MRS DEBORAH BANKS v TESCO STORES LIMITED SECRETARY OF STATE FOR SOCIAL SECURITY [1999] UKEAT 911_97_1509
[1]APPEARANCES For the Appellant MR J McMULLEN QC MISS T GILL (of Counsel) Instructed By: Ms J Wade (Solicitor) The Maternity Alliance 45 Beech Street London EC2P 2LX For the First Respondents For the Second Respondents MR J HAND QC (of Counsel) Messrs Dibb Lupton Alsop Solicitors Windsor House Temple Row Birmingham B2 5LQ MR C VAJDA QC The Solicitor Dept of Social Security New Court 48 Carey Street London WC2A 2LS MR JUSTICE MORISON: This case concerns the entitlement of a woman whilst on maternity leave to statutory maternity pay. The appellant started her part-time employment with Tesco Stores Limited in January 1994. Her gross earnings were £56 per week. She became pregnant, and started her maternity leave on 17 December 1994. Her expected week of confinement was 28 February 1995; in fact, her baby was born on 12 March 1995. She did not return to work, and resigned with effect from the end of the year. She claimed statutory maternity pay but was refused it because her earnings fell below the minimum level required.[2]Under UK legislation, a woman is entitled to statutory maternity pay if she fulfils three conditions: 1. Did Article 119, the Equal Pay Directive or the Equal Treatment Directive or any of them require women on maternity leave to receive by way of maternity pay the same pay ('full pay') which she would have received had she been working? 2. If no, then did any of the provisions require that the amount of her maternity pay be calculated by reference to particular criteria? 3. If yes, what are the criteria? 4. If the answer to the first two questions is 'no', do any of the provisions have any application or effect "as respects the amount of pay to which a woman on such leave is entitled"? 1. The benefits paid during maternity leave constitutes pay within the meaning of Article 119 and the Equal Pay Directive and are not, therefore, covered by the Equal Treatment Directive as well, which does not apply to 'pay'. 2. Neither Article 119 nor the Equal Pay Directive requires that women on maternity leave should receive full pay during that period. 3. Nor do those provisions lay down specific criteria for determining the amount of benefit payable during that period "provided that the amount is not set so low as to jeopardise the purpose of maternity leave." 4. However, to the extent that the amount of their benefit is calculated by reference to the pay which the woman was receiving before she went on leave, her maternity pay must reflect any pay increases awarded after she went on leave, as from the date of the increase. "maintenance of a payment to, and/or entitlement to or an adequate allowance for" pregnant women on maternity leave. "3. The allowance referred to in point 2(b) shall be deemed adequate if it guarantees income at least equivalent to that which the worker concerned would receive in the event of a break in her activities on grounds connected with her state of health, subject to any ceiling laid down under national legislation. 4. Member States may make entitlement to pay or the allowance referred to in points 1 and 2(b) conditional upon the worker concerned fulfilling the conditions of eligibility for such benefits laid down under national legislation. These conditions may under no circumstances provide for periods of previous employment in excess of 12 months immediately prior to the presumed date of confinement." In a statement attached to the PWD made by the Council and the Commission on 19 October 1992, it was said, à propos Article 11(3): "In determining the level of the allowances referred to in Article 11(2)(b) and (3) reference shall be made, for purely technical reasons to the allowance which a worker would receive in the event of a break in her activities on grounds connected with her state of health. Such a reference is not intended in any way to imply that pregnancy and childbirth be equated with sickness. The national social security legislation of all Member States provides for an allowance to be paid during an absence from work due to sickness. The link with such allowance in the chosen formulation is simply intended to serve as a concrete, fixed reference amount in all Member States for the determination of the minimum amount of maternity allowance payable. In so far as allowances are paid in individual Member States which exceed those provided for in the Directive, such allowances are, of course, retained. This is clear from Article 1(3) of the Directive". [I interpolate: which provides that implementation of the PWD is not to be used as an occasion for reducing the previous level of a pregnant woman's entitlement]. In Mrs Banks' case, she was not entitled to any statutory sick pay so that, unless some payment was required, it would appear that there was no breach of Article 11.3 of the Directive. Second, the service condition is more generous than the maximum permitted by Article 11.4 of the Directive. 1. Although paid in respect of a period during an employment relationship when a woman is entitled to leave and is not required to work (and is not working), the statutory maternity pay she receives, if any, is pay within the meaning of Article 119. If her maternity pay is based upon her earnings, it would be unlawful not to give her the benefit of any increases in the pay which she would have received had she remained at work. Absence on maternity leave is to be regarded as a temporary and natural break in the working relationship which must not deprive her of all the rights and benefits she would have received had she not required the break, but that does not mean that she is entitled to be paid what she would have received had she been at work. 2. The United Kingdom's statutory maternity scheme is part of its social security system, based upon the concept of national insurance: an employee who earns below a certain level pays no insurance contributions and is entitled to no statutory sick pay nor statutory maternity pay. Member States have a wide area of discretion in relation to the choice of their social security/national insurance arrangements. Broadly, subject to the exception mentioned in Article 11 of the PWD, the Directive is designed to ensure that women receive both maternity leave and maternity pay which must not be set at a level which defeats the objective of the Directive. We think it inherently unlikely that the Court was intending to say that Article 119 required member states to set such a level in cases where a woman did not qualify for any maternity pay by reason of an exception contemplated by Article 11. What it was saying was that where a woman otherwise qualified for maternity pay, the level at which it was set must be sufficient to satisfy the overriding requirement that maternity leave should not be undermined. Had statutory maternity pay been payable the appellant would have received no less than she would have received had she been off work sick. Article 11.3 of the Directive provides a minimum level for maternity pay and it was that provision, we think, which prompted the Court's observation that the payment must not be pitched so low as to defeat the purpose of maternity leave.