Hair Division Ltd v MacMillan

An Employment Tribunal must determine the employer’s actual reason for dismissal in a pregnancy-discrimination claim. A causal sequence connecting pregnancy, workplace stress, absence and dismissal does not itself establish discrimination under Equality Act 2010 section 18. The employer must have the relevant knowledge, and its non-discriminatory explanation must be addressed.

Entitlement to statutory maternity pay is for HMRC’s statutory determination process, not the Employment Tribunal. Notification requirements for maternity leave remain effective; the rules governing an earlier start through pregnancy-related absence or childbirth do not excuse a failure to notify the intended start date. A worker absent through sickness throughout a leave year may receive untaken holiday pay on termination, but that rule does not apply where the worker had sufficient opportunity to take leave before the sickness absence.

The claimant, a salon manager, was absent with stress during her pregnancy and was dismissed for attendance and performance reasons. She alleged pregnancy discrimination and unfair dismissal. The Employment Tribunal found discrimination under section 18(2) of the Equality Act 2010, awarded compensation, and made awards for wages and holiday pay.

The employer appealed. It contended that the Tribunal had wrongly determined entitlement to statutory maternity pay and leave, wrongly inferred pregnancy discrimination without addressing its explanation that dismissal resulted from prolonged absence, and wrongly awarded holiday pay for an earlier leave year.

The central issues were whether the Tribunal’s approach to statutory maternity rights and the discrimination burden of proof was legally sound, and whether the claimant’s sickness absence brought her within the rule permitting payment for untaken annual leave on termination.

1. Appeal allowed. The Tribunal’s discrimination conclusion could not stand because essential parts of its reasoning were legally or evidentially erroneous. The case was remitted to a freshly constituted Employment Tribunal.

2. An Employment Tribunal has no jurisdiction to determine whether an employee was entitled to statutory maternity pay. The statutory process administered by HMRC is exclusive. The inclusion of statutory maternity pay within the definition of wages in the Employment Rights Act 1996 permits a tribunal to decide whether pay was in fact received, but not the antecedent question of entitlement. The Tribunal therefore erred in treating the employer’s asserted denial of entitlement as false.

3. The claimant’s contract required written notification of pregnancy, expected confinement and the intended start date of maternity leave. Regulation 6 of the Maternity and Parental Leave Regulations 1999 governs when leave begins where pregnancy-related absence occurs shortly before confinement or childbirth is early. It does not remove the notification requirement in regulation 4. The Tribunal erred in treating the claimant’s failure to notify an intended start date as immaterial.

4. For section 18(2), the decisive question is why the employer dismissed the claimant. It is insufficient to identify a causal chain from pregnancy to workplace stress, absence and dismissal. The Tribunal had to determine whether pregnancy or pregnancy-related illness was the employer’s conscious or unconscious reason. It also had to evaluate the employer’s explanation that dismissal was caused by lengthy absence. It did not do so. Further, the findings did not permit the Tribunal to impute the line manager’s knowledge of pregnancy to the company’s managing director, who was not found to have been told or to be the recipient of that knowledge.

5. The holiday-pay award also failed. The rule in NHS Leeds v Larner, [2012] EWCA Civ 1034, assists a worker prevented by sickness from taking annual leave throughout the relevant leave year. The claimant had almost seven months in which she could have taken leave before her sickness absence. That authority therefore did not apply.

• Employment Appeal Tribunal: Allowed the employer’s appeal and remitted the claims to a freshly constituted Employment Tribunal.
• Employment Tribunal, Edinburgh: In a judgment registered on 2 March 2012, upheld the claimant’s pregnancy-discrimination and unfair-dismissal claims, awarded £5,000 compensation for discrimination, and made awards for wages and holiday pay.