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IN THE SUPREME COURT OF JUDICATURE EATRF 97/0313/B

Royal Courts of Justice

Strand

London WC2A 2LL

Tuesday 20 January 1998

B e f o r e:

THE MASTER OF THE ROLLS

LORD WOOLF

LORD JUSTICE ALDOUS

LORD JUSTICE MUMMERY

- - - - -

KWIK SAVE STORES LIMITED Respondent

- v -

JANET GREAVES Appellant

and

EATRF 97/0533/B

HEATHER ELLEN CREES Appellant

-v-

ROYAL LONDON MUTUAL INSURANCE SOCIETY LIMITED Respondent

- - - - - -

(Computer Aided Transcript of the Palantype Notes of

Smith Bernal Reporting Limited, 180 Fleet Street,

London EC4A 2HD

Tel: 0171 421 4040

Official Shorthand Writers to the Court)

- - - - - -

MS LAURA COX QC and MR D BROWN (Instructed by Messrs Thompsons, London, WC1B 3LW) appeared on behalf of the Appellants.

MR D RICHARDSON (Instructed by Bullivant Jones, Liverpool, L2 4UR) appeared on behalf of the Respondent/Kwik Save.

MS E SLADE QC and MR P OLDHAM (Instructed by Solicitor, Royal London Insurance Legal Department, Colchester CO1 1RA) on behalf of the Respondent/Royal London Insurance.

- - - - - -

J U D G M E N T

(As approved by the Court)

©Crown Copyright

JUDGMENT

LORD WOOLF, MR: This is the judgment of the Court primarily prepared by Lord Justice Mummery.

Introduction

The issue in these two test cases is whether a female employee who has been on extended maternity absence from work loses any right to remain in her employment if, as a result of temporary illness, she is unable to carry out work on the notified day of return. Is her employer then entitled to treat her employment as having come lawfully to an end? Or is the employer who disputes her right to employment treated as if he had dismissed her and thereby incurred liability for unfair dismissal?

The critical features of both cases are that each applicant :

(1) had a contract of employment containing express provisions relating to maternity leave and to the right to return to work;

(2) had continuous employment with her employer for more than 2 years;

(3) had given appropriate written notices informing the employer of the pregnancy, of the expected week of childbirth and of the date on which she intended the period of absence from work, in exercise of the right to maternity leave, to commence;

(4) had gone on maternity leave;

(5) had, at the end of the period of maternity leave, taken extended maternity absence from work;

(6) had given to the employer an appropriate notice of the day of the proposed return to work and had then obtained, as allowed by statute, a 4 week extension of the date for return to work;

(7) had, due to temporary illness, been physically unable to work on the notified day of return.

In each case the employer adopted the position that the employee had not exercised the right to return to work; that the contract of employment had come to an end; and that there had been no dismissal of the employee giving rise to a claim for unfair dismissal. In each case the Employment Appeal Tribunal held that there was no liability for unfair dismissal on the part of an employer who had not permitted the employee to return to work, when she was unable to work on the notified day of return.

The statutory provisions relating to the right to maternity leave and to the right to return to work and their interaction with (a) corresponding contractual rights and (b) the statutory right not to be unfairly dismissed are complex. One reason for their complexity is that the legislation attempts to strike a delicate and difficult balance between, on the one hand, the protection of female employees from dismissal at a time when they are physically and emotionally vulnerable, and, on the other hand, the protection of the business of the employer and of the position of his other employees in the business from the uncertainties and other detrimental effects of the temporary absence of the employee on maternity leave.

The competing contentions on the meaning, effect and application of the relevant provisions are easier to understand in the context of the particular facts of these two cases.

Mrs Heather Crees

On 22 July 1991 Mrs Crees began employment with the Royal London Mutual Insurance Society Ltd (Royal London) as an administrative clerk in the GB Motors Department.

In 1994 Mrs Crees became pregnant. On 8 September 1994 she gave written notification to Royal London of the commencement of her maternity leave on 3 October 1994. She prematurely gave birth to her son in Colchester on 1 October 1994. She and her son were unwell after the birth. On 14 January 1995 she gave Royal London written notice of her intention to return to work at the end of the period of maternity absence. In February 1995 severe depression was diagnosed by her doctor.

