England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL
(HIS HONOUR JUDGE BIRTLES,
MR D CHADWICK, and MR C EDWARDS)

		Royal Courts of Justice Strand London, WC2
		18th April 2005

1. LORD JUSTICE TUCKEY: Lord Justice Keene will give the first judgment.
2. LORD JUSTICE KEENE: This appeal raises a short but important point about the taking of parental leave by employees. Parental leave was introduced in December 1999 by Part III of the Maternity and Parental Leave etc Regulations 1999 ("the 1999 Regulations"), made under powers contained in the Employment Rights Act 1996 ("the 1996 Act"). In broad terms the 1999 Regulations confer a right to be absent from work in order to care for young children, so long as appropriate notice is given. Those regulations seek to implement in our domestic law the provisions of the European Council Directive No 96/34 on the framework agreement on parental leave, the purpose of that Directive being to put into effect the annexed framework agreement.
3. It is important to note at the outset two things. First, when such parental leave is taken by an employee it is unpaid leave, even though most other rights and obligations under the contract of employment persist during the period of leave (see regulation 17). Secondly, the 1999 Regulations envisage that provision will often be made for parental leave and its details in an employee's contract of employment as a result of a collective agreement or a workforce agreement. But for situations where there are no such arrangements in place as a result of a collective or workplace agreement, those Regulations set out default provisions in Schedule 2 (see regulation 16). This appeal is concerned with what happens under those default provisions.
4. The facts can be summarised quite shortly. The appellant, Mr Rodway, had been employed by the respondent since 1984. By the time this dispute arose he was working for the respondent as a train guard conductor. He had a two-year old son by his former partner, the son not living with him but with his former partner. However, because of her commitments he wished to look after his son on Saturday 26th July 2003. He applied in advance on 5th July for a day's parental leave on 26th July. The respondent did not reply until the 24th of that month, when the appellant was told that he could not take such leave on 26th July because his job could not be covered. He sought to speak to a manager, but without success. On 26th July he did not come to work, but spent the day caring for his son. Disciplinary proceedings against him then followed, resulting eventually in him being given a formal warning.
5. The appellant then brought a complaint in an employment tribunal under section 47C of the 1996 Act. That section gives an employee the right not to be subjected to any detriment by any act by his employer done for a prescribed reason. "Prescribed reason" includes, by virtue of regulation 19(2)(e) of the 1999 Regulations, that the employee:

"took or sought to take- ...

(ii) parental leave."

6. There is no dispute that the appellant was subjected to a detriment. The issue as it now is whether he was entitled to take only one day's parental leave on 26th July 2003. If he was not so entitled, then it is agreed that he has no claim under section 47C. If he was entitled, then his claim succeeds.
7. The Employment Tribunal, in a careful and thoughtful decision, held that he was so entitled and it awarded him £750 compensation. That decision was reversed by a majority decision of the Employment Appeal Tribunal ("the EAT"), presided over by His Honour Judge Birtles who was part of the majority.
8. There is no dispute that the appellant was a person entitled in general terms under the 1999 Regulations to seek parental leave, and that he had complied with the procedural requirements set out in those regulations. What is in dispute is whether under the default provisions in Schedule 2 he was entitled to take just one day's parental leave, or whether such leave can only be taken for a minimum of one week or in blocks of weeks. To decide this issue it is necessary to look at the provisions of the 1999 Regulations in more detail.
9. "Parental leave" is defined by regulation 2(1) as meaning "leave under regulation 13(1)". That latter regulation provides by paragraph 1 as follows:

"An employee who -

(a) has been continuously employed for a period of not less than a year or is to be treated as having been so employed by virtue of paragraph (1A); and

(b) has, or expects to have, responsibility for a child,

is entitled, in accordance with these Regulations, to be absent from work on parental leave for the purpose of caring for that child."

