England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL

		Royal Courts of Justice Strand, London, WC2A 2LL
		18th December 1998

Lord Justice Ward:

This is an appeal by Mrs Halfpenny against the order of the Employment Appeal Tribunal dated 14th July 1997 dismissing her appeal against the Industrial Tribunal's decision to dismiss her complaints against her employers of unfair dismissal, wrongful dismissal and unlawful sex discrimination.

The facts.

Since the decision of the Employment Appeal Tribunal is reported at (1997) ICR 1007, I can state matters quite shortly. Mrs Halfpenny, whom I may simply call the employee, commenced employment with IGE Medical Systems Ltd (the employers) in June 1988 and in time became the Regional Administrator and "lynch-pin" of their Cheshire office. She became pregnant in the summer of 1994. It was a difficult pregnancy and its complications forced her to take paid sick leave in August 1994. Her contractual entitlement to paid sick leave was thirty weeks in any twelve month period. She remained unfit to return to work. In February 1995, having by then completed more than two years continuous employment, she gave proper notice that she intended to exercise her right to return to work at the expiration of twenty-nine weeks from the birth of her baby, which happy event was celebrated on 5th April 1995. Her entitlement to statutory maternity leave was triggered on 6th March 1995. She was then in receipt of maternity pay until 10th July 1995. In September 1995 she informed her employers that she intended to return to work at the end of the period of extended maternity absence, which, they later told her, would be 30th October 1995. On 13th October, she sought to delay her return to work on the grounds of her ill-health, submitting a medical certificate to confirm that she was suffering from post-natal depression. Her employers were sympathetic and agreed to extend her "leave", informing her that she still retained her right to return to work up until 27th November. She remained unwell and wrote expressing her concern that her depressive illness would delay her return beyond that date. She asked for clarification of her entitlement to return to her job. On 13th November the employers replied:-

"As stated in my previous letter, you are legally entitled to extend your maternity leave by four weeks for medical reasons which takes you to 27th November 1995. The Company is not legally obliged to hold your job open after this date, and has regretfully taken the decision that it is unable to do so."

She replied on 24th November:-

"Whilst I realise that my maternity leave could be only extended by four weeks, I hope the Company would be more lenient in these exceptional circumstances. I am still under my Doctor for treatment and hope that I will recover as soon as possible. I would be grateful if you could write to me with your comments."

She did not attend for work on 27th November. Two days later the employers wrote to her:-

"You have been absent from work since 13th August 1994 taking into account your sick leave prior to maternity leave. As the Company has already fulfilled its legal obligation by extending your maternity leave by four weeks on medical grounds, we feel unable to prolong your leave for an additional period of time, and regrettably the contents of our letter dated the 13th November 1995 will still stand."

Despite her pleas and entreaties, written and oral, the employers were unrelenting and they declined to take her back into employment.

Her claims.

The Industrial Tribunal dismissed all of her claims. In summary they held that she was not dismissed by the employer's refusal to extend her leave for the second time, but that her employment terminated on the cessation of the receipt of maternity pay on 7th July 1995. Her claim in respect of sex-discrimination by their less favourable treatment of her compared with a male employee who had been permitted to remain off work on sick leave for over a year failed because she was not an employee at the time she was dismissed or suffered the detriment of which she complained.

The Employment Appeal Tribunal reversed the findings as to the date of termination because it was and always had been common ground that the contract continued until 27th November and no one had contended that termination of the contract was linked to the ending of the receipt of maternity pay. They held that the contract was put in suspense and that upon the employee's failure to exercise her right to return, the contract of employment came to an end by implied agreement not by any act of termination by the employers. Accordingly she was not entitled to any relief at all.

Mummery L.J. gave leave to appeal which Mrs Halfpenny now brings with the support of the Equal Opportunities Commission.

The issues.

The appeal gives rise to a number of difficult questions, including when and how the employment terminates in the case of a pregnant employee who takes maternity leave, exercises her right to return to work at a later time but is then prevented by a postnatal depression or other illness from actually attending for work on the expiration of that extended period. If she was dismissed, was the dismissal automatically unfair? What is the extent of the protection afforded to women as regards pregnancy and maternity deriving from the Sex Discrimination Act 1975 and the Equal Treatment Directive 76/207/EEC?

