Secretary of State for Employment v Clarke CA IDS Brief 568 July 1996
Caruana v Manchester Airport plc EAT [1996] IRLR 378
Rees v Apollo Watch Repairs EAT (unreported)

Since the Gillespie judgment in the European Court of Justice there has been considerable uncertainty whether (and when) there will be appropriate circumstances for a comparison to be made between a pregnant woman or a woman on maternity leave and a man on sick leave. In Gillespie, the ECJ ruled that pregnant women or women on maternity leave are in a special position which requires them to be afforded special protection. This special protection status means they cannot compare their position with either that of a man or with a woman actually at work.

The arguments have almost come full circle. After the introduction of the Sex Discrimination Act employers argued - initially with some success - that discrimination against pregnant women and women who had recently given birth could not be unlawful sex discrimination. They argued that there could be no comparison with a man as only women can become pregnant and give birth.

Gillespie reaffirmed the "protected status, no comparison" view and a further endorsement has now been given in the case of Secretary of State for Employment v Clarke (Court of Appeal 15 May 1996). The Clarke case predates the implementation of the Pregnant Workers Directive and is a claim against the Secretary of State for Employment for a failure to make a payment from the National Insurance Fund when her employer became insolvent.

Ms Clarkes's employer went into liquidation in 1991 while she was on maternity leave and she was dismissed without a payment in lieu in spite of her entitlement to 12 weeks' notice. Her colleagues, who were also dismissed and not paid, were able to claim a payment for their statutory notice period (subject to the limit on a week's pay) from the Secretary of State.

The law has since been changed to comply with the Pregnant Workers Directive so that women on maternity leave who are dismissed are entitled to their notice period in the same way as employees absent from work on sick leave or holiday.

Mrs Clarke's claim was brought under Article 119 of the Treaty of Rome. Her complaint was that the Employment Protection (Consolidation) Act 1978 excluded women absent from work due to pregnancy and child birth from claiming from the National Insurance Fund. She sought to have this dis-applied to enable her to claim from the fund in the same way her colleagues did.

The EAT found in her favour, but the Court of Appeal overturned the decision. It held that pregnancy is not an illness and that women taking maternity leave are in a special position, not a comparable situation, to men. There appear to be two possible routes that remain open for arguing for maternity pay rights comparable to those of men on sick pay.

Firstly under Coyne v ECGD [1981] IRLR 51 and Reay v Sunderland Health Authority (unreported), the line of authorities pre-dating Gillespie which were argued solely under the Equal Pay Act 1970. Secondly through the gap apparently left by Gillespie for claims equivalent to contractual sick pay by reference to other justified absences from work.

But the indications from Clarke are that it will become increasingly difficult to argue the "sick man comparison". In cases concerning treatment of pregnant women governed by the Sex Discrimination Act and Equal Treatment Directive - rather than pay and contractual terms - it was thought that the issue has most definitively been decided by Webb v EMO (in the ECJ [1994] QB718): 'There can be no question of comparing the situation of a woman who finds herself incapable, by reason of pregnancy...of performing the task for which she was recruited with that of a man similarly incapable for medical or other reason...dismissal of a pregnant woman recruited for an indefinite period cannot be justified on grounds relating to her inability to fulfil a fundamental condition of her employment contract'.

Any other interpretation would make the Equal Treatment Directive ineffective. But interesting emphasis was placed by the ECJ on the fact that Mrs Webb was employed for an indefinite period.

When Webb v EMO was referred back, the House of Lords suggested the possibility of a distinction where a woman was on a fixed term contract and her absence due to pregnancy would make her unavailable for the whole of the length of the contract.

In Caruana, Manchester Airport unsuccessfully tried to argue that the non-renewal of a fixed term contract for a woman on maternity leave, because she would be unavailable for work at the beginning of the renewed contract, fell outside the Webb judgment.

The EAT resoundingly rejected the argument. if they had found for Manchester Airport, it would be a positive encouragement to employers to offer or impose a series of short term contracts to try and avoid the impact of the discrimination laws. It is a welcome relief that this potential loophole has been so firmly closed.

It is also significant that Mrs Caruana was not an employee for the purposes of unfair dismissal, but self employed. She came within the wider definition of 'employee' for the Sex Discrimination Act as she was engaged personally to perform work for the airport.

But the case of Brown v Rentokil Ltd (House of Lords, unreported) may yet confuse the issue. Although Mrs Brown was dismissed as a result of a pregnancy related illness, the Scottish Court of Session held that there had been no discrimination as she had been treated in the same way as a man absent through illness.

The House of Lords has referred the question of whether her dismissal was in breach of the Equal Treatment Directive to the ECJ. Brown pre-dates the Pregnant Workers Directive which provides for a pregnancy related dismissal to be automatically unfair under the Employment Protection (Consolidation) Act.

But what of the situation where the maternity cover replacement is more acceptable? The EAT in Rees v Apollo Watch Repairs Plc had no difficulty in finding that it was still unlawful sex discrimination.

There is no break in the chain of causation. Miss Rees' pregnancy led to the appointment of a replacement who, but for Miss Rees' pregnancy, would not have been engaged and no comparison between them would ever have been made and Miss Rees would not have been dismissed.

Equal treatment and benefits

Meyers v Adjudication Officer 1996 1CMLR 461ECJ

The European Court of Justice has ruled that equal treatment principles must be applied to benefits paid by virtue of employment. In Meyers the assessment of entitlement to Family Credit had to take account of childcare costs.

The Applicant, a single mother, applied for Family Credit for herself and her three-year-old daughter. The Application was rejected because her income after deductions was too high to entitle her to Family Credit. She appealed on the grounds that childcare costs should be deducted before assessing her net income.

She said that not allowing the deduction of childcare costs for the purposes of calculating her net income discriminated against single parents since it was much easier for couples to arrange their working hours so that children could be cared for by one parent or the other. As most single parents were women this constituted indirect sex discrimination against women, an argument which the Social Security Appeals Tribunal accepted.

The Social Security Minister asked the ECJ to decide whether Family Credit was covered by the Equal Treatment Directive.

The Government argued that Family Credit should be excluded because it had nothing to do with either access to employment, as it was paid to those already in work, or with working conditions governed by the contract of employment. The ECJ decisively rejected the Government's arguments.

It was held that a scheme of benefits could not be excluded from the scope of the Directive solely because it was part of the National Social Security system. The ECJ said that the legislation referred to by the UK Government was aimed at ensuring that families did not find themselves worse off in work than they would be if they were not working. The benefit was intended to keep poorly paid workers in employment and so was concerned with access to employment. In fact the availability of the benefit would encourage workers to take employment they may otherwise be unable to afford.

Compliance with the fundamental principle of equal treatment pre-supposed that a benefit such as Family Credit, which was linked to an employment relationship, constituted a working condition within the meaning of the Directive. To confine the scope of the Directive purely to working conditions in the contract of employment, would remove situations directly covered by an employment relationship from the Directive.