Institute Of Motor Industry v Harvey [1992] UKEAT 132_91_1401

EAT

Institute Of Motor Industry v Harvey

[1992] UKEAT 132_91_1401 · 1991-11-19

MR JUSTICE WOOD (PRESIDENT): By an Originating Application dated the 9th August 1990 and received by the Central Office of Industrial Tribunals on the 15th August 1990 the Applicant Mrs Janice Harvey set out the facts upon which she was intending to rely and ended her claim in the following way -

"In the premises, the Applicant believes that she has been unfairly and constructively dismissed and is entitled to bring a claim of unfair dismissal under section 54 or, as the case may be, section 56 of the Employment Protection (Consolidation) Act 1978; in addition or in the alternative, the Applicant believes that she has been unlawfully discriminated against on the ground of her sex in accordance with sections 1(1)(a) and 6(2) of the Sex Discrimination Act 1975."

The Industrial Tribunal commented upon the complications of the case as follows:-

"The file in this case is thick. There have been amendments and re-amendments. The parties agree that there be a preliminary point hearing to determine certain issues relating primarily to unfair dismissal, but also sex discrimination. At the end of the second day the parties substituted different questions for the Tribunal to consider, other than those set out in the hearing notice and the Tribunal has decided accordingly. Furthermore, whilst the Tribunal was out for consideration of its decision, the matter came up of the possibility of the Originating Application being out of time. Accordingly when the Tribunal reconvened this matter was put to the representatives, further evidence and argument was heard on this point. Therefore in addition to the questions originally raised before the Tribunal the Tribunal has also considered the question of `out of time'. The Tribunal has found this a difficult case, both as to law and the facts."

Even by the time this Appeal is heard the issues between the parties have been the subject of abandonment and amendment. This has tended to leave those issues in a hopeless muddle. We seek to disentangle the whole matter by a fresh approach to the facts that were found by the Industrial Tribunal. The results of our legal conclusions will emerge.

On the 15th December 1986 Mrs Harvey was appointed Administration Manager, and on the 9th November 1987 she was appointed Registrar of the Institute. Her terms of employment were contained in correspondence but included provisions as to a pension, life insurance, use of a car for business and private purposes, holidays, medical insurance, hours of work and a three month's notice on either side for the first year. Thereafter it remained unchanged.

In 1989 she became pregnant; her baby was born on the 27th January 1990. During the summer of 1989 there was a staff restructuring and in a letter of the 24th July from Mr Ward the Director-General she was told:

"With regard to your status on the Management Board, until you depart on maternity leave you will remain a member of the Management Board. From the moment you start your maternity leave, the Board will be reduced to three full members ie Director General, Director of External Operations and Director of Internal Operations. Other managers, and you on your return, will make formal monthly reports to the Board and will be invited to join the Board and for any discussions affecting your specialist area."

There were further conversations between the Members of the Board and by a letter of the 14th September Mr Ward wrote:

"I wish to invite you to remain a member of the Management Board once you return to duty from your maternity leave."

By a letter of the 26th October 1989 - which letter complied with the requirements of Section 33 of the Employment Protection (Consolidation) Act 1978 - Mrs Harvey informed the Respondents that she would be absent from the 20th November 1989 on maternity leave, that the expected date of confinement was the 21st January 1990 and that she intended to return to work after her maternity leave. She in fact left work during November.

Prior to going on maternity leave there must have been some discussion about a possible date for her return. The final date upon which she would have received her statutory maternity pay was the 26th March 1990 and by letter dated 26th February the Secretary Mr Janes wrote:

"Having looked through my diary I noticed that the 26th March is your official date for returning to work. I mentioned this matter to Roy this morning and he suggested I write to you and ask you of your intentions. Perhaps you would be kind enough to write and let me know these.

Subject to your reply I will arrange a meeting between yourself and Roy to take place sometime within the next two weeks."

In her reply to that letter Mrs Harvey wrote:

"I am writing to confirm that I intend to return to work following my maternity leave. I would be grateful if you could arrange a meeting between myself and Roy to discuss the matter of my return."