These are fundamental questions which must affect many employers and employees but there are no easy answers. I would not begin my search for the solutions without repeating my agreement and sympathy with the observations of the Industrial Tribunal that "the law on maternity leave is notoriously complex, (and) is fraught with pitfalls for the employee". The Employment Appeal Tribunal justifiably complained, as other distinguished judges have done in the past, that the law has become too complicated in " an important area where employers and their female staff need to know where they stand." It is surely not too much to ask of the legislature that those who have to grapple with this topic should not have to have a wet towel around their heads as the single most important aid to the understanding of their rights.

The statutory background.

With relief, therefore, I adopt the approach of the Employment Appeal Tribunal who said:-

"We shall not burden this judgment with various statutory requirements which the appellant was required to comply with in order to exercise her statutory right to return to work following her confinement. Quite simply, she cleared all the hurdles ..."

It is, however, necessary to set out the statutory scheme in broad terms. When the matter came before the Industrial Tribunal the Employment Protection (Consolidation) Act 1978 (the 1978 Act) was in force. That has now been replaced by the Employment Rights Act 1996 (the 1996 Act). I am assured by counsel that the provisions are substantially the same in their effect, though not perhaps identical, and it may be more helpful to those who have to grapple with the law if I were to refer to the current provisions and note the older sections in parenthesis only.

Part V111 (Part 111) deals with "MATERNITY RIGHTS", the first of which is a "General right to maternity leave", defined as follows:-

"71 (s. 33) General right to maternity leave

(1) An employee who is absent from work at any time during her maternity leave period is (subject to sections 74 & 75 (ss. 36 & 37)) entitled to the benefit of the terms and conditions of employment which would have been applicable to her if she had not been absent (and had not been pregnant or given birth to a child).

(2) Subsection (1) does not confer any entitlement to remuneration."

Section 72 (s. 34) provides for the commencement of the maternity leave period and section 73 (s. 35) its duration defined to be a period of 14 weeks from its commencement or until the birth of the child, if later. There follow in sections 74, 75 and 76 (ss. 36. 37 and 37A) the complicated provisions for the employee's giving the relevant notices of commencement, pregnancy and early return. Section 78 (s. 38A) deals with contractual rights to maternity leave as follows:-

"78(1) An employee who has both the right to maternity leave under section 71 and another right to maternity leave (under a contract of employment or otherwise) may not exercise the two rights separately but may, in taking maternity leave, take advantage of whichever right is, in any particular respect, the more favourable.

(2) The provisions of sections 72 to 77 apply, subject to any modification necessary to give effect to any more favourable contractual terms, to the exercise of the composite right described in subsection (1) as they apply to the exercise of the right under section 71."

That concludes the group of sections dealing with the "general right to maternity leave."

The next heading is, "Right to return to work." This right, with which we are concerned, is defined in section 79 (s. 39) as follows:-

"79 Right to return to work

(1) An employee who -

(a) has the right conferred by section 71, and

(b) has, at the beginning of the eleventh week before the expected week of childbirth, been continuously employed for a period of not less than two years,

also has the right to return to work at any time during the period beginning at the end of her maternity leave period and ending twenty-nine weeks after the beginning of the week in which childbirth occurs.

(2) An employee's right to return to work under this section is the right to return to work with the person who was her employer before the end of her maternity leave period, or (where appropriate) his successor, in the job in which she was then employed -

(a) on terms and conditions as to remuneration not less favourable than those which would have been applicable to her had she not been absent from work at any time since the commencement of her maternity leave period,

(b) with her seniority, pension rights and similar rights as they would have been if the period or periods of her employment prior to the end of her maternity leave period were continuous with her employment following her return to work..., and

(c) otherwise on terms and conditions not less favourable than those which would have been applicable to her had she not been absent from work after the end of her maternity leave period."

Section 80 (s. 40) provides that an employee who wishes to exercise this right to return must notify her employer of her intention to do so at the same time as she notifies the employer of her pregnancy and claims maternity leave.

Section 82 (s. 42) prescribes the manner in which the right to return is to be exercised, namely:-

"(1) An employee shall exercise the right conferred by section 79 by giving written notice to the employer...at least twenty-one days before the day on which she proposes to return of her proposal to return on that day (the "notified day of return")."

She is entitled under section 82(3) (s. 42(3)) to postpone her return to work until a date not more than 4 weeks after the notified day after return if she gives the employer a doctor's certificate stating that by reason of disease or bodily or mental disablement she will be incapable of work on the notified day of return or the end of the 29 week period. She may exercise this right only once. Section 85 (s. 44) deals with any contractual right she may have to return and, in a similar way to section 78 (s. 38A) allows her to take advantage of whichever right, statutory or contractual, is the more favourable.

