|At the Tribunal|
THE HONOURABLE MR JUSTICE BEAN
MR J M KEENAN
DR W M SPEIRS
Transcript of Proceedings
|For the Appellant||Mr B Napier, Queen's Counsel
Equal Opportunities Commission
St Stephen's House
279 Bath Street
GLASGOW G2 4JL
For the Respondent
Mr J Hand, Queen's Counsel
ASDA Stores Ltd
Great Wilson Street
LEEDS LS11 5AD
Pro rata reduction of annual bonus for period of absence on ordinary maternity leave neither sex discrimination nor pregnancy-related detriment.
THE HONOURABLE MR JUSTICE BEAN:
"In the present case the decision about whether the applicant should receive her bonus in full was regulated by the Bonus Scheme. If the applicant complied with the rules of the Bonus Scheme she was entitled to be paid the bonus. This was not a matter left to the discretion of the respondents. In addition, the amount of bonus to be paid was not discretionary within the terms of the Scheme. For the purposes of work undertaken during 2002, the Bonus Scheme formed part of her contract of employment. The applicant appeared to acknowledge the contractual status of the bonus by referring to it as a right connected with her employment contract and by comparing her right to a bonus with other contractual rights such as annual leave and accrual of occupational pension rights, as in the case of Boyle and Others v EOC  IRLR 717 (ECJ)."
"The factual matrix before the Tribunal led to a finding that the bonus was a payment regulated by contract. This excludes the application of the Sex Discrimination Act 1975. The Tribunal did not accept that by treating the failure to pay the bonus in full as a result of a working condition the same issue could also give rise to a claim under the Sex Discrimination Act 1975 and Equal Treatment Directive 76/207. …The issue under consideration in the present case is the payment of a reduced bonus as part of the applicant's wages. This falls within the scope of Article 141."
"…women taking maternity leave provided for by national legislation are in a special position which requires them to be afforded special protection, but which is not comparable, in particular, either with that of a man or with that of a woman actually at work (Gillespie paragraph 17). Therefore they cannot usefully rely on the provisions of Article 119 of the Treaty to argue that they should continue to receive full pay while on maternity leave as though they were actually working, like other workers (Gillespie paragraph 20)."
"36. According to settled case law discrimination involves the application of different rules to comparable situations or the application of the same rule to different situations (Boyle  IRLR 717).
37. A worker who exercises a statutory right to take parenting leave, which carries with it a parenting allowance paid by the state, is in a special situation which cannot be assimilated to that of a man or woman at work since such leave involves suspension of the contract of employment and, therefore, of the respective obligations of the employer and the worker.
38. The refusal to pay a woman on parenting leave a bonus as an exceptional allowance given voluntarily by an employer at Christmas does not therefore constitute discrimination within the meaning of Article 119 of the Treaty where the award of that allowance is subject only to the condition that the worker is in active employment when it is awarded.
39. The position would be different if the national court were to classify the bonus at issue under national law as retroactive pay for work performed in the course of the year in which the bonus is awarded.
40. In those circumstances, an employer's refusal to award a bonus, even one reduced proportionally, to workers on parenting leave who worked during the year in which the bonus was granted, on the sole ground that their contract of employment is in suspense when the bonus is granted, places them at a disadvantage as compared with those whose contract is not in suspense at the time of the award and who in fact receive the bonus by way of pay for work performed in the course of that year. Such a refusal therefore constitutes discrimination within the meaning of Article 119 of the Treaty since female workers are likely, as noted in paragraph 35 of this judgment, to be on parenting leave when the bonus is awarded far more often than male workers.
41. As to whether periods for the protection of mothers (in which they are prohibited from working) must be taken into account, it must be held that they are to be assimilated to periods worked.
42. Indeed to exclude periods for the protection of mothers from the periods worked for the purpose of awarding a bonus retroactively as pay for work performed would discriminate against a female worker simply as a worker since had she not been pregnant, those periods would have had to be counted as periods worked.
