The charity Pregnant Then Screwed had succeeded in arguing before the Court of Appeal that the UK Government’s COVID-19 self-employment income support scheme (SEISS) indirectly discriminated against self-employed new mothers.
Whilst the victory itself is limited—as ultimately the Court of Appeal determined the scheme was justified in the context of pandemic emergency circumstances and awarded no compensation—the ruling has highlighted the UK Government’s failure to consider working mothers properly.
In this article, Keystone Law’s Michelle Last and Manuela de Castro provide an overview of the judgment and highlight the significant impact of the case.
What Is SEISS?
SEISS was introduced by the UK Government on 30 April 2020 and provided for payments to self-employed individuals who maintained a business that had been adversely affected by the Covid-19 pandemic. To benefit under the scheme, earnings were calculated based on the average trading profits of the individual’s business throughout 2016-2019.
During 2016-2019, an estimated 75,000 self-employed women took time off work for maternity leave. Because they could not discount this period in calculating their earnings, those women received lower payments under the scheme as their average earnings over 2016-2019 were lower due to maternity leave. As a result, these figures did not represent their usual profits in a typical trading year.
The scheme was amended in July 2020 to include those who had not qualified because of the effect of childcare, pregnancy or maternity on their trading profits or total income for the tax year 2018-2019. But this measure did not assist working mothers affected by the calculation of profits in earlier years.
Pregnant Then Screwed brought a publicly funded legal challenge against the Government for unlawfully discriminating against self-employed women who had taken a period of leave relating to maternity or pregnancy during 2016-2019. Initially, their claim was unsuccessful.
In February 2021, the High Court held that SEISS was not discriminatory. Mrs Justice Whipple said that the Government had “good reason for adopting an approach that was simple and which used one rule, one approach, applicable to all” and that using another approach “would have involved expense and led to delay.” Pregnant Then Screwed appealed that decision, and in November 2021, the Court of Appeal partly overturned the decision.
The Court of Appeal decided that tens of thousands of women who took maternity leave between 2016 and 2019 were indirectly discriminated against under SEISS because it did not allow them to discount periods of maternity leave when calculating average profits.
However, although the affected mothers claim a victory, it is more of a symbolic win than a financial one. The Court of Appeal has determined that, although the SEISS scheme was indirectly discriminatory, the Government should not have to compensate those mothers adversely affected due to the need to roll out the scheme at speed to protect workers more generally. The Court of Appeal found that discrimination was justified in the circumstances by the need for speed, simplicity and ease of verification of profits in the unique circumstances of the pandemic.
The Impact of the Case
In May 2020, Chancellor Rishi Sunak denied that the scheme was discriminatory, stating that “for all sorts of reasons people have ups and downs and variations in their earnings, whether through maternity, ill-health or others.”
Whilst affected mothers might—if pushed—concede that the scheme which overlooked them was not personal, this should not be for the reason for the lack of compensation once the discrimination was brought to light.
Working mothers have now set the landscape for future discrimination challenges over Government policy. In the future, policymakers, employers, and public bodies will have to consider how a decision impacts women with children.