Part 1X deals with the termination of employment but I need not deal with its provisions and part X (part V) deals with "UNFAIR DISMISSAL".

Section 94 (s.54) gives the employee the right not to be unfairly dismissed by his employer. Section 95 (s.55) sets out the circumstances in which an employee is dismissed namely, for present purposes, if the contract under which he is employed is terminated by the employer (whether with or without notice). Section 96 (s.56) is very material in this appeal. It provides as follows:-

"96 Failure to permit return after childbirth treated as dismissal.

(1) Where an employee who -

(a) has the right conferred by section 79, and

(b) has exercised it in accordance with section 82,

is not permitted to return to work, she shall (subject to the following provisions of this section) be taken for the purposes this Part to be dismissed for the reason for which she was not permitted to return with effect from the notified day of return (being deemed to have been continuously employed until that date)."

Section 56 of the 1978 Act was expressed in slightly different terms, namely:-

"Where an employee has the right to return to work under section 39 and has exercised it in accordance with section 42 but is not permitted to return to work, then (subject to section 56A) she shall be treated for the purposes of this part as if she had been employed until the notified day of return, and, if she would not otherwise be so treated, as having been continuously employed until that day, and as if she had been dismissed with effect from that day for the reason for which she was not permitted to return."

Section 97 (s.55) prescribes the effective date of termination and under subsection 6:-

"Where an employee is taken to be dismissed for the purposes of this Part by virtue of section 96, references in this Part to the effective date of termination are to the notified date of return."

Section 98 (s. 57) prescribes when the dismissal is to be regarded as fair or unfair and its terms are familiar enough not to need repetition here. More pertinent for present purposes is section 99 (s. 60) dealing with "pregnancy and childbirth" which provides as follows:-

"(1) An employee who is dismissed shall be regarded for the purposes of this part as unfairly dismissed if -

(a) the reason (or, if more than one, the principal reason) for the dismissal is the is that she is pregnant for any other reason connected with her pregnancy,

(b) her maternity leave period is ended by the dismissal and the reason (or, if more than one, the principal reason) for the dismissal is that she has given birth to a child or any other reason connected with her having given birth to a child,

(c) her contract of employment is terminated after the end of her maternity leave period and the reason (or if more than one) the principal reason) for the dismissal is that she took, or availed herself of the benefits of maternity leave,

...

(2) For the purposes of subsection (1)(c) -

(a) A woman takes maternity leave if she is absent from work during her maternity leave period, and

(b) a woman avails herself of the benefits of maternity leave if, during her maternity leave period, she avails herself of the benefit of any of the terms and conditions of her employment preserved by section 71 during that period."

I turn to the Sex Discrimination Act 1975. Section 1 provides:-

"(1) A person discriminates against a woman in any circumstances relevant for the purposes of any provision of this Act if -

(a) on the ground of her sex he treats her less favourably than he treats or would treat a man.

...

5(3) A comparison of the cases of persons of different sex or marital status under section 1(1)...must be such that the relevant circumstances in the one case are the same, or not materially different, in the other.

6(2) It is unlawful for a person, in the case of a woman employed by him at an establishment in Great Britain, to discriminate against her -

....

(b) by dismissing her, or subjecting her to any other detriment."

The Tribunals' decisions.

I must now set out the Tribunals' reasons in more detail. Dealing with the claim for unfair dismissal, the Industrial Tribunal found as follows:-

"10. ... There are now, in fact, two periods of maternity leave: the basic 14 weeks, to which all employees are entitled under section 33, and the extended period under section 39, available only to employees with two or more years' service. This allows the right to return to work within 29 weeks of the week of the baby's birth, and can be extended by a further 4 weeks thereafter if the employee is incapable of work through ill-health (section 42(3)).

...

12. The Tribunal had difficulty in deciding whether the applicant's contract of employment continued during her extended maternity leave, and the matter was not argued before them. Applying the reasoning in Crouch -v- Kidson Impey (supra) ([1996] IRLR 79) and looking at all the facts, they conclude that applicant's contract did not extend beyond the payment of maternity pay, so that in the latter part of her maternity leave she had the bare right to return. The employer made it clear that he was following the statutory provisions, and there was no evidence before the Tribunal of a contractual right to maternity leave, other than the extension by a few day of the statutory period.