43. The answer to the second question must therefore be that Article 119 of the Treaty precludes an employer from excluding female workers on parenting leave entirely from the benefit of a bonus paid voluntarily as an exceptional allowance at Christmas without taking account of the work done in the year in which the bonus is paid or of the periods for the protection of mothers (in which they were prohibited from working) where that bonus is awarded retroactively as pay for work performed in the course of that year.
44. However neither Article 119 of the Treaty nor Article 11(2) of Directive 92/85 nor Clause 2(6) of the Annex to Directive 96/34 precludes a refusal to pay such a bonus to a woman on parenting leave where the award of that allowance is subject to the sole condition that the worker must be in active employment when it is awarded." [Emphasis added]"
"The principal of non-discrimination requires that a woman who continues to be bound to her employer by her contract of employment during maternity leave should not be deprived of the benefit of working in conditions which apply to both men and women and are the result of that employment relationship. In circumstances such as those of this case, to deny a female employee the right to have her performance assessed annually would discriminate against her merely in her capacity as a worker because, if she had not been pregnant and had not taken the maternity leave to which she was entitled, she would have been assessed for the year in question and could therefore have qualified for promotion."
"It required the contract of employment to continue and it required the employees to do no more than comply with the term of the contract of employment, namely to cooperate and show goodwill. ……….[It] was a special scheme within a contract of indefinite duration offering a special loyalty payment for those who continued with the contract until a specific date. As such it was subject to all the regular incidences of an indefinite contract of employment such as absence by reason of illness or leave for whatever purpose."
The EAT accepted this analysis; but it is a long way from the present case.
Pregnancy Related Detriment
"(5) In sub section (4)(a) "terms and conditions of employment"-
(a) includes matters connected with an employees employment whether or not they arise under her contract of employment, but
(b) does not include terms and conditions about remuneration.
(6) The Secretary of State may make regulations specifying matter which are or are not to be treated as remuneration for the purposes of this section."
"(1) An employee who takes ordinary maternity leave-
(a) is entitled, during the period of leave, to the benefit of all of the terms and conditions of employment which would have applied if she had not been absent….
(2) In paragraph (1)(a) "terms and conditions" has the meaning given by Section 71(5) of the 1996 Act and accordingly does not include terms and conditions about remuneration.
(3) For the purposes of section 71 of the 1996 Act, only sums payable to an employee by way of wages or salary are to be treated as remuneration."
The question, therefore, is whether the bonus was a sum payable to Mrs. Hoyland "by way of wages or salary" in which case it was not required by the Regulations to be paid in respect of the period of ordinary maternity leave (other than the compulsory fortnight)".
"The bonus was designed to reward attendance at work which contributed to the overall performance of the business during a bonus year. While unrelated to individual productivity, it was paid in recognition of work undertaken by employees. It was paid through the respondents' payroll with the employee's basic wage. It was subject to deductions of tax and national insurance contributions. A percentage of the bonus was paid into the employee's pension plan with an equivalent amount contributed by the Respondents. On consideration of the above factors, the Tribunal concluded that in this case the bonus paid to the applicant was part of her "wages or salary" within the meaning of Regulation 9(3) of the Maternity and Parental Leave etc Regulations 1999."
We agree with the Tribunal's reasoning and conclusions.
"(1) An employee is entitled under section 47C of the 1996 Act not to be subjected to any detriment by any act, or any deliberate failure to act, by her employer done for any of the reasons specified in paragraph (2).
(2) The reasons referred to in paragraph (1) are that the employee -…..
(d) took, sought to take or availed herself of the benefits of ordinary maternity leave…
(3) For the purposes of paragraph (2)(d), a woman avails herself of the benefits of ordinary maternity leave if, during her ordinary maternity leave period she avails herself of the benefit of any of the terms and conditions of her employment preserved by section 71 of the 1996 Act and regulation 9 during that period"