On 24 March 1995 Mrs Crees gave written notification to Royal London of her return to work on 18 April 1995, but enclosed a medical certificate in support of her request for an extension of the date. On 31 March 1995 Royal London agreed to a 4 week extension, pursuant to the relevant statutory provisions, and postponed the date of return to work to 12 May 1995 (i.e. four weeks from the end of twenty-nine weeks starting from the beginning of the week of the birth). In their letter Royal London warned Mrs Crees that failure by her to comply with the requirement to return to work on or before 12 May 1995 would result in her having forfeited her right to return to work. Mrs Crees duly gave notice on 19 April of the revised date of her return as 12 May 1995 and enclosed a medical certificate.

Following a visit to her Doctor on 9 May, Mrs Crees notified Royal London on 10 May of her continuing illness, though she had made "a considerable improvement". She said that she would be unable to be at work on 12 May. She enclosed a medical certificate for a further two weeks.

In their letter of 12 May Royal London informed Mrs Crees that, as she had not returned to work by the due date, she had forfeited her right to return to work and that her contract of employment terminated with immediate effect. On 22 May Royal London rejected her request for an appeal on the ground that there was no scope for an appeal.

The relevant contractual provisions relied on by Royal London were as follows :

"2.2 Period of maternity leave

(a) Full leave

An employee who has completed at least 2 years' continuous service with the Society immediately before the beginning of the eleventh week before the expected week of confinement will be entitled to Full Leave, ie she will have the right to return to work - though not necessarily to the same job - at any time up to immediately before the end of twenty-nine weeks, beginning with the week in which the date of childbirth falls. This maximum period will apply irrespective of the date of commencement of maternity leave.

Failure to return by this latest date or to comply with any of the notification requirements specified in Section 3 below will result in forfeiture of the right to return to work.

3.2 In addition to the above,an employee must satisfy in full the following conditions to preserve her right to Full Leave and her right to return to work:-

(c) Notifying the Society in writing at least three weeks beforehand of her proposed date of return.

4. The Contract of Employment

4.1 Employees with entitlement to Full Leave

Provided that all the conditions as set out in sections 3.1 and 3.2 above are satisfied, the contract of employment will continue without a break.

If an employee states that she does not wish to exercise her right to return, the contract of employment will terminate on expiry of the maternity pay period or with immediate effect on the receipt of the employees statement, whichever is the later.

If an employee forfeits her right to return to work by failing to comply with any of the conditions set out in Section 2.2 and Section 3 above, then the contract of employment will terminate upon expiry of the maternity pay period or with immediate effect upon non-compliance with any of the relevant conditions, whichever is the later."

On 3 August 1995 Mrs Crees initiated proceedings in the Industrial Tribunal for unfair dismissal. Royal London responded that Mrs Crees had not been dismissed. Her contract of employment had been terminated by her failure to exercise her right to return to work after maternity absence. The termination occurred automatically without the need for any dismissal on the part of Royal London or resignation on the part of Mrs Crees.

The Industrial Tribunal rejected the claim made by Mrs Crees. In extended reasons notified to the parties on 10 January 1996 the Industrial Tribunal held that there had been no dismissal of Mrs Crees. So she could not claim that she had been unfairly dismissed. As she had not returned to work on the due date (12 May 1995) , her contract came to an end on 12 May 1995 by virtue of the operation of the contractual provisions and on the expiry of the 4 weeks added to the period of absence on maternity leave. The Industrial Tribunal relied on the decision of the Court of Appeal in Kelly -v- Liverpool Maritime Terminals Limited [1988] IRLR 310.

An appeal by Mrs Crees to the Employment Appeal Tribunal was dismissed on 26 September 1996, on the basis that there had been no legal error in the decision of the Industrial Tribunal. It was held that, in the ordinary sense of language, the exercise of the right to return to work required "a physical return" to work on the notified day of return.

The Court of Appeal granted Mrs Crees leave to appeal. On this appeal she was represented by Ms Laura Cox QC. Royal London were represented by Miss Elizabeth Slade QC.

Mrs Janet Greaves

Mrs Greaves was also represented on this appeal by Ms Laura Cox QC.