13. The applicant was informed by the respondent that her job was no longer open after she failed to return 4 weeks after the end of the 29 week period. The respondent cannot be held to have dismissed the applicant under s. 56 because she did not exercise her right to return to work. He cannot have dismissed her under s. 55 because at the relevant date the applicant was no longer employed under a contract of employment.

...

17. The Tribunal concludes, therefore, that there was no dismissal under the EPCA 1978, and no possibility of a complaint of unfair dismissal."

So far as the claim for wrongful dismissal was concerned the finding was this:-

"18. ... However, it follows from what has already been said about the demise of the contract of employment that the applicant cannot sue for breach of contract. Her contract terminated by mutual agreement at the expiry of the maternity period."

When dealing with the claim based on sex discrimination, the Tribunal referred to the employee's entitlement to 30 weeks' sick pay in any 12 month period which would only be extended by agreement in the most exceptional circumstances. She compared herself with a male employee working from the same office who had been absent by reason of ill health for over a year and during that time had been given a series of review dates when medical evidence about his bad back was sought. The Tribunal found:-

"27. The applicant's case differs from Hertz (Hertz -v- Aldi [1991] IRLR 27)" (also reported at [1992] ICR 332), "in that she did not return to work at the end of her leave. If she had done so, even for a day, the Tribunal would be bound by the authority of the Hertz case to hold that the respondent had unlawfully discriminated against her in that it made no attempt to procure medical evidence as to the likelihood of her returning to work, and refused to allow her the paid sick leave to which she was contractually entitled, as they would have done with a man, as evidenced by the treatment of (the male comparator).

...

29. Mrs Halfpenny did not return to work at the end of the protected period. Does this exclude her from the Hertz case? The Tribunal considers that a law which makes a distinction between an employee who returned to work for a day, and one who never returned, would be open to criticism, but in this area of law rights have been strictly construed. Reference must again be made to Kelly -v-Liverpool Maritime Terminals [1988] IRLR 310, a decision of the Court of Appeal where an employee who was unable to return at the end of extended maternity leave but sent in medical certificates was held not to have been unfairly dismissed.

31. ...

(i) Section 6(2) of the Sex Discrimination Act prohibits discrimination by an employee in the case of a woman employed by him at an establishment in Great Britain. For the reasons set out supra Mrs Halfpenny was not employed by the respondent after her maternity pay had expired. She had a right to return to work under the statutory provisions but she had no contract of employment. Only if she had returned, and her contract had then been revived, would she have been able to claim the protection of section 6.

(ii) Section 6 prohibits discrimination which leads to dismissal, or some other detriment. The Tribunal has already decided that Mrs Halfpenny was not dismissed. If the word "detriment" is read in context it implies some harmful consequence short of dismissal. On the other hand, the procedure which leads to an eventual dismissal may be regarded as a detriment within section 6 (Clarke -v- Eley (EMI) Kynoch Ltd [1983] ICR 165). The detriment of which the applicant complains is the failure to give her extended sick leave, but the consequence of that failure was the loss of employment. Even that is not strictly true, since the applicant only had a bare right to return, not the right to be treated as an employee during the period of leave, and the respondent did not deprive her of this. The only real detriment was the alleged dismissal, and the applicant was not dismissed.

...

33. Therefore, the Tribunal concludes that the applicant's complaint of unlawful sex discrimination must fail, because she did not return to work at the end of her extended maternity leave. The Tribunal is, however, unhappy that this result depends on the absence of a contract of employment, when in other cases the contract has been held to survive, and the applicant's failure to return for even one day at the end of her leave. They have been influenced by the restrictive interpretation placed on the maternity rights legislation by UK courts, and by a reluctance to drive a coach and horses through the extended leave provisions of the EPCA by sweeping aside the need for a woman to return to work within 4 weeks of the end of the 29 week period. A compromise would be to regard the submission of sick notes as sufficient to constitute a return, but the Tribunal is bound by the Court of Appeal decision in the Kelly case to hold that a physical return is necessary."