Meetings took place on the 12th and 20th March. It is clear that certain changes of job were discussed at those meetings because by her letter of the 21st March Mrs Harvey states that her original job was not available as it was now redundant and expresses dissatisfaction with other proposals. There was also a discussion of a possible date of return and she says this in her letter:

"At the second meeting I also asked for your views on the date of my return to the Institute. You stated that you expected me to return on the 26th March and this date was not negotiable."

She then goes on to deal with the statutory position and points out that as her child was born in January that she was entitled to exercise her right to return to work at any time before the 28th August she says it in this phrase:

"In my case the beginning of the week of my actual confinement was the 21st January 1990. Accordingly, I may exercise my right to return to work at any time before the 18th August. This is subject to my giving you at least 21 days notice of the date on which I intend to return to work in accordance with Section 47(1) of the 1978 Act. I look forward to your written confirmation of the details contained in this letter."

She clearly did not recognise the 26th March as her "notified date of return":

The next day - 22nd March, Mr Ward answered her letter at some length. The letter reads:

"Dear Jan

Thank you for your letter of 21 March. As you are aware, the heavy economic pressures that the Institute now finds itself under and the other matters we discussed mean in effect that your former position no longer exists and that a redundancy situation has come into being. As you state we did, of course, discuss the possibility of the Institute offering you alternative employment or a redundancy package. Obviously the alternative positions we discussed were heavily dependent on your intending to return to work on 26 March as previously discussed.

I was, therefore, extremely disappointed to note that you are not now intending to return on 26 March as previously indicated. Clearly I cannot formulate any realistic proposals until I know your intended date of return particularly since I now find that I have wasted a considerable amount of time in working to a date that you have now decided to change. Consequently the previous proposals discussed must be put in abeyance until I receive your notified date of return.

On a personal note, it is a great pity when you have enjoyed a very close working relationship at the Institute at a very senior level that you should mislead us with regard to dates. Frankly it does not help relationships if people of senior status feel unable to be totally open with each other. I acknowledge fully that at no stage did you put in writing your return to work date but in conversations with me and your fellow directors the assumption that you would return on 26 March has always been made and you cannot fail to have been aware of this. Indeed, you were present in my office when, as a result of our discussions, I entered in my diary 26 March as your return date prior to your starting your maternity leave.

As you may be aware, there is no obligation on the part of the Institute either under your Contract of Employment or under the general law to continue your salary benefits during the period of your maternity leave. We have, however, hitherto continued these benefits as a gesture of goodwill. Since there is now no clear indication of your likely date of return, we cannot continue these benefits indefinitely. Consequently whilst we are prepared to continue the BUPA cover and life policy premiums for the time being, I regret that payments to your personal pension plan will be suspended from 1 April and I must now request that you return the motor car immediately. I would be grateful, therefore, if you would contact me as soon as possible in order that the appropriate arrangements can be made.

Yours sincerely

(Signed) ROY WARD"

On the 29th March Mrs Harvey replied and insofar as she deals in detail to the letter of the 22nd she says:

"I would like to reply to the comments in your letter regarding the date of the 26th March. You will recall that during our early discussions about my maternity leave I pointed out that I was entitled to take leave beyond the date on which my maternity pay period finished. This point was also made to Fred Janes. The date of 26th March is the date that my maternity pay period finished, not necessarily the end of my maternity leave.

In your letter you place in abeyance the proposals we discussed during our recent meetings, until I notify you of my return date. At present I am unable to commit myself to a date until I know to what I will be returning."

By a letter of the 3rd April, Mr Ward, acknowledge receipt of the letter of the 29th March and says:

"Until such time as I know your proposed date of return to work it is impossible for me to discuss with you your future employment at the Institute."

That was the last communication from the Respondents prior to the filing of the Originating Application on the 15th August.