On 15 June 1978 Mrs Greaves began her employment with Kwik Save Stores Limited (Kwik Save), who were represented on the appeal by Mr David Richardson.

Mrs Greaves started work as a part-time store assistant at Giles Gate, Durham. Her conditions of employment are stated in a handbook provided by her employers which contains following relevant provisions on maternity leave:-

"Employees with at least 2 years continual service prior to the 11th week before the baby is expected have the right to return to work on condition:-

(a) They return to work within 29 weeks of the date of the beginning of the week of confinement (the week when she gave birth)

(b) The employee must give written notice of her intention to return to work at least 21 days before she intends to return."

Nothing was expressly stated in the contract about the termination of the contract of employment in the event of failure to return to work.

Mrs Greaves progressed from the position of a part-time store assistant to a full-time check out operator, then chief cashier and then assistant manager. Her first child was born in February 1993. She later returned to part-time work with Kwik Save as a sales assistant.

On 8 April 1994 she began her maternity leave, having given the required prior notification. Her second child was born on 20 May 1994 by caesarian section. She then suffered ill health arising out of pregnancy and childbirth. In July 1994 she gave notice of her proposal to return to work on 12 August 1994. She was ill on that date, suffering from back pain. She went to the store on that day and handed in a medical certificate. A total of 5 medical certificates was provided by her to Kwik Save between 9 September 1994 and early November 1994 when she was informed that her employment had already terminated, as she had failed to exercise her right to return to work. Her maternity leave had expired and she remained absent from work.

By Originating Application dated 16 January 1995 Mrs Greaves made a claim for unfair dismissal. Kwik Save responded that there had been no dismissal. It was a case of contract of employment terminating on the loss of her right to return to work. The Industrial Tribunal decided that Mrs Greaves had in fact effectively exercised her right to return to work by her attendance at the store on 12 August 1995; that she had then gone off sick immediately ; that she was expressly dismissed on 3 November 1994; and that that dismissal was unfair as Kwik Save had failed to show that she was dismissed for a potentially fair reason within Section 57 of the Employment Protection (Consolidation) Act 1978 (the 1978 Act). The tribunal, which described Mrs Greaves as a " long standing, loyal and capable employee ", rejected the submission of Kwik Save that Mrs Greaves had not effectively exercised her right to return to work. She had exercised the right when she had attended to hand in her medical certificate. At the end of the Extended Reasons the tribunal confessed that they had found the case difficult on "both the facts and the law ". (It is also relevant to note that the Industrial Tribunal refused to extend the time for Mrs Greaves to bring an out of time complaint against Kwik Save under the Sex Discrimination Act 1975. That point does not directly feature in these appeals.)

Kwik Save successfully appealed to the Employment Appeal Tribunal. In allowing the appeal on 18 December 1996 the Appeal Tribunal held that the Industrial Tribunal had erred in law, as the relevant statutory and contractual provisions required that a woman who wishes to exercise her right to return to work must actually attend for work on the notified day of return. On allowing the appeal the Employment Appeal Tribunal remitted the case to the same Industrial Tribunal for further consideration in the light of its judgment. The Appeal Tribunal also granted leave to appeal to the Court of Appeal.

The Legislation

Maternity rights are now governed by the Employment Rights Act 1996, Part VII sections 71 to 85. These cases are governed by earlier legislation contained in Part III of the 1978 Act. The case of Mrs Greaves is governed by the provisions of Part III, as originally enacted in sections 33 to 48. The case of Mrs Crees is governed by the provisions in Part III of the 1978 Act, as later substituted, with effect from 16 October 1994, by the Trade Union Reform and Employments Rights Act 1993. It is common ground that the substituted provisions contained in sections 33 to 47 of Part III apply to Mrs Crees. During the course of argument the court was taken in detail through the statutory provisions both as originally enacted and as substituted. For the purpose of deciding the point of principle it is, however, unnecessary to make any distinction between the two cases on most of the arguments. The differences in the language of the original provisions and the substituted provisions are largely immaterial for the purposes of deciding whether Mrs Greaves and Mrs Crees effectively exercised their right to return to work and whether they have been unfairly dismissed. Save where the contrary is indicated, this judgment is based on the provisions substituted by the 1993 Act.