The Employment Appeal Tribunal dismissed the appeal against that decision essentially on these grounds set out at [1997] ICR 1007:-

(At p. 1011H) "(1) It is clear on the current state of the authorities that an employee wishing to exercise her statutory right to return to work must physically do so on the notified date, here 27th November 1995. See Kelly -v- Maritime Terminals Ltd [1988] IRLR 310. Sending a sick note, or even attending at her place of work for the purpose of handing in a sick note on the notified day of return, will not preserve her right to resume work at a later date."

(At p. 1012B) "(2) The consequence is she cannot claim a deemed dismissal under section 96 because she has not properly exercised the right to return to work and it cannot be said that the employer has not permitted her to return to work."

(p. 1013D) "...we feel bound to conclude, on authority, that assuming the contract continued until 27 November 1995 it then came to an end other than by dismissal. It remained on foot solely for the purpose of allowing the appellant to exercise her statutory right to return. When she failed to do so, and in the absence of express or implied agreement to extend it, it came to an end not by any act of termination by the respondent but by the appellant's failure to exercise her right to return. To find otherwise would be to render the respondent liable to the appellant for complying strictly with their statutory obligations. That cannot be right.

It may be said that such a result is a harsh one; the appellant wished to return but was prevented from doing so by illness and is left with no redress. However, that is the inevitable effect of the statutory provisions."

The termination of the contract of employment: dismissal?

This is the key issue in the appeal. Since the decision of the Employment Appeal Tribunal, this court has taken the opportunity to clarify matters considerably: see Kwik Save Stores Ltd -v- Greaves [1998] IRLR 245 (decided on 27 February 1998). There, as here, the employees had given the appropriate notices to obtain the right to return to work and of their intention to exercise it. The court held:-

(At paragraph 65) "However, to benefit from the right to return to work they had to exercise that right. The provisions relating to the exercise of the right to return to work in s.42 do not expressly require an actual return to work, an actual presence at work on the notified day of return, for the exercise of the right to be complete and effective. They do not expressly state that the right will be terminated, divested or avoided by the employee's non-attendance at work. ...

In the ordinary way, no doubt, an employee should be ready and willing to work on the notified date of return, if she has no legitimate excuse for not doing so, in order to avoid the risk of dismissal for absence from work and for being unavailable to perform work in accordance with the express or implied contractual obligation. Absence from work by any employee without good reason can amount to conduct on the part of the employee which constitutes a potentially fair reason for dismissal under s.57(2) of the 1978 Act." ...

(At paragraph 67) "The critical point is that the process of exercising the right to return to work is complete before the notified date of return actually arrives. It is complete once the appropriate notices have been given for the notified day of return." ...

(At paragraph 68) "As the reason given by the employer for failing to permit (the employees) to return to work was they had not exercised their right to return to work when in fact they had, the contract of employment was deemed by s.56 to have continued in force, even if it had terminated according to its contractual terms. It is also deemed by s.56 to be in existence for all other relevant purposes, such as a period of continuous employment and the continuity of that employment. The result of the application of s.56 is that both must be treated as dismissed for the reason that the employer failed to permit them to return to work." ...

(At paragraph 82) "If the only justification that an employer can give for its undisputed conduct is that it has the law wrong, then that is not a basis for saying that the dismissal was other than unfair."

We were informed that leave to appeal to the House of Lords had been granted but that the appeal would not proceed. Whilst, therefore, Mr Nicholls accepted that the case was binding upon us, he reserved the right to challenge its correctness if this case were to go further. For present purposes he accepts that in the light of this authority, he can no longer support the decisions of the Tribunals below. Consequently we must find in respect of the claim for unfair dismissal that, pursuant to section 96 (s.56), the employee was dismissed on 27th November, being deemed to have been continuously employed until that date.

In case there was to be a further appeal, Ms Cox Q.C., for the appellant, wished us to rule on her submissions that if, as was suggested in the correspondence, the employee had broken her contract of employment by being unable to return to work at the end of her maternity leave, then that was a repudiation of the contract by her and by not allowing her to return after that date, the employer accepted the repudiation and so dismissed the employee: see London Transport Executive -v- Clarke [1981] ICR 355. Alternatively she submitted that if the employee's failure actually to return to work was not a breach of her contract, then it was the employer's decision not to allow her to return which terminated the contract and was a dismissal. In any event, she relied on these submissions to support the employee's separate claim for wrongful dismissal if that claim was not to be decided in the same way as Kwik Save.

