Alabaster v Barclays Bank Plc & Anor

Where a pay rise is awarded between the beginning of the reference period and the end of maternity leave, Article 141 of the Treaty of Rome requires it to be reflected in maternity pay, whether or not it is backdated.

A national deduction-of-wages remedy is not an effective means of enforcing that right if, without objective justification, it gives materially less favourable protection than the regime for other equal-pay complaints. The appropriate remedy is to disapply the male-comparator requirements in section 1 of the Equal Pay Act 1970 for a maternity-pay discrimination claim.

The appellant received statutory and contractual maternity pay calculated from earnings in an eight-week reference period. A salary increase took effect before her maternity leave began but after that period, and was not reflected in the calculation.

The Employment Tribunal dismissed her claim for an increased payment as out of time under the Employment Rights Act 1996. The Employment Appeal Tribunal upheld that decision. The Court of Appeal referred questions to the European Court of Justice, which ruled in Case C-147/02 that the pay rise had to be included.

The remaining issue was whether domestic law afforded an effective remedy for the breach of the appellant's equal-pay rights.

1. Appeal allowed. The Court gave effect to the European Court of Justice ruling that Article 141 required the pay rise to be included in the appellant's maternity pay. The employer's failure to do so breached her Community-law rights.

2. The Court held that reliance solely on the unlawful-deduction regime in sections 13 and 23 of the Employment Rights Act 1996 was inadequate. Compared with an equal-pay claim under the Equal Pay Act 1970, it carried materially less favourable time-limit, interest, tribunal-composition, evidential, advisory and victimisation protections. Those differences were not objectively justified. The statutory-maternity-pay adjudication route under section 20 of the Social Security Administration Act 1992 was also incomplete because it could not determine the contractual element of maternity pay.

3. Disapplying only the ERA limitation period would not cure the other deficiencies. The Court was bound by Staffordshire County Council v Barber, [1996] ICR 379, to hold that an employment tribunal could not entertain a claim directly under Article 141. It also rejected a remedy under the Sex Discrimination Act 1975 by disapplying section 6(6).

4. Following the example of Webb v EMO Air Cargo (UK) Ltd (No 2), [1995] ICR 1021, the proper adjustment was to disapply the parts of section 1 of the Equal Pay Act 1970 which require a male comparator. That enabled the appellant to recover compensation for sex discrimination in respect of maternity pay. The cross-appeal was dismissed and judgment was entered by consent for £204.53 plus interest.

• Court of Appeal (Civil Division): Allowed the appeal and dismissed the Secretary of State's cross-appeal: [2005] EWCA Civ 508.
• European Court of Justice: On a reference from the Court of Appeal, ruled that Article 141 required a pay rise awarded during the relevant period to be included in maternity pay: Case C-147/02.
• Employment Appeal Tribunal: On 19 April 2000, dismissed the appellant's appeal from the Employment Tribunal.
• Employment Tribunal: On 10 March 1999, dismissed the Article 141 claim and held the unlawful-deduction complaint under the Employment Rights Act 1996 to be out of time.