Alabaster v Barclays Bank Plc

This appeal concerned whether a pay rise awarded after the relevant reference period but before the start of maternity leave must be taken into account in calculating statutory maternity pay (SMP) and, having accepted the European Court of Justice's ruling that it must, whether the claimant was deprived of an effective remedy by domestic limitation and procedural rules.

The ECJ (Case C-147/02) determined that Article 141 requires any pay rise awarded between the beginning of the reference pay period and the end of maternity leave to be included when maternity pay is calculated, whether or not it is back‑dated into the reference period. Domestically, the court held that the Employment Rights Act 1996 route for recovering an unauthorised deduction (s 13 ERA) and its short three‑month limitation period left a claimant in the position of a woman on maternity leave at a material disadvantage compared with remedies available under the Equal Pay Act 1970 and related discrimination law.

Because the domestic ERA/SSAA remedies were deficient in ways which could not be objectively justified under the EC principles of equivalence, effectiveness and equality, the Court of Appeal disapplied the comparator requirement in s 1 of the Equal Pay Act 1970 so that the appellant could recover the unpaid amount. The appeal was allowed and a monetary award was entered for the shortfall plus interest.

Background and parties: The appellant, Mrs Michelle Alabaster, was employed by Woolwich (later Barclays) and became pregnant in 1995. Her salary was increased effective 1 December 1995 but the period used to calculate her "normal weekly earnings" for SMP was 1 September to 31 October 1995 and therefore did not reflect the increase. As a result her SMP was calculated on the lower salary and she claimed the shortfall.

Procedural history: Mrs Alabaster brought claims to an Employment Tribunal (ET), adding the Secretary of State as a respondent. The ET dismissed her ERA s 13 deduction claim as time barred and said it had no jurisdiction to entertain a free‑standing Article 141 or Equal Pay Act claim. The Employment Appeal Tribunal (EAT) upheld the ET. This Court referred key questions to the European Court of Justice (ECJ). The ECJ held that Article 141 required inclusion of the pay rise in the SMP calculation (Case C-147/02). The case then returned to this Court for determination of domestic remedy issues.

Nature of claim and issues: (i) Claim for increased SMP arising from a pre‑leave pay rise not reflected in the reference period. (ii) Whether the domestic limitation and procedural regime under the Employment Rights Act 1996 or the Social Security Administration Act 1992 denied an effective remedy required by EC law. (iii) Whether the Equal Pay Act 1970 and related discrimination remedies should be adapted to provide an effective remedy, specifically whether the comparator requirement in s 1 EPA should be disapplied.

Court's reasoning: The court applied EC principles of equivalence, effectiveness and equality. It compared the ERA and EPA regimes across multiple features (time limits, tribunal composition, interest, availability of assistance, statutory questionnaires, victimisation protection and burden of proof) and concluded a woman in the appellant's position would be significantly disadvantaged if confined to ERA or SSAA remedies. The deficiencies could not be objectively justified. The court rejected alternatives (direct Article 141 claims to tribunals and carving out a remedy under SDA by disapplying s 6(6)) as either unavailable or inappropriate. Following domestic authority on remedial adaptation, the court disapplied the male comparator requirement in s 1 EPA so that the appellant could pursue her equal pay claim without a male comparator. The appeal was allowed and a monetary award for the shortfall plus interest was ordered.

Relief sought: increased maternity pay (the shortfall) and related remedies for an unauthorised deduction.

Appeal allowed. The court applied the ECJ's ruling that a pay rise awarded between the start of the reference period and the end of maternity leave must be included in SMP calculations and held that domestic remedies under the ERA/SSAA would not give an effective remedy consistent with EC law. To provide an effective remedy the court disapplied the male comparator requirement in s 1 of the Equal Pay Act 1970, permitting recovery of the shortfall. Consequential monetary relief was ordered.

Employment Tribunal decision 9 March 1999 (dismissal of claims); Employment Appeal Tribunal upheld 19 April 2000; this Court referred questions to the European Court of Justice on 26 February 2002; ECJ preliminary ruling in Case C-147/02 Alabaster v Woolwich PLC on 30 March 2004; returned to Court of Appeal for final determination and judgment 3 May 2005.