Mr Nicholls pointed out that the deeming provisions of section 96 (s.56) applied only "for the purposes of this Part" of the Act, i.e. to unfair dismissal. He submitted it had no application to questions of wrongful dismissal which were governed by ordinary principles of contract law. He contended that during the employee's period of extended maternity absence, she had no more than the right to return at the end of that period of absence. She was not required to work nor entitled to pay. The contract existed only to provide a right to return. If the employee returned to work in accordance with that right, the contract revived. If she failed to do so, it did not. When she failed to exercise her right, the contract came to an end. It ended not by dismissal but because the employee had failed to exercise the right so as to put the contract back on foot. He referred to McKnight -v- Adlestones (Jewellers) Ltd [1984] IRLR 453 and Kelly -v- Liverpool Maritime Terminals Ltd [1988] IRLR 310. He pointed out that in both those cases, (as in the other cases referred by the Tribunals such as Hilton International Hotels -v- Kaissi [1994] I.C.R. 578 and Crouch -v- Kidsons Impey [1996] IRLR 79), there was no proper acquisition and/or no proper exercise of the right to return to work.

So the question arises for the first time in this appeal: what is the position when the employee has followed the statutory scheme?

In my judgment this statutory right to return to work is superimposed upon the contract of employment. The right is dealt with in a quite separate Part of the Act conferring maternity rights. It is an employment right. It is independent of another such right in another Part of the Act, namely the right not to be unfairly dismissed. It does not depend upon the agreement of the parties. If there are contractual rights to maternity leave and to a later return to work, then sections 79 and 85 provide for the modifications to be made as may be necessary to give effect to the more favourable provision. Here there were no effective contractual terms. Thus in this case, the employee's rights are governed entirely by the statute.

In Kwik Save the court determined how the statutory right to return was to be exercised, and held that the exercise of the right was completed by the giving of the appropriate notice at the appropriate time. Proper notice, not actual return to work nor actual presence at work on the notified day made the exercise of the right complete and effective. Mrs Halfpenny did give proper notice. If the right is exercised, it must, in my judgment, take effect both with regard to her contractual position as well as her statutory position.

I agree with the view expressed in McKnight -v- Adlestones (Jewellers) Ltd that pending the exercise of the right to return to work, the contract is suspended. That was also the view of Mummery J. giving the judgment of the Employment Appeal Tribunal in Hilton Hotels Ltd -v- Kaissi [1994] I.C.R. 578, 586H:-

"The contract of employment may continue to subsist, even though the obligation to perform the main terms of the contract may be suspended while the employee is on maternity leave, e.g. the obligation of the employer to pay remuneration and the obligation of the employee to work: see, for example, Institute of the Motor Industry -v- Harvey [1992] I.C.R. 470. Depending on the express or implied terms of the contract and the circumstances of the case, the suspension of the obligations may be brought to an end by the employee's exercise of her right to return. If, however, the employee does not attempt to exercise the statutory right to return or fails to exercise it effectively, it may be held that the whole basis for the continuation of the contract as contemplated by the parties, would go and the contract would automatically determine in accordance with the implied agreement of the parties: see McKnight -v- Adlestones (Jewellers) Ltd [1994] IRLR 453, 454/455."

To have contractual rights in suspense is not unknown. For example, in his well known speech in Hughes -v- Metropolitan Ry. (1877) 2 App. Cas. 439,448, Lord Cairns described the effects of promissory estoppel where one contracting party had led the other to suppose that "the strict rights arising under the contract will not be enforced, or will be kept in suspense, or held in abeyance" - my emphasis added.

It seems to me, therefore, that on the employee's giving the proper statutory notice, her statutory right to return to work crystallised and the contract of employment with all its benefits and burdens revived by virtue of section 79(2). To all intents and purposes, she was restored to her job on terms and conditions not less favourable than would have been applicable to her had she not been absent from work after the end of her maternity leave period. Consequently whether or not the employee would be in breach of the terms of the revived contract by failing to attend for work, would depend upon the terms of her employment and the reason for her non-attendance. Here it accepted that she did not attend for reasons of ill-health supported by a medical certificate. As she had not exhausted her contractual entitlement to sick leave, her employers had no lawful reason to dismiss her. Yet by their letter dated 29th November they did so. In my judgment that was a wrongful dismissal entitling the employee to damages.