Mrs Harvey then took advice from the Hammersmith and Fulham Community Law Centre, where she was advised by a Member of the Bar. By a letter of the 16th May he wrote at some length to the Respondents. The relevant passage is part of the penultimate paragraph which reads:

"The Institute's attitude towards the alleged redundancy, the date of return, and offers of alternative employment appear to disclose lamentable misconceptions about the nature of an employee's statutory maternity rights and an intolerance towards employees who seek to enforce those rights. Moreover, the way in which my client's maternity leave has been dealt with has had the effect of causing a breakdown in the necessary trust and confidence which the parties to an employment relationship must have in each other - especially at a senior level. Regrettably, therefore, my client has concluded that she cannot now contemplate returning to work at the Institute."

This is the basis of the allegation of constructive dismissal.

The pleadings in this case are complicated and ultimately during hearings at the end of 1990 and in January 1991 an Industrial Tribunal sitting at Bedford under the learned Regional Chairman Mr Curruthers was asked to decide four preliminary points. The Decision was not unanimous save on one point. The Tribunal was unanimous that the Contract of Employment subsisted during Mrs Harvey's maternity leave. By a majority it decided that she was precluded from bringing a claim for unfair dismissal based on Section 56; that she was not precluded from bringing a claim for unfair dismissal under Section 55; and thirdly that the complaints of unfair dismissal and of sex discrimination were not out of time and could be considered. The learned Chairman was in the minority.

We are wrestling once more with the statutory provisions relating to maternity in Parts III and Part V of the 1978 Act.

Providing that she has been employed for the qualifying period of two years a pregnant woman has certain rights. Those rights are highly technical in the sense that they require rigid time tables and notices. Part III of the Act is headed "Maternity - General provisions". By Section 33:

Rights of employee in connection with pregnancy and confinement

(1)an employee who is absent from work wholly or partly

because of pregnancy or confinement shall, subject to the following provisions of this Act, -

(a)... (b)be entitled to return to work.

(2)Schedule 2 shall have effect for the purpose of

supplementing the following provisions of this Act in relation to an employee's right to return to work.

(3)An employee shall be entitled to the [right] referred to in

subsection (1) whether or not a contract of employment subsists during the period of her absence but, subject to subsection (4), she shall not be so entitled unless -

(a)she continues to be employed by her employer (whether or not she is at work) until immediately before the beginning of the eleventh week before the expected week of confinement; (b)she has at the beginning of that eleventh week been continuously employed for a period of not less than two years;...

[(c)... (d) ...

(i) that she will be (or is) absent from

work wholly or partly because or pregnancy or confinement,

(ii)that she intends to

return to work with her employer, and

(iii) of the expected week of confinement or, if the confinement has occurred, the date of confinement].

The Applicant may be asked to produce a medical certificate under subsection (5) but providing she has done that, by complying with those subsections she preserves her right to return to work. In the present case Mrs Harvey complied with Section 33 and no issue arises upon that.

However, it is right to notice that under Section 33(4) it is envisaged that an employee may be dismissed by her employer for reasons falling within Section 60 "dismissal on ground of pregnancy" and that in certain circumstances her right to return is preserved. For our present purposes however the important passage is that inserted after sub paragraph (4) which reads:

"in this subsection "dismiss" and "dismissal" have the same meaning as they have for the purposes of Part V."

The right to return to work is dealt with in Section 45:

"(1)The right to work of an employee who has been absent from work wholly or partly because of pregnancy or confinement is, subject to the following provisions of this Act, a right to return to work with her original employer, or, where appropriate, his successor, at any time before the end of the period of twenty-nine weeks beginning with the week in which the date of confinement falls, in the job in which she was employed under the original contract of employment and on terms and conditions not less favourable than those which would have been applicable to her if she had not been so absent.

(2)In subsection (1) `terms and conditions not less favourable than those which would have been applicable to her if she had not been so absent" means, as regards seniority, pension rights and other similar rights that the period or periods of employment prior to the employee's absence shall be regarded as continuous with her employment following that absence but subject to the requirements of paragraph 5 of Schedule 5 to the Social Security Act 1989 (credit for the period of absence in certain cases).

(3)If an employee is entitled to return to work in accordance with subsection (1), but it is not practicable by reason of redundancy for the employer to permit her so to return to work she shall be entitled, where there is a suitable available vacancy to be offered alternative employment with her employer (or his successor), or an associated employer, under a new contract of employment complying with subsection (4)."