The Unfair Dismissal Provisions

Although the nature and extent of the right to return to work following maternity leave and the procedure for the exercise of the right are governed by the provisions of Part III of the 1978 Act, Part V (Unfair Dismissal) of the 1978 Act is the best point to begin, as a woman who complained that her employer had failed to permit her to return to work after confinement could only obtain legal redress by making a complaint of unfair dismissal under Part V. Section 54 conferred every employee the right not to be unfairly dismissed by his or her employer. In a claim for unfair dismissal it must, of course, be established that the applicant was dismissed. In ordinary unfair dismissal cases (ie dismissal for incompetence, misconduct or redundancy) " dismissal" must be construed in accordance with the provisions of section 55. They included a provision in section 55 (2)(a) that :

"... an employee shall be treated as dismissed by his employer if, but only if, -

(a) the contract under which he is employed by the employer is terminated by the employer, whether it is so terminated by notice or without notice...."

That definition did not apply to a case to which section 56 of the 1978 Act applied. Section 56 and Schedule 2 (Supplementary Provisions) applied to the special case of an employer failing to permit a woman to return to work after confinement.

In its amended form section 56 provided :

"Where an employee has the right to return to work under section 39 and has exercised it in accordance with section 42 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 and 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."

It is common ground, first, that the provisions of section 56A, which excluded section 56 in certain cases, do not apply to the cases of Mrs Greaves or Mr Crees; and, secondly, that it is necessary to refer to the provisions of Part III in order to determine whether Mrs Greaves and Mrs Crees were entitled to return to work and had exercised the right to return in accordance with section 42.

Some preliminary comments on the structure and effect of section 56 are necessary to put these claims for unfair dismissal in context.

Section 56 specified three conditions which must be satisfied for its application :

(1) The employee has the right to return to work;

(2) The employee has exercised the right to return in accordance with section 42;

(3) The employer has not permitted the employee to return to work.

If these three conditions are satisfied, four consequences are deemed by the section to follow for the purposes of Part V :

1. Period of Employment

The employee is treated as if she had been employed until the notified day of return. This can be relevant to the determination whether the employee has satisfied the period of 2 years continuous employment necessary to qualify for the right to return. The provision makes it clear that that requirement is satisfied even if, for some reason, the employment has in fact ceased before the notified day of return (eg by termination of the contract of employment during the period of maternity absence).

(2) Continuity of Employment

The employee is also treated, if she would not otherwise be so treated, as having been continuously employed until that day. This is also relevant to the 2 year continuous employment requirement and to the application of Schedule 13 of the 1978 Act. It is relevant in cases where there may have been a gap in employment causing the continuity to be broken.

(3) Deemed Dismissal

The employee is treated as is she had been dismissed with effect from the notified day of return. It is not necessary for the employee to show that, by some act of the employer (eg service of notice), the employer terminated the contract or that the contract of employment was for a fixed term which expired without being renewed under the same contract (See Section 55(2)(b)).

(4) Reason for Dismissal

The employee is treated as if she had been dismissed for the reason for which she was not permitted to return. If the reason for not permitting an employee to return was that she did not have the right to return when she did in fact have such a right, then that is deemed to be the reason for dismissal.That would not be a potentially fair reason for dismissal falling within Section 57(2) of the 1978 Act.

Maternity Rights - Right to return to Work

The two critical questions posed by Section 56 and answered by the provisions relating to maternity in Part III are whether the applicant :

(1) has the right to return to work under section 39; and

(2) has exercised it in accordance with section 42.

There is no dispute as to (1). It is accepted by Miss Slade QC and by Mr Richardson that Mrs Greaves and Mrs Crees were eligible for the right to return to work, though it was emphasised that careful regard must be had to the nature and extent of that right conferred by the substituted provision in Section 39 of the 1978 Act. That provided that an employee who satisfies the specified requirements in section 39 (1)(a) and (b), as these two employees do :

"shall also have the right to return to work at any time during the period beginning at the end of her maternity leave period and ending twenty-nine weeks after the beginning of the week in which childbirth occurs."

This is no different in substance, though there is a difference in language in the provisions originally enacted in Section 45 of the 1978 Act which referred to the right to return to work

"at any time before the end of the period of twenty-nine weeks beginning with the week in which the date of confinement falls."

