United Kingdom Employment Appeal Tribunal

BAILII case number: [1995] UKEAT 687_94_1411

Appeal No. EAT/687/94

EMPOLYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 14 November 1995

Judgment delivered on 17 January 1996

THE HONOURABLE MR JUSTICE BUXTON

MR K M HACK JP

MISS A MADDOCKS OBE

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MRS V CARUANA          APPELLANT

MANCHESTER AIRPORT PLC          RESPONDENTS

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Transcript of Proceedings

JUDGMENT

Revised


 


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APPEARANCES

For the Appellant MR M RYDER

(of Counsel)

Legal Department

UNISON

1 Mabledon Place

London

WC1H 9AJ

For the Respondents MR J PARKIN

(of Counsel)

Slater Heelis

71 Princess Street

Manchester

M2 4HL


 


MR JUSTICE BUXTON: The applicant Mrs Caruana was first employed by the respondent on 1 July 1989 as a research assistant, under a contract that required her to work for 72 hours per month. Her work obligation under the contract was suspended between July 1990 and January 1991 to enable Mrs Caruana to complete a PhD thesis, we understand about the history of Manchester Airport, and therefore connected with her work for the employers. She returned to work in January 1991, we understand full-time, and was appointed Airport Archivist with effect from 1 July 1991. She continued in that position until her employment was terminated with effect from 31 December 1992. Mrs Caruana was not employed under a contract of employment, but as an independent sub-contractor. She did not seek that arrangement: it was required by the employer as part of what the Industrial Tribunal found to have been a cost-cutting exercise, that had entailed a moratorium on recruitment of employees. Mrs Caruana's most recent contracts had been, first, from 1 July to 29 December 1991, immediately on her appointment as Archivist; and then from 1 January to 31 December 1992. It was not suggested to the Industrial Tribunal or to us that there had been any practical break in the continuity of Mrs Caruana's employment.

The arrangements insisted on by the employer mean, as the Industrial Tribunal found at an earlier hearing, that Mrs Caruana cannot claim the protection of either the unfair dismissal or the redundancy legislation. However, she was clearly in "employment" with the respondents under the terms of section 82(1) of the Sex Discrimination Act 1975, under which provisions her claim was pursued before the Industrial Tribunal.

During 1992 Mrs Caruana became pregnant, and informed her employers of that fact on 17 July 1992. By a letter dated 16 November 1992 Mrs Caruana gave the employers notice of the commencement of her "maternity leave" on 11 December 1992; she stated that she would give notice of the date on which she intended to return to work, but no specific time at which she would again be available for work was indicated. On 3 December 1992 Mrs Caruana was told that her current twelve month contract would not be renewed. The Industrial Tribunal found that the employers, although having a high regard for Mrs Caruana as an extremely able and competent worker, decided not to renew her contract because she would not be available for work at the commencement of any such renewed contract in January 1993. Her complaint before the Industrial Tribunal was that she had been discriminated against on grounds of sex, in that the decision not to renew her contract or, more legalistically stated, not to offer her a new contract, was taken because she was pregnant.

In its decision the Industrial Tribunal cited various comments made by the representative of the employers responsible for dealing with Mrs Caruana's case, indicating that, as the Industrial Tribunal found in paragraph 31 of its decision, the employer's concern about Mrs Caruana's absence from work was expressed in the context of her expected confinement. The Industrial Tribunal however continued:

"We believe [the representative of the employers] when he tells us that he would have treated a man who would be absent in similar circumstances in the same way. We are satisfied that the applicant was not treated less favourably than a man would have been treated in like circumstances."

In reaching this conclusion the Industrial Tribunal had relied on the then ruling authority in the House of Lords, Webb v Emo Air Cargo Ltd [1993] 1 WLR 49, which the Tribunal correctly interpreted, at paragraph 28 of their decision, as holding that:

"to fail to renew the fixed term contract of an independent sub-contractor simply because she is pregnant would amount to unlawful direct discrimination. Where non-renewal is not simply because of her pregnancy but because of the consequence of her pregnancy, that is, because she would be unavailable for work at the critical period, we must make a comparison between the treatment afforded to a woman who would not be available for work by reason of expected confinement and a man would not have been available at the relevant time for medical or other reasons."