It follows, however, that the date of dismissal for the purposes of her contractual claim for damages for wrongful dismissal is 29th November 1995. I am aware that this is not the date which has been, indeed which has to be, accepted as the date of dismissal for the purposes of the claim for unfair dismissal. That is the consequence of section 96. Those deeming provisions apply only for the purpose of unfair dismissal and determine the effective date of termination for the purposes of that part of the Act. That there are different dates of termination for the different claims is an unsatisfactory anomaly but is entirely due to the deeming provisions of section 96.

In other respects there does not appear to be a substantial difference between the operation of Part VIII conferring the maternity rights and the deeming provisions of section 96 in Part X. The deemed continuous employment in section 96(1) is not essentially different from the continuity of employment envisaged by section 79 (2) as the consequence of the exercise of the right to return to work. Moreover section 96 is principally concerned with classifying the reason for dismissal and for determining the effective date of termination for unfair dismissal purposes, matters with which Part VIII is not concerned.

So far as the Sex Discrimination Act is concerned, section 6(2) applies "in the case of a woman employed by (a person)" if that person discriminates by dismissing her, or subjecting her to any other detriment. Thus two matters need to be established: firstly; which is my present concern, was the applicant employed by the respondent at the time of the discrimination, and secondly, the act of discrimination itself. Ms Cox Q.C. submitted that the provisions of section 96 of the Employment Rights Act 1996 are to be incorporated into section 6 of the Sex Discrimination Act 1975 or alternatively that section 6 is to be interpreted as if they were. In support of that argument, she contended that the Sex Discrimination Act is the domestic implementation of the United Kingdom's obligations under the Equal Treatment Directive 76/207, and so it is necessary to interpret that Act harmoniously with the provisions of the Employment Rights Act which give maternity rights and protection to women. I cannot accept that broad submission. It is, in any event, unnecessary to do so. "Employed" must be given its ordinary meaning. She needs to show employment under an existing contract of employment which has not yet terminated. The answer is the same as the answer to the claim for wrongful (as opposed to unfair) dismissal. For the reasons set out above, the employee was certainly employed as soon as she exercised her right to return. Moreover the employer would not in my judgment be permitted to contend that she was not employed for these purposes if she were lawfully absent pursuant to Part VIII of the 1996 Act, her right to return were extant and her contract of employment were in suspense or abeyance pending the exercise of that right. She was dismissed at common law at the later date by the letter of 29th November. If she was less favourably treated than a man in that dismissal, she is entitled to relief under the Sex Discrimination Act.

The unfairness of the dismissal.

The reason given by the employers was that they were not legally obliged to hold the employment open for her after the expiration of her extended maternity absence. Kwik Save decided that the employers were wrong to take that stance. That case is also authority for the proposition that such a wrong reason for dismissal cannot be other than unfair and Mr Nicholls concedes as much. Consequently the appeal against the dismissal of her claims for unfair dismissal must be allowed and the matter remitted to the Industrial Tribunal for the determination of the relief to which she is entitled.

In case this case should go further, Ms Cox. invites us to decide her alternative claim that the dismissal was automatically unfair under section 99 (1)(c) (s.60(1)(c)).

The issue is whether or not the employee was dismissed because she took or availed herself of the benefits of maternity leave. The first question is what is meant by "maternity leave". By section 235 (1) "maternity leave period" is to be construed in accordance with section 72 and 73 and consequently it seems to me that "maternity leave" as such must be interpreted accordingly. Indeed section 99(2)(a) says as much. In my judgment it must be confined to the period of 14 weeks and it does not include the longer period of 29 weeks after childbirth during which she may have the right to return to work. I readily understand that during the latter period she may be said to have been on unpaid leave of absence and in colloquial, and ex hypothesi loose speech, she was on maternity leave. In the decisions in the Tribunals below, the two periods are conflated as a period of maternity leave. But in the scheme of the Act they quite different. The rights given to the employee under section 71 (s.33) are to the benefits of the terms and conditions of employment which would have been applicable to her if she had not been absent whereas the right to return to work is no more than that.

The second question which arises is whether the section should be given the wide interpretation for which the appellant contends. She submits that the reason why the employer were not prepared to grant her sick leave was because of the extended time she was absent on maternity leave. So it is submitted that she was dismissed because she took or availed herself of the benefits of that maternity leave. This broad interpretation is necessary because the purpose of section 99 (1) (c) is said to be to prevent dismissal in retaliation for taking or availing of maternity leave. I prefer Mr Nicholls' submission that the only reason for dismissal i.e. the set of beliefs operating on the employers' mind at the time, was the employee's failure to return to work when she should have done. If she had returned to work, her employment would have continued. Her having taken and availed herself of the benefits of her maternity leave this was not the reason for her dismissal.