Subsection (4) deals with the situation where there is a new Contract of Employment.

It is to be noticed that the right to return to work is "at any time before the end of a period of 29 weeks beginning with the week in which the confinement falls". Secondly, that it is "in the job in which she was employed". Thirdly, that the right to return is "subject to the following provisions of this Act". Fourthly, that subsection 3 provides a defence for an employer. Fifthly, that continuity of employment is catered for.

The enforcement of the rights under Section 45 are covered by Section 46 which reads:

"The remedies of an employee for infringement of either of the rights mentioned in section 45 are those conferred by or by virtue of the provisions of sections 47, 56 and 86 and Schedule 2."

The exercise of the right to return to work is set out in Section 47(1):

"(1)An employee shall exercise her right to return to work by [giving written notice to] the employer (who may be her original employer or a successor of that employer) at least [twenty-one] days before the day on which she proposes to return of her proposal to return on that day (in this section referred to as the `notified day of return')."

The remaining subsections of Section 47 deal with certain powers to postpone on either side and the complicated procedures that arise in that event. It need not concern us in the present case.

However the wording of Section 47(1) is vital to an understanding of this case. It is to be noted that there is an obligation - "shall" - to exercise the right to return by written notice which may not be less than 21 days and which establishes the "notified day of return".

The Act clearly contemplates contractual rights as well as statutory rights and this is dealt with in Section 48 which reads:

"(1)An employee who has a right both under this Act and under a contract of employment, or otherwise, to return to work, may not exercise the two rights separately but may in returning to work take advantage of whichever right is, in any particular respect, the more favourable.

(2)The provisions of sections 45, 46, 47, 56 and 86 and paragraphs 1 to 4 and 6 of Schedule 2 shall apply, subject to any modifications 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 to return conferred solely by this Part."

Part V of the Act deals with unfair dismissal.

"Section 54(1)

In every employment to which this section applies every employee shall have the right not to be unfairly dismissed by his employer."

Section 55(1)

In this Part, except as respects a case to which section 56 applies, "dismissal" and "dismiss" shall be construed in accordance with the following provisions of this section."

Section 56. Failure to permit woman to return to work after confinement treated as dismissal

Where an employee is entitled to return to work and has exercised her right to return in accordance with section 47 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 153(3) reads:

"In sections 33, 47, 56, 61 and 86 and Schedule 2, except where the context otherwise requires, "to return to work" means to return to work in accordance with section 45(1), and cognate expressions shall be construed accordingly."

Finally, we must refer to Schedule 2 of the 1978 Act. Schedule 2 is headed "Supplementary Provisions Relating to Maternity" and Part I of that Schedule "Unfair Dismissal". Paragraph 1 reads:

1.References in this Part of provisions of this Act relating to unfair dismissal are references to those provisions as they apply by virtue of section 56.

. .......

2(2)If in the circumstances described in section 45(3) no offer is made of such alternative employment as is referred to in that subsection, then the dismissal which by virtue of section 56 is treated as taking place shall, notwithstanding anything in section 57 or 58, be treated as an unfair dismissal for the purposes of Part V of this Act.

(3)The following references shall be construed as references to the notified day of return, that is to say -

(a)references in Part V of this Act to the effective date of termination; (b)references in sections 69 and 70 to the date of termination of employment.

(4)The following provisions of this Act shall not apply, that is to say, sections 55, ......

PART III - General - Dismissal during period of absence

6.(1)This paragraph applies to the dismissal of an employee who is under this Act entitled to return to work and whose contract of employment continues to subsist during the period of her absence but who is dismissed by her employer during that period after the beginning of the eleventh week before the expected week of confinement.

(2)For the purposes of sub-paragraph (1), an employee shall not be taken to be dismissed during the period of her absence if the dismissal occurs in the course of the employee's attempting to return to work in accordance with her contract in circumstances in which section 48 applies.

(3)In the application of Part V of this Act to a dismissal to which this paragraph applies, the following provisions shall not apply.....