This issue is however governed by Directive 76/207/EEC, to the requirements of which the relevant domestic legislation, in this case sections 1(1)(a) and 5(3) of the Sex Discrimination Act 1975, must be assumed to conform. The implications of Directive 76/207/EEC for the unavailability for work of a female employee by reason of pregnancy have now been considered by the Court of Justice of the European Communities [the ECJ] in Case C-32/93 [1994] QB 718, a reference under Article 177 of the Treaty of the European Union of various questions arising in Webb v Emo; and further by the House of Lords in the restored case of Webb v Emo (No 2) [1995] 1 WLR 1454 that considered the ruling of the ECJ on the questions put to it.

The essence of the ECJ's ruling is that:

"[24] there can be no question of comparing the situation of a woman who finds herself incapable, by reason of pregnancy discovered very shortly after the conclusion of the employment contract, of performing the task for which she was recruited with that of a man similarly incapable for medical or other reasons.

[26]....dismissal of a pregnant woman recruited for an indefinite period cannot be justified on grounds relating to her inability to fulfil a fundamental condition of her employment contract....Any contrary interpretation would render ineffective the provisions of the Directive."

The ECJ's actual reply to the question referred to it by the House of Lords was that

"...Council Directive 76/207/EEC...precludes dismissal of an employee who is recruited for an unlimited term with a view, initially, to replacing another employee during the latter's maternity leave and who cannot do so because, shortly after her recruitment, she is herself found to be pregnant."

This reply made specific reference, as in somewhat different terms had the House of Lords' question, to the facts of Webb v Emo; though we have no doubt that, as the above citations from its judgment indicate, the ECJ sought to emphasise the much more general implications of Directive 76/207/EEC in cases of pregnancy.

It then fell to the House of Lords to state the implications of the ECJ's ruling for the English statutory provisions, a statement by which we are of course bound. Lord Keith of Kinkel, with whose speech and reasons all the other Lords specifically agreed, held that the relevant statutory provision was section 5(3) of the 1975 Act:

"A comparison of the cases of persons of different sex...under section 1(1) [providing it to be discrimination against a woman if on the ground of her sex she is treated less favourably than would be a man] must be such that the relevant circumstances in the one case are the same, or not materially different, in the other."

In his Lordship's view, the only way in which that provision could be interpreted consistently with Directive 76/207/EEC, as explained by the ECJ, was to hold that

"in a case where a woman is engaged for an indefinite period, the fact that the reason why she will be temporarily unavailable for work at a time when to her knowledge her services will be particularly required is pregnancy is a circumstance relevant to her case, being a circumstance which could not be present in the case of the hypothetical man: [1995] 1 WLR at p 1459H."

If, therefore, a woman was, as in Webb v Emo, dismissed or not employed because of expected unavailability, and the reason for that unavailability was pregnancy, then she had been discriminated against because pregnancy could not be present in the case of a man. That led to a simple answer in Webb v Emo itself, to the effect that Mrs Webb, having been dismissed because she would not be available due to her pregnancy, had been discriminated against on grounds of her sex. In our view it also leads to a simple answer in our case. There is no doubt that although the employers decided not to offer Mrs Caruana a new contract because of her future unavailability, that unavailability was because of, and their concern was because of, her pregnancy. The contrary was not argued before us. Since pregnancy was a circumstance relevant to her case under section 1(1)(a) of the 1975 Act, and that circumstance could not be present in the case of a man, she also was the object of unlawful discrimination.

We must, however, consider a number of matters that were urged on us as indicating that the answer is not simple at all. They all turn on what Lord Keith of Kinkel said immediately after the passage cited from his speech in Webb v Emo cited above. His Lordship continued:

"It does not necessarily follow that pregnancy would be a relevant circumstance where the woman is denied employment for a fixed period in the future during the whole of which her pregnancy would make her unavailable for work, nor in the situation where after engagement for such a period the discovery of her pregnancy leads to cancellation of the engagement: [1995] 1 WLR at p 1460A."

First, from this passage, and from other parts of his speech where Lord Keith of Kinkel emphasised that the ECJ had attached importance to the employee in Webb v Emo having been employed for an "indefinite period" and not just to cover for a particular period of absence, it was argued that his Lordship's ruling, and that of the ECJ, does not apply at all to "fixed term" contracts: such as Mrs Caruana was deprived of in this case. We cannot accept that. Such a contention is not consistent with Lord Keith's limitation of a possible special rule for fixed term contracts to cases where the employee would be available for no part of the term:

"The emphasis placed by [the ECJ] upon the indefinite duration of the applicant's contract of employment suggests the possibility of a distinction between such a case and the case where a woman's absence due to pregnancy would have the consequence of her being unavailable for the whole of the work for which she had been engaged: [1995] 1 WLR at p 1458G."