10. Regulation 14 is headed "Extent of entitlement" and provides that except where the child is entitled to a disability living allowance, an employee is entitled, an employee is entitled to 13 weeks' leave in respect of any individual child.
11. That 13 weeks' entitlement is not per annum but the total amount of entitlement in respect of that one child, to be taken in most cases up to the date of the child's fifth birthday. Under the default regime there is a maximum of four weeks' leave available in any one year in respect of an individual child (see Schedule 2, paragraph 8).
12. Regulation 14 continues as follows:

"(2) Where the period for which an employee is normally required, under his contract of employment, to work in the course of a week does not vary, a week's leave for the employee is a period of absence from work which is equal in duration to the period for which he is normally required to work.

(3) Where the period for which an employee is normally required, under his contact of employment, to work in the course of a week varies from week to week or over a longer period, or where he is normally required under his contract to work in some weeks but not in others, a week's leave for the employee is a period of absence from work which is equal in duration to the period calculated by dividing the total of the periods for which he is normally to required to work in a year by 52.

(4) Where an employee takes leave in periods shorter than the period which constitutes, for him, a week's leave under whichever of paragraphs (2) and (3) is applicable in his case, he completes a week's leave when the aggregate of the periods of leave he has taken equals the period constituting a week's leave for him under the applicable paragraph."

13. Regulation 16 applies the default provisions in Schedule 2 where the employee's contract of employment:

"... does not include a provision which—

(a) confers an entitlement to absence from work for the purpose of caring for a child, and

(b) incorporates or operates by reference to all or part of a collective agreement or workforce agreement."

14. I need not set out any further parts of the main body of the 1999 Regulations. Before turning to Schedule 2 for the default provisions, it is worth noting that Schedule 1 deals with workforce agreements and how they are to be arrived at.
15. The default provisions in Schedule 2 begin by requiring an employee who wants to exercise his right to parental leave to give his employer notice, and to comply with any request by his employer to produce such evidence as may reasonably be required of his entitlement to parental leave. Such evidence is limited to evidence of his parental responsibility for the child, the child's date of birth and the child's entitlement to disability living allowance where that is relevant.
16. Paragraph 7 of these default provisions is central to this appeal. It reads as follows:

"An employee may not take parental leave in a period other than the period which constitutes a week's leave for him under regulation 14 or a multiple of that period, except in a case where the child in respect of whom leave is taken is entitled to a disability living allowance."

