Maternity provisions in Partnership Agreements

An ‘employee’ is provided with a statutory right to maternity leave, however, the same cannot be said for partners.  There is some legal protection provided for pregnant partners, as the Equality Act 2010 seeks to ensure they do not suffer unlawful discrimination due to their pregnancy or childbirth.

It is discriminatory to treat a partner less favourably during a ‘protected period’ on the grounds of pregnancy or a pregnancy related illness, and this protected period lasts from the date of conception to two weeks after the birth. Case law has covered less favourable treatment arising after the protected period, where the cause of the discriminatory treatment pregnancy or pregnancy related illness.  Less favourable treatment includes expulsion, de-equitisation and reallocation of profitable clients.

The problem for female equity partners is that the protected period is so short, just 2 weeks after birth. Reduction of their share in profits during this period would be discriminatory but beyond that a female partner will need to rely on direct and indirect sex discrimination protections if they consider they have been treated less favourable. This is not straightforward and one view is that in the absence of any medical reason for additional leave women have the right to be treated no less favourably than a man who seeks voluntary leave for childcare or other reasons.  Yet it could be put forward that by giving male and female partners the same length of leave is indirectly discriminating against women, since in this situation a woman’s requirements for such leave are often greater than for a man.

So although the law is unclear on this point, it does not mean that partners can ignore the need for maternity/child care provisions in their partnership contracts.  There are several commercial considerations that need to be taken into account.  If a partnership wants to retain high calibre female partners then the partnership will need to make adequate provision to encourage them to remain in the partnership after child birth.  Also in relation to career development, there is no incentive for an employee to strive to become a partner if upon becoming a partner they lose the maternity rights they had as an employee – or might this be a ground for indirect discrimination?

Partnership and LLP agreements often fail to cover maternity or paternity entitlements.  Resolving the issue when is arises is likely to risk that the parties are unable to remain impartial, resulting in emotional decisions rather than commercial ones.