His Lordship made the same distinction in the passage already cited. The reference to Mrs Webb's contract having been of "indefinite" duration was first introduced by Tesauro

A-G [1994] QB 743 [15] in order to indicate that the hypothetical question of a contract no part of which could be performed by reason of pregnancy did not arise in that case. The Advocate General therefore did not consider that case, any more than did the ECJ. Lord Keith of Kinkel draws attention to that possible set of circumstances, but we are clear that he meant to do no more than that by his reference to indefinite contracts.

Second, however, it was submitted to us by both counsel, including perhaps surprisingly counsel for Mrs Caruana, that Lord Keith's observations indicated that the rule that he had extracted from the judgment of the ECJ was not an absolute one. The rule did not apply in the specific case mentioned by him, where the employee would be absent throughout the whole term of the contract; and it was suggested that there would or might be other types of case in which, consistently with Lord Keith's approach, the rule would not apply. We were invited to identify such types of case; it however being the submission of counsel for Mrs Caruana that the circumstances of his client fell well outside any exception from Lord Keith's rule that his Lordship could possibly have contemplated.

We do not intend to embark on that exercise, for two separate reasons. First, it is very far from clear to us that Lord Keith had in mind any circumstance in which pregnancy would not be a circumstance relevant to a woman's case under section 1(1) of the 1975 Act, apart from that which he specifically mentioned. Even that case was suggested by him only in tentative terms: there is the possibility of a distinction between an indefinite contract and a case where the employee will be absent for the whole of the fixed term (see [1995] 1 WLR at p 1458H); it does not necessarily follow from the ECJ's ruling that pregnancy would be a relevant circumstance where the woman will be absent for the whole duration of the contract (see [1995] 1 WLR at p 1460A). That approach gives little ground for confidence that there are other, entirely unstated, exceptions; nor in our respectful judgement is there any material in the decision of the ECJ to ground the existence of other exceptions to the very firmly and broadly stated general rule as to the correct approach to the case of a pregnant woman that we have cited above from paragraphs [24] and [25] of that decision.

Second, however, in the circumstances of Mrs Caruana's case it is, as her counsel argued, entirely artificial, and inconsistent with a proper approach to the law on discrimination in employment, to regard the failure to offer her a new contract as being a failure to employ her for a fixed period, as that latter expression is used by Lord Keith. We have already pointed out that her series of limited term contracts constituted "employment" for a continuous period for the purposes of the 1975 Act. What in reality she complains of is a failure to extend that relationship. That is very far away both in practical employment terms and in employment law from the case tentatively identified by Lord Keith, where the employee will be unable to perform any part of one contract, and one contract only, offered her by someone who, in popular language, will never be able to "employ" her at all. Moreover, not only is Mrs Caruana's case analytically different from the case identified by Lord Keith, but also there are very strong reasons why a relationship such as that of Mrs Caruana with her employers should not be exempted from the general rule posited by the ECJ in Webb v Emo. To disqualify Mrs Caruana from the protection of the ECJ's ruling would be a positive encouragement to employers to offer or to impose, not a continuous and stable employment relationship, but a series of short-term contracts, with the object or collateral advantage of avoiding the impact of the discrimination laws. We are confident that neither the ECJ nor the House of Lords did or would support such an approach.

Because of these latter considerations it is not necessary for us to decide the question whether the exception, expressed by the House of Lords in guarded and obiter terms, is in fact part of the law. Had we thought that that question was relevant in this case, and to be answered in the affirmative, we would then have had to remit the case to the Industrial Tribunal. On such remission, the Industrial Tribunal would have had to decide the somewhat complex issue of whether the contract that Mrs Caruana would or might have been offered had she not been pregnant would have been for a period shorter than, or the same as, the period for which she was or would be absent because of pregnancy. In the event, however, we allow this appeal, and direct that the case be remitted to the Industrial Tribunal for the assessment of compensation due to Mrs Caruana by reason of her not having been offered a new contract with effect from 1 January 1993. The Industrial Tribunal will no doubt wish to receive submissions from the parties as to the basis on which that assessment should proceed.