(4)Any such dismissal shall not affect the employee's right to return to work, but -

(a)compensation in any unfair dismissal proceedings arising out of that dismissal shall be assessed without regard to the employee's right to return; and (b)that right shall be exercisable only on her repaying any redundancy payment or compensation for unfair dismissal paid in respect of that dismissal, if the employer requests such repayment."

This paragraph applies Part V of the Act to dismissals within the period beginning with the 11th week before the expected week of confinement and 29 weeks after confinement. The exclusion is "if the dismissal occurs in the course of the employee's attempting to return to work ..."

It is clear that the 1978 Act envisages that contractual rights and statutory rights may co-exist - see Sections 33(3) and 48(1). What then is the effect upon the employment relationship if a woman gives a Section 33 notice? There may be cases where her Contract of Employment comes to an end when she goes on maternity leave, for instance by agreement or resignation. There may be a termination in some other way - for instance by dismissal, in which case other possible remedies may arise. However unless terminated in some such way that Contract is likely to continue. It was unanimously so found in the present case and there was ample evidence upon which that decision could have been based. In particular it is to be noted that Mrs Harvey's Contract of Employment had not been terminated.

The second question is to ascertain whether that Contract contained any express provisions which were relevant to maternity leave. They are probably only relevant if they are more beneficial to the Applicant than the statutory provisions - see Section 48.

There were none such in the present case. Implied terms are only necessary to give business efficacy to the contract. See United Bank Ltd v. Akhtar

[1989] IRLR 507

and White v. Reflecting Road Studs Ltd

[1991] IRLR 331

. In view of the presence of the statutory provisions there will be no necessity to imply terms which are in conflict with those statutory provisions. However, it does seem that where a contract of employment is continuing some terms will have to be implied in order to allow the suspension of certain of the rights and obligations between the parties. Laverly v. Plessey Telecommunications plc

[1982] ICR 373

, 378 D-G (EAT);

[1983] ICR 534

, 539 H, 542 H. (CA).

What then is the position of the basic obligations of a Contract of Employment, for the employer to provide reasonable work and to make payment, and for the employee to carry out that work? These in our view are by implication clearly suspended as indeed may other terms which do not depend upon continuity for their effectiveness. That suspension is brought to an end by the exercise of the Applicant of her right to return. Until she has exercised that right, there is no obligation upon an employer to re-instate her, that is to provide suitable work and to make proper payment. That obligation is triggered by the S.47 notice which may never be given within the 29 week period.

Problems of the right to return to work are clearly becoming more prevalent and it is important in industrial relations that there should be a flexible and reasonable approach from both sides. The provisions of the statute itself emphasise this. There will be need for discussions and equally no doubt there is a need for a definite date of return as the Applicant's return may require a reshuffling of staff. The notice under Section 47(1) used to be a seven day notice; that was clearly found to be unreasonably short. It is now not less than 21 days. Of course it may be longer. The purpose of that notice is first, to establish that the Applicant is exercising her right to return; secondly, to remove the suspension on the employer's obligation to provide suitable work and remuneration which had been suspended; and thirdly, to allow the employer to make final arrangements as necessary or desirable in order to comply with his responsibilities.

Whether or not her claim is of the right to return to work on a contractual basis or a statutory basis it still falls within Section 48 and her only remedy is by means of a Section 47(1) notice see Lavery v. Plessey Telecommunications Ltd

[1982] ICR 373

, 379 A to C. We would note especially what is said at page 379 F, namely -

"Doing the best we can with this unpromising material, the position seems to be as follows. Whether an employee is relying on a statutory right to return or a contractual right to return, her right is governed by Section 48. Accordingly her only statutory remedy for failure to allow her to return is by way of Section 56 (ie a deemed dismissal on `the notified day of return'). She has no right to complain of any `dismissal' in the conventional sense defined by Section 55, since Section 55 does not apply to her case. Only if she can show that she was dismissed otherwise than in the course of exercising her right to return can she bring a case of ordinary unfair dismissal."