The point emphasised on behalf of the employers is that, although Mrs Greaves and Mrs Crees had a right to return to work, it was not a right to return after the end of the specified period, which is what Mrs Greaves and Mrs Crees sought to do. The extent of the right conferred was expressly defined by the provisions as a right to return before the end of the stated twenty-nine week period (section 45) or during that period (section 39).

This point, it is contended, is specially relevant to the issue of the exercise of the right to return. It is necessary to set out the whole of the substituted section 42 (which is in substantially similar terms to the originally enacted section 47 of the 1978 Act) :

"42 Exercise of right to return to work

(1) An employee shall exercise the right to return to work under section 39 by giving written notice to the employer (who may be her employer before the end of her maternity leave period or a successor of his) at least twenty-one days before the day on which she proposes to return of her proposal to return on that day (the "notified day of return").

(2) An employer may postpone an employee's return to work until a date not more than four weeks after the notified day of return if he notifies her before that day that for specified reasons he is postponing her return until that date, and accordingly she will be entitled to return to work with him on that date.

(3) Subject to subsection (4), an employee may -

(a) postpone her return to work until a date not exceeding four weeks from the notified day of return, notwithstanding that that date falls after the end of the period of twenty-nine weeks beginning with the week in which childbirth occurred: and

(b) where no day of return has been notified to the employer, extend the time during which she may exercise her right to return in accordance with subsection (1) , so that she returns to work not later than four weeks from the end of that period of twenty-nine weeks:

if, before the notified day of return (or the end of the period of twenty-nine weeks), she give the employer a certificate from a registered medical practitioner stating that by reason of disease or bodily or mental disablement she will be incapable of work on the notified day of return (or the end of that period).

(4) Where an employee has once exercised a right of postponement or extension under subsection (3)(a) or (b), she shall not again be entitled to exercise a right of postponement or extension under that subsection in connection with the same return to work.

(5) If an employee has notified a day of return but there is an interruption of work (whether due to industrial action or some other reason) which renders it unreasonable to expect the employee to return to work on the notified day of return, she may instead return to work when work resumes after the interruption or as soon as reasonably practicable afterwards.

(6) If -

(a) no day of return has been notified,

(b) there is an interruption of work (whether due to industrial action or some other reason) which renders it unreasonable to expect the employee to return to work before the end of the period of twenty-nine weeks beginning with the week in which childbirth occurred, or which appears likely to have that effect, and

(c) in consequence, the employee does not notify a day of return, the employee may exercise her right to return in accordance with subsection (1) so that she returns to work at any time before the end of the period of twenty-eight days from the end of the interruption notwithstanding that she returns to work outside the period of twenty-nine weeks.

(7) Where the employee has either -

(a) exercised the right under subsection 3(b) to extend the period during which she may exercise her right to return; or

(b) refrained from notifying the day of return in the circumstances described in subsection (6) the other of those subsections shall apply as if for the reference to the end of the period of twenty-nine weeks there were substituted a reference to the end of the further period of four weeks, as the case may be, of the period of twenty-eight days from the end of the interruption of work."

Finally, reference must be made to the provisions relating to contractual rights to return. The substituted section 44 (replacing section 48) provided :

"(1) An employee who has the right to return to work under section 39 and a right to return to work after absence because of pregnancy or childbirth under a contract of employment or otherwise 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 39, 41 to 43, 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 to work under section 39."

The statutory right to return to work thus forms a floor of minimum protection which may be supplemented by a more favourable right in particular respects in the contract of employment. The effect of section 44(1) was to create a "composite right" consisting of those parts of the statutory right and those parts of the contractual right which were the more favourable to the employee "in any particular respect". It was made clear by section 44(2) that the specific provisions expressly applicable to the statutory right, including the deemed dismissal provisions of section 56, applied equally to the exercise of the composite right.

Submissions of the Employers

The main submissions of the employers, made by Miss Elizabeth Slade QC, on behalf of Royal London, were adopted and supplemented by oral and written submissions of Mr David Richardson, on behalf of Kwik Save.

The arguments were :

(1) In order to succeed in a case of unfair dismissal, an employee must establish that there was a dismissal in law by the employer.