17. The Employment Tribunal took the view that that paragraph should be interpreted as if the word "take" meant "use their entitlement" to parental leave. In other words, an employee, in the view of the tribunal, could insist on taking such leave for less than a week, such as a day, but it would count as a week's entitlement towards the maximum of four weeks per annum and 13 weeks overall. The tribunal said that a purposive approach to interpretation should be adopted. It referred to the European Council Directive 96/34 and to part of the recitals thereof which refer to "allowing for better organising of working hours and greater flexibility" and to "reconciliation of work and family life". It saw those objectives as being undermined if a parent could not take less than a full week's parental leave.
18. The EAT, for its part, did not find the Directive to be of assistance in interpreting the precise language of the Regulations, given that the framework agreement leaves it to member states to define the detailed rules. In that connection see clause 2(3) of the framework agreement.
19. The EAT emphasised the heading to paragraph 7 of Schedule 2 of the Regulations, namely "Minimum periods of leave". It concluded that the words in that paragraph "in a period" in the phrase "parental leave in a period other than the period which constitutes a week's leave" did not mean "during a period" of a week but in effect "for a period" of a week. The minimum period of parental leave which could be taken under the default provisions was therefore a week's leave. Consequently the EAT reversed the employment tribunal's decision.
20. The appellant now advances a number of arguments as to why the EAT's conclusion should be rejected. First of all, Mr Hand QC, who appears for the appellant, draws our attention to the European Directive and the framework agreement, and the reference therein in the recitals to reconciling work and family life and to achieving greater flexibility. If one adopts a purposive approach to interpretation of the domestic regulations, then those aims are of relevance. Mr Hand also refers to clause 2(3)(e) in the framework, which speaks of an employer being able to postpone the grant of parental leave and makes no reference to refusing parental leave.
21. I should say that that last point does not seem to me to be a valid one. If an employee is as a matter of law not entitled to parental leave for the period of time requested, an employer must be able lawfully to refuse such a request. I see no significance in the omission in clause 2(3)(e) of the framework of any reference to refusal.
22. But the appellant also submits that regulation 14(4) of the 1999 Regulations is of relevance to the present issue. That envisages situations where parental leave is taken for a period of less than a week. Mr Hand stresses that regulation 14(4) provides for a process of aggregating periods of less than a week so as to equal a week's leave or more, and he submits that paragraph 7 of Schedule 2 has the same aggregating purpose. He criticises the EAT for seeking to confine regulation 14(4) to those with disabled children. Moreover, in his skeleton argument he observes that regulation 14(4) uses the same form of wording about taking leave "in periods" as one finds in paragraph 7 of Schedule 2 with its reference to "in a period".
23. For my part, I do not regard regulation 14(4) as being particularly significant. It has to be remembered, as Mr Hand fully recognised, that regulation 14 is dealing not only with what happens when there is no employer/employee agreement about parental leave (i.e. the default situation), but also with those cases where there is such a voluntary agreement. Where that latter situation exists, it is perfectly open to the parties to agree that parental leave can be taken in blocks of less than a week, such as a day or two days at a time. The Regulations, imposing as they do a maximum entitlement of 13 weeks' parental leave, had to make provision for how such shorter periods, if agreed, are to be treated for the purpose of that maximum entitlement. That is what regulation 14(4) does.
24. On that aspect, I am bound to say that I agree with Mr Hand that the EAT were wrong in seeking to confine regulation 14(4) to those with disabled children. Nonetheless, regulation 14(4) does not in my judgment otherwise assist the appellant. It is not intended to affect the meaning of paragraph 7 in the default provisions.
25. I would, however, add this. What regulation 14(4) does indicate is that the draftsman when using a phrase such as "in periods" or "in a period" does seem to be speaking of the length of time for which leave is taken on any occasion. He specifically refers in regulation 14(4) to an employee taking leave "in periods shorter than a week's leave", and it would seem that the word "in" was there being used in the way preferred by the EAT.
26. While Mr Hand supports the approach taken by the employment tribunal, he does not advocate changing the word "take" in the phrase "take parental leave" in paragraph 7 to "use their entitlement to", but he does submit that the effect of paragraph 7 is to allow the employee to take one day's parental leave, but for that then to be deemed to be taking a week's leave for the calculation of the employee's entitlement. The appellant's case is, as it was put at one stage, that the word "take" in paragraph 7 really amounts to "aggregate". This, it is argued, is the context and purpose of paragraph 7, a context of calculating entitlement, and that accords with the purpose of the Directive. The construction adopted by the EAT is said to offend against the purpose of the Directive and would result in an unbalanced situation, giving employers too much power.
27. The respondent in its skeleton argument, apart from generally supporting the reasoning of the EAT, submits that, if the appellant's interpretation of paragraph 7 were right, the paragraph should have been headed "exhaustion of leave entitlement", or words to that effect. Mr Andrew Clarke QC, who appears for the respondent, has emphasised the heading "Minimum periods of leave" to paragraph 7 which accords with the EAT's interpretation. His submission is that the natural meaning of the words in the paragraph is that leave must be taken in minimum blocks of one week, save where the child is disabled. The respondent contends that that interpretation does not offend the aims of the Directive, any more than does the appellant's interpretation. Mr Clarke points to the fact that on the latter interpretation an employee who wants only one day off work must use up a week's parental leave entitlement without actually having a week off work. That could moreover, it is said, lead to employers becoming less flexible in their behaviour by requiring employees who want to take an odd day off work for child care to take it as parental leave, and thus to use up a full week's entitlement rather than allowing compassionate leave or allowing it on a ad hoc basis.
28. Finally, Mr Clarke seeks leave to refer to two passages from Hansard, under the principles set out in Pepper v Hart [1993] AC 593, and Mr Hand does not resist that application. The two passages come from debates on the 1999 Regulations and both from speeches by the responsible government Minister.
29. In the first passage, which took place in the House of Commons Standing Committee debate on 2nd December 1999, the Minister for Competitiveness, Mr Alan Johnson, said:

"Apart from the exception of parents of children with special needs, other parents can take parental leave only in blocks of one week, which means that they have a week off."

