Last month a City executive went to Industrial Tribunal claiming she was cheated of £2 million in shares for taking maternity leave. Charlotte Giller of commercial law firm Bird and Bird looks at pregnancy discrimination.

The upper compensation limit for unfair dismissal will soon be raised from £12,000 to £50,000, and in June the length of service which most employees (but not pregnant workers) must have worked before they can bring a claim was reduced from two years to one.

More workers will be able to claim unfair dismissal and awards will probably substantially increase.

Employers should carefully consider how they dismiss staff if they are to avoid the costs of unfair dismissal claims – unless the reason for dismissal is one of those listed in the Employment Rights Act 1996, it will be potentially an unfair dismissal.

‘Fair' reasons are only: capability, conduct, redundancy, because of a duty imposed by law or the catch-all category “some other substantial reason”, which is normally a re-organisation of the business.

Any proposal to dismiss a pregnant employee or one on maternity leave must be considered very carefully. The Employment Rights Act and Sex Discrimination Act govern this area and the development of case law has been heavily influenced by European law.

The Pregnant Workers Directive states:
Member states shall take the necessary measures to prohibit the dismissal of workers during the period from the beginning of their pregnancy to the end of the maternity leave.

This area of law often makes headlines, partly due to some very high settlements and partly because it affects a growing number of workers. It is important to remember that pregnant women, or women on maternity leave, can be dismissed as long as the pregnancy is not a relevant circumstance in the decision making process. Possible claims include: breach of contract, unfair dismissal and sex discrimination.

When considering dismissing a pregnant employee the employer must be aware of the relevant notice period and contractual maternity policy. If these are not applied on dismissal, a successful breach of contract claim may result and compensation be awarded.

No qualifying period
It is automatically unfair to dismiss an employee for a pregnancy-related reason and there is no qualifying period to bring a claim.

A reason connected with pregnancy is interpreted extremely broadly by Tribunals, and the pregnancy need not be the main reason for the dismissal.
The Tribunal is entitled to draw an inference from the circumstances and the dismissal will be unfair regardless of motive or justification.

In a case in the 1980s an unmarried religious education teacher in a Roman Catholic School became pregnant by a Roman Catholic priest. The school argued the reason for dismissal was not the pregnancy itself but the fact the father was a priest, but it was deemed automatically unfair and discriminatory because the pregnancy was at the root of the decision to dismiss.

It was established in Webb v EMO Air Cargo (UK) that a dismissal for a pregnancy-related reason will also be automatically discriminatory. It was held that pregnancy could not and should not be equated with illness and that to establish sex discrimination there was no need to compare the case of a pregnant woman with that of a man absent from work for illness.

Protective period
Any dismissal for this reason is unfair and discriminatory. The important question is when the so-called ‘protective period' for pregnant women comes to an end. In the Hertz case last year, the European Court of Justice established that in European law the protective period ceases on return from maternity leave.

In a more recent decision, Caledonia v Caffrey, the employee became ill after the end of her maternity leave period with post-natal depression and was dismissed. If illness arising from pregnancy occurs after the woman's return, then the protective period is over and her treatment should be compared with the way a man absent for a comparable illness would have been treated. However, Ms Caffrey's dismissal was found to be unfair and discriminatory even though her illness started outside the normal protective period after her return from maternity leave. It was held that there was no need to consider the treatment which a man absent for a similar period of time would have been given as the illness does not apply to men.

Finally, the European Court of Justice has now clearly established in Brown v Rentokil, that periods of absence due to pregnancy-related illness must not be taken into account by an employer when deciding whether or not a dismissal is justified. So when comparing a sickness record with that of a man, all pregnancy-related illness must be excluded.

A pregnant woman, or a woman on maternity leave, can be made redundant as long as the reason, or part of the reason for her selection is not related to her pregnancy. Particular care should be taken in these circumstances to have objective reasons for selection.

Pregnant women have an additional level of protection in a redundancy situation in that an employer must give a woman any available suitable vacancy that exists even in preference to another employee – in other words she can jump the queue. The employer must search throughout the maternity leave period.
An often forgotten point is that if an employer has five or fewer employees, dismissing an employee after extended maternity leave because she is no longer required will not be treated as an unfair dismissal.

Finally, what happens in a situation where the replacement for an employee on maternity leave is more efficient than the woman he or she has replacedNULL A dismissal in these circumstances will still be unfair and discriminatory as the cause is maternity related. An employer should allow the woman to return to her job and make any changes at a later date.

All Change
Maternity leave changes December 15, 1999
- all employees, regardless of length of service, will be entitled to ordinary maternity leave of 18 weeks
- employees with at least one year's continuous service by the 11th week before the expected week of childbirth will be entitled to additional maternity leave, beginning at the end of ordinary maternity leave and ending 29 weeks after the week of childbirth
- the contract of employment will continue throughout additional maternity leave
- employees have the right not to be subjected to detrimental treatment on grounds of pregnancy, childbirth or maternity. This will be in addition to the protection offered by the Sex Discrimination Act 1975
- where the employee fails to respond to the employer's request for confirmation that they are returning to work within the time limit, the employer can take disciplinary action
- employees must give 21 days notice if they intend to return to work before ordinary or additional maternity leave has expired
- if the employee fails to give the correct notice the employer may postpone her return to work until 21 days have elapsed;
- no provisions will allow for return to be postponed after additional maternity leave.

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