Mr Pullen, for Mrs Harvey:-

(a)conceded that she could not proceed under s.56 (b)contended that she could proceed under s.55 on the grounds of constructive dismissal (c)contended that the issues under the Sex Discrimination Act 1975 should be heard by the Industrial Tribunal.

Mr McMaster submitted:-

(a)that there was no continuing contract after the departure on maternity leave (b)that if there was, there was no term in it as to maternity provisions and that any claim for unfair dismissal by way of constructive dismissal would have nothing "to bite on". (c)that any such claim alleged a breach occurring in the course of Mrs Harvey attempting to return to work and as the use of the statutory machinery was compulsory that claim must fail. (d)The claim under the Sex Discrimination Act was out of time.

Both advocates submit that we have enough material before us to allow us to reach conclusions without remitting any issues to an industrial tribunal. Regretfully we are unable to agree.

Mrs Harvey's claim for constructive dismissal covers four closely typed pages of her Originating Application - 19 paragraphs. It is an allegation of a breach of the implied term of trust and confidence. She must show a fundamental breach indicating "an intention no longer to be bound by the terms of the contract"; she will be unable to rely upon any breach of the obligation to allow her to return to work. That obligation had not come into being as no s.47 notice had been given. Whether or not her alleged dismissal occurred in the course of her attempting to return to work within the meaning of the provisions of paragraph 6(2) of Schedule 2 is a matter for the tribunal hearing the case. There will be many other issues. Although we were minded to reach a decision on the face of the documents, we feel that Mrs Harvey should be allowed to give her evidence and that it would be unfair to reach a decision without allowing this. The learned Regional Chairman will no doubt arrange a hearing. It will be important for that industrial tribunal to be careful that Mrs Harvey is not, in fact, trying to circumvent the statutory scheme.

The claim under the Sex Discrimination Act 1975 is one of direct discrimination.

(b) Mr Pullen dictated his case to us thus:

"The act complained of was a continuing act of the unfavourable treatment which the applicant had received and was continuing to receive as the result of falling pregnant and the applicant taking maternity leave and seeking to enforce her statutory right in reliance of maternity rights in respect of the right to return to work under s.45. The applicant was subjected to a hostile attitude by the respondents after informing them of her pregnancy to the extent that her job status was undermined even prior to going on maternity leave and that within two weeks of going on leave and unbeknown to the applicant at that time a decision was made effectively to withdraw the applicant from her position as registrar, that decision being the basis for the claim that the job was redundant, which is denied, and that when canvassing the possibility of returning on the 26th March as provisionally agreed, she was informed on the 12th March that the job was redundant and that the unreasonable behaviour exhibited by the respondents continued as evidence by the refusal to allow the applicant to have her grievance heard in front of Committee of Management and evidence by withdrawal of benefits hitherto received up to April, so that when the applicant sought to terminate her contract on the 16th May 1990 and claim constructive dismissal she also alleges that the unfavourable conduct which she had received throughout this period up to the 16th May 1990 was a continuing act of unlawful discrimination."

We are unable to say whether on the documentation and the evidence this claim be in time nor whether it is well founded. This must be for a re-hearing before an industrial tribunal.

Almost all the reasoning of the majority at the Industrial Tribunal has been abandoned before us. Like the Tribunal we have found this a difficult case but we have reached the following conclusions:-

(i)The contract of employment continued until the termination by the applicant on the 16th May 1990;

(ii)that there was no notice given under s.47;

(iii)that Mrs Harvey cannot bring proceedings under s.56;

(iv)that the respondents were not in breach of any obligation to reinstate Mrs Harvey as that obligation had not been brought into being by a s.47 notice;

(v)that Mrs Harvey was entitled to bring her claim under s.55 but in considering it the Industrial Tribunal will no doubt bear in mind the provisions of Western Excavating (ECC) Ltd v. Sharpe

[1978] ICR 221

, 226. And will need to have in mind in particular(a) (iv) above;

(b) paragraph 6 of Schedule 2 of the 1978 Act;

(vi)That the applicant's claim under the Sex Discrimination Act 1975 should be heard and that the issue of time limits can be considered at that time.

We shall ask the Bar to assist in the formulation of the appropriate Order.