He was there dealing in that passage with the default provisions where there has been no agreement with the employer.

30. In the House of Lords debates on the regulations on 9th December 1999 Lord Sainsbury of Turville, speaking for the Government, said this:

"Individual workplaces can come to their own arrangements about practical matters such as how much notice the employer should give, the circumstances when postponement may be acceptable and whether leave can be taken in single days or longer periods, or a mixture of these. This approach has been welcomed by both sides of industry.

Where agreements are not reached, then the fallback scheme will automatically apply, setting out a simple formula so employees will know how to exercise their rights. Under the fallback scheme, most parents will be able to take leave in blocks or multiples of one week, up to four weeks a year."

31. In effect, the respondent submits that the requirements of Pepper v Hart are met, assuming that paragraph 7 in Schedule 2 is seen as being ambiguous. These are ministerial statements and the statements, it is said, are clear.
32. I do not find any great assistance on the issue in this appeal from the European Directive. Of course it is seeking to enhance the rights of employees who have caring responsibilities for young children. But it recognises that there is a balance to be struck between the needs of those employees and the requirements of employers. The preamble expressly refers to the measures having to "take the needs of both the enterprises and the workers into account" (recital I(6)). It is also clear that the Directive and the framework leave it to each member state to deal with the details, so that the situation in each such state may be taken into account. Nor would it be particularly beneficial to the employee to have to lose a week's entitlement to parental leave when he takes only one day off work and works for the rest of the week.
33. I therefore return to the wording of paragraph 7 in Schedule 2 itself. Like the EAT, I see significance in the heading to that paragraph, namely "Minimum periods of leave", a phrase which has a clear meaning. Moreover, the words then used in paragraph 7 "an employee may not take parental leave in a period other than" a week should be interpreted in the same way as the phrase "in periods" is used in regulation 14(4) in the same regulations, and in that latter situation the phrase is undoubtedly referring to the length of time actually taken as leave. The appellant does not seek to dispute that.
34. Both those considerations to which I have just referred persuade me that the EAT was right in its construction, and it is a construction which would make practical sense in the default situation. One can readily see that employers might well prefer to be able to make arrangements for temporary employees to cover for a week during an employee's absence, rather than to face the problems arising from an employee being absent for a single day or two odd days. That is not so unbalanced a situation in the relationship between employer and employee in this default case as to cast doubt on the natural meaning of the words used in the Schedule.
35. I do not accept that the wording of paragraph 7 is ambiguous when the normal meaning of those words in paragraph 7 is adopted. Nor is there any sensible basis for reading the word "take" as if it said "aggregate". That would be a quite artificial interpretation. Regulation 14 by itself adequately deals with any appropriate aggregation process of shorter periods than a week. Paragraph 7 does not need to perform that function.
36. If, however, there were any ambiguity, then I would accept that the criteria set out in Pepper v Hart were met and I would in that situation have regard to the two ministerial statements. They seem to me to put the matter beyond any doubt.
37. For the reasons I have given, I would dismiss this appeal.
38. LORD JUSTICE LATHAM: I agree.
39. LORD JUSTICE TUCKEY: I also agree. Support for Lord Justice Keene's construction of paragraph 7 of Schedule 2 to the 1999 Regulations is also to be found in the explanatory note to the regulations which says:

"Schedule 2 to the Regulations sets out provisions requiring that the employer must be notified of any proposal to take parental leave and may postpone it for up to six months; it also provides that (except in the case of a child entitled to a disability living allowance) parental leave may not be taken in periods other than a week or a multiple of a week. These provisions apply only to employees who are not subject to a collective or workforce agreement relating to parental leave."

ORDER: Appeal dismissed with costs summarily assessed at £12,000, inclusive of VAT.

(Order not part of approved judgment)