The unlawful sex discrimination.

The Tribunals rejected this claim because they concluded that the employee was not employed at the time of the discrimination. They distinguished Hertz -v- Aldi [1992] ICR 332, to give this case a more manageable name than Handels-Og Kontorfunktionaerernes Forbund i Denmark -v- Dansk Arbejdsgiverforening. They did so on the basis that here the employee had, in their view, not returned to work. The facts of that case were that the employee had spent most of her pregnancy on sick leave, returned to work on the expiry of her maternity leave but thereafter took a further 100 days sick leave due to illness arising as a result of pregnancy. The employers thereupon dismissed her on the ground that it was company policy to terminate the contracts of employees who were frequently absent owing to illness. She asserted that her dismissal was in breach of the Equal Treatment Directive 76/207. The European Court held :-

"15. The directive does not envisage the case of an illness attributable to pregnancy or confinement. It does, however, admit of national provisions guaranteeing women specific rights on account of pregnancy and maternity, such as maternity leave. During the maternity leave accorded to her pursuant to national law a woman is accordingly protected against dismissal due to absence. It is for every member state to fix periods of maternity leave in such a way as to enable female workers to absent themselves during the period in which the disorders inherent in pregnancy and confinement occur.

16. In the case of an illness manifesting itself after the maternity leave, there is no reason to distinguish an illness attributable to pregnancy or confinement from any other illness. Such a pathological condition is therefore covered by the general rules applicable in the event of illness."

This, and a reference to Brown -v- Rentokil Ltd. [1998] I.C.R. 410, gave rise to some debate initiated by us during the course of the hearing as to the length of the special protection pregnant woman should enjoy by virtue of Article 2(3) which provides:-

"This Directive shall be without prejudice to provisions concerning the protection of women, particularly as regards pregnancy and maternity."

In the written submissions which we asked be supplied to us after the conclusion of hearing, Mr Nicholls submitted that the protected period was no more than the 14 weeks of statutory maternity leave available to every female employee and that it did not extend to end of the 29 weeks within which those who had been continuously employed for two years had the further right to return to work. Ms Cox Q.C. submitted that the protected period was whatever period the employee in question was entitled to be absent from work. She asked for the opportunity to address further oral submissions to the court on an issue which she and the Equal Opportunities Commission considered to be an important issue.

I agree this is an interesting and difficult question. In my judgment it is not, however, necessary to rule on the matter because I have concluded that the employee did exercise her right to return to work and therefore resumed her employment on 27th November even though she did not actually attend for work due to her illness. She was in exactly the same position as Mrs Hertz. She had, therefore, to show that she had not been treated as favourably as a man who was away from work because he had been given sick leave.

Because she had to overcome the finding of the Tribunal that the employee was not employed at the material time, Ms Cox faintly pursued an alternative submission based on Coote -v- Granada Hospitality Ltd. [1998] IRLR 656 where the employee was victimised after her employment had ended. Mr Nicholls may well be right to contend that Coote can be distinguished on the facts and also that the Sex Discrimination Act cannot be extended to former employees; but, once again, it is unnecessary to resolve this dispute in the light of my holding that Mrs Halfpenny was still employed when the discriminatory action was taken against her.

The Industrial Tribunal's findings in Paragraph 7 are that if the employee had returned to work at the end of leave, even for a day, then they would have been bound to hold that she had been unlawfully discriminated against in that the employers made no attempt to procure medical evidence as to the likelihood of her returning to work, and refused to allow her paid sick leave to which she was contractually entitled as they would have done with a man, as evidenced by the actual man with whom she sought to compare herself. That finding of unlawful discrimination is not and cannot be challenged.

In the result I am satisfied that the claim for unlawful sex discrimination is made out and the appeal should be allowed accordingly.

Conclusions.

In my judgment the appeals against the dismissal of each of her claims for unfair dismissal, wrongful dismissal and unlawful sex discrimination must be allowed. In each case the claim should be remitted to the Industrial Tribunal for the determination of the relief to which she is thus entitled.

Lord Justice Robert Walker: I agree.

Lord Justice Hirst: I also agree.

Order: appeal allowed with costs; matter remitted to the Industrial Tribunal; leave to appeal to the House of Lords granted.