. The employers were paying women who had given birth at their full rate of pay for up to 14 or 18 weeks, respectively. However, husbands and partners taking shared parental leave received only the lower statutory rate.

The circumstances of the employees 

Mr Ali’s daughter was born on 5 February 2016, after which he immediately took two weeks of leave. During that period his wife was diagnosed with post-natal depression and advised by her doctor to return to work. Mr Ali sought to take shared parental leave to care for his daughter to enable this to occur and wished to be paid at the same rate of pay as a female employee would have been paid on maternity leave.

Mr Hextall was a police constable whose wife ran her own business. His wife gave birth to their second child on 6 September 2015 and Mr Hextall took 14 weeks’ shared parental leave. He brought a claim alleging that his employer’s policy of remunerating shared parental leave at the statutory level only caused particular disadvantage to men and was unlawful discrimination.

Findings by the UK Court of Appeal 

The issues in the Ali and Hextall cases included:

  • whether the men should receive equal treatment and pay from their employers for performing the same role as a birth mother; and
  • whether the predominant purpose of maternity leave is not childcare but other matters exclusive to the birth mother resulting from pregnancy and childbirth and not shared by her husband and partner.

The Court of Appeal found that there was no direct discrimination by the employers, because women taking maternity leave are in materially different circumstances than men and are entitled to special treatment afforded to women in connection with pregnancy or childbirth. Nor was there indirect discrimination against the male employees, with the Court finding that there was nothing unusual about the employers’ maternity or parental leave schemes particularly when Parliament had made an exception for provisions giving special treatment to a woman in connection with pregnancy or childbirth.

The Australian position 

The approach taken in the UK case is also available in Australia.

The Sex Discrimination Act 1984 (Cth) (the “SDA”) has an exemption for special measures intended to achieve equality. Section 7D of the SDA provides that a person may take special measures for the purpose of achieving substantive equality between various types of people, including:

  • men and women;
  • women who are pregnant and people who are not pregnant; and
  • women who are breastfeeding and people who are not breastfeeding.

An employer does not discriminate against another person by taking special measures authorised by section 7D of the SDA. An employer will be regarded as having taken a special measure to achieve equality even if the measure is taken for a range of purposes and is not the dominant purpose.

States including New South Wales, Victoria and Queensland have a similar type of exemption.ii A case in point is Tung v State of Queensland.iii

Tung v Queensland Health 

This decision of the Queensland Civil and Administrative Tribunal (“QCAT”) was about whether it was discriminatory for an employer to refuse to provide a male employee with the same level of PPL as a female employee in the same position.

Mr Tung was a male nurse employed by Queensland Health. Mr Tung’s wife ran her own business as a hairdresser and was unable, for practical reasons, to take much time away from her business. The couple decided that Mr Tung would be the primary caregiver for their child for a period after its birth. Mr Tung applied for 14 weeks’ paid maternity leave that was available to female employees of Queensland Health and was refused. Mr Tung alleged that this amounted to both direct and indirect discrimination under the Anti-Discrimination Act 1991 (Qld) (“ADAQ”).

On the face of the departmental policies which provided for such leave, it was available only to female employees who were pregnant. QCAT found that there was no direct sex discrimination, because a female employee who was not pregnant would have been treated the same way as Mr Tung.

When considering whether there was indirect discrimination, QCAT asked whether providing a benefit to working mothers as part of what might colloquially be described as “affirmative action” or “positive discrimination” is unreasonable when similar benefits are not available to other, arguably, equally-worthy employees who also have family responsibilities. Expert evidence was given that there are benefits to both parents and the child itself if fathers are allowed time to have an active parenting role.

However, QCAT decided that the focus must be upon whether the term of the policy limiting the benefit to mothers was reasonable, not whether it would have been reasonable to provide a similar benefit to other employees. The policy was reasonable because it:

  • took account of the impact of pregnancy on the mother, and was designed to allow full recovery of the mother from both the pregnancy and childbirth;
  • was designed to enhance child and maternal health, development and bonding (although it was recognised that this might equally be said in support of the provision of such leave to fathers); and
  • facilitated greater workforce participation by women and promoted gender equality and the retention of skilled women in the workforce.

QCAT considered that, even if it was wrong in concluding that there was no discrimination against Mr Tung, the policy was exempt from these considerations under the “welfare measures” and “equal opportunity measures” in the ADAQ.

The takeaways

  • As in the UK, Australian employers are allowed to provide better PPL policies for women who give birth than other types of employees.
  • Many employers prefer to have a gender-neutral PPL policy that provides benefits to the “primary care-giver”. This ensures equal treatment for all employees regardless of whether they become parents through giving birth, their partner giving birth or surrogacy.
  • However, the scope exists for employers to implement lawfully special measures to assist female employees who are birth mothers back into the workforce.

i [2019] EWCA Civ 900.
ii Section 35 of the Anti-Discrimination Act 1977 (NSW), section 12 of the Equal Opportunity Act 2010 (Vic) and section 105 of the Anti-Discrimination Act 1991 (Qld).
iii [2013] QCAT 251.

Posted in Strateg-Eyes.
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