Discrimination - Compensatory awards - Maternity leave - Polkey reductions

Eversheds Legal Services Ltd v J De Belin: EAT (Mr Justice Underhill (president), B Beynon, T Haywood): 6 April 2011

The appellant employer (E) appealed against an employment tribunal’s decision that the respondent male employee (D) had been discriminated against on grounds of his sex and unlawfully dismissed.

E also appealed against the compensation award of more than three years’ loss of earnings to D.

D had been one of two solicitors employed in a particular team.

The other solicitor (R) was on maternity leave when E decided that one of them had to be made redundant.

D and R were scored against various criteria, including one, ‘lock up’, which measured the length of time between completion of work and receipt of payment from the client.

As R had been on maternity leave for seven months, ‘lock up’ could not be measured for her and she was awarded the maximum score for that criterion.

R’s overall score was higher than D’s and he was selected for redundancy. E contended that (1) its treatment of R was special treatment which it was required to give under section 2(2) of the Sex Discrimination Act 1975; (2) the tribunal had failed to properly consider whether the dismissal was unfair; (3) D would in any event have been made redundant nine months later and the award of compensation should have been based on that period or at least substantially discounted on Polkey principles.

Held: (1) The protection of employees who were pregnant or on maternity leave sometimes required them to be accorded treatment which was more favourable than that accorded to colleagues, male or female.

However, that obligation could not extend to favouring pregnant employees or those on maternity leave beyond what was reasonably necessary to compensate them for the disadvantages occasioned by their condition.

To the extent that a benefit extended to a woman who was pregnant or on maternity leave was disproportionate, there was no reason why a colleague who was correspondingly disadvantaged should not be entitled to claim for sex discrimination.

The only justification for treating women more favourably was the need to see that they were not disadvantaged by their condition.

Where the treatment went beyond what was reasonably necessary for that purpose a real injustice might be done to a colleague.

It was also important not to bring into disrepute the legislation which protected pregnant women and those on maternity leave by giving it a wider scope than was required.

That approach was not inconsistent with the decisions of the European Court of Justice in Caisse Nationale d’Assurance Vieillesse des Travailleurs Salaries (CNAVTS) v Thibault (C-136/95) [1998] All ER (EC) 385 ECJ (6th Chamber) and Abdoulaye v Regie Nationale des Usines Renault SA (C-218/98) [1999] ECR I-5723 ECJ (5th Chamber), as the issue of proportionality had not arisen in those cases, Thibault and Abdoulaye distinguished.

The means adopted by E to resolve the problem created by R’s absence at the applicable lock up measurement date went beyond what was reasonably necessary and were not proportionate.

There had been alternative ways of removing the maternity-related disadvantage to R without unfairly disadvantaging D, the most satisfactory being to measure the lock up performance of both as at the last date R had been at work.

Section 2(2) of the 1975 act had to be construed in a manner which incorporated the principle of proportionality.

That would allow a wide margin of discretion to employers regarding the appropriate special treatment to be accorded.

Captious claims by male colleagues who resented the proper protection given to pregnant women and mothers could expect short shrift but the instant case was not that kind.

The disproportionate advantage given to R had meant a direct and unfair corresponding disadvantage to D (see paragraphs 28-33 of judgment).

(2) The question of unfair dismissal should have been considered separately by the tribunal.

However, it had not been reasonable for E to believe that it had no alternative to maintaining a maximum lock up score for R when it became clear that that would be decisive in the choice between her and D.

The result was patently unfair to D (paragraphs 36-40).

(3) The tribunal’s reasoning that there was insufficient evidence to enable it to carry out a Polkey exercise was plainly unsatisfactory.

There was cogent evidence that if D had been retained instead of R he would have been part of the later redundancy exercise.

It was not therefore a case of some wholly speculative future contingency and it had been the tribunal’s duty to engage with that evidence and explain why it was not accepted.

The case would be remitted to a different tribunal for that issue to be addressed (paragraphs 42-49).

Appeals allowed in part.

John Cavanagh QC (instructed by in-house solicitor) for the appellant; Simon Popplewell for the respondent.