(2) The 1978 Act contained two mutually exclusive definitions of " dismissal". Mrs Crees and Mrs Greaves did not fall within either of them.

(a) There was no dismissal for the purposes of section 55. These were not cases of a fixed term contract within section 55(2)(b) or of constructive dismissal within section 55(2)(c). Dismissal by the employer by notice or otherwise under section 55(2)(a) was the only possibility, but that did not apply in this case because there was no termination by any act of the employer of the relevant contract of employment. In each case the contract terminated without any act on the part of the employer. This was most clearly the case with Mrs Crees whose contract expressly provided for the automatic and immediate termination of her contract of employment if she did not return to work. That is what happened. Although there was no similar provision in Mrs Greaves's contract of employment, the same position was reached since, if there was no right to return to work, it was implicit that the contract of employment could not continue to exist. The contract must fall with the failure to return to work. In the case of Mrs Greaves, the Industrial Tribunal was in error in finding that her contract of employment extended beyond the notified date of return on which she had actually failed to return to work.

(b) Section 56 of the 1978 Act did not apply. There was only a deemed dismissal under that section if the employer had failed to permit the employee to return to work in circumstances where the right to return to work conferred by Part III had been exercised in accordance with Part III (section 42). The right to return to work had not been exercised in accordance with those provisions, because neither Mrs Crees nor Mrs Greaves had actually returned to work in accordance with those provisions.

(3) The right to return was, as already indicated, in terms limited to a specified period. The right exercised must be the right conferred, as so limited. It followed that the return to work must take place on a specific day, not later than the end of the period specified in section 39, as extended under express statutory provisions in the case of ill health spelt out in section 42(3).

(4) Miss Slade QC emphasised that the expression "return to work" meant being ready, willing and able to work, not merely having an intention to return to work at some future date and/or giving notice of an intention to return to work. If it were otherwise, an employee could, by simply giving notice of an intention to return to work, postpone actual return and would then be taken to have returned to work on giving notice of her return or postponing that return, but not upon actually returning. Section 42(2) had the effect of differentiating between notification of a day of return and an actual return and the expression "return to work" in the conditions of employment had the same meaning as in Part III of the 1978 Act.

(5) Further, a contrary construction of the expression "return to work" would render the express provisions in sections 42(5) and (6) otiose.

The Authorities

Counsel for the employers cited authorities on the construction of Part III of the 1978 Act. The authorities are of limited assistance since they were mainly concerned with the case of an employee who failed to give an appropriate written notice in accordance with the statutory provisions. The cases cited included Kolfor Plant Ltd -v- Wright [1982] IRLR 311; Lavery -v- Plessey Telecommunications Ltd [1983] ICR 533; McKnight -v- Addlestones (Jewellers) [1984] IRLR 453 (Northern Ireland Court of Appeal); Dowuona -v- John Lewis Plc [1987] ICR 788; Hilton International Hotels (UK) Ltd -v- Kaissi [1994] ICR 578 and Crouch -v- Kidsons Impey [1996] IRLR 79.

The employers relied most strongly on the Court of Appeal decision in Kelly -v- Liverpool Maritime Terminals Ltd [1988] IRLR 310, an authority by which the Industrial Tribunal regarded itself as bound in the case of Mrs Crees. It was submitted that this Court was bound by that decision to conclude that, on the correct construction of Part III of the 1978 Act, an employee had no valid claim for unfair dismissal if illness prevented her from returning to work before the end of the twenty-nine week period after her confinement, allowing for only one statutory extension of 4 weeks expressly mentioned in Part III. Mrs Kelly did not return to work by submitting to her employer a letter stating that she was unable to return to work because of ill-health and enclosing a medical certificate. Particular reliance was placed on the judgment of Taylor LJ at page 314 where he said

"The statutory scheme in relation to maternity leave entitles the employee to return to work within 29 weeks after the birth if appropriate notice is given. That period can be extended by four weeks once, but only once."

At the end of his judgment he said :

"I conclude that the contract terminated when the four-week extension of the maternity leave expired."

On page 312 Glidewell LJ referred to the finding of the Industrial Tribunal that there was an implied term of the contract of employment which in effect incorporated into the contract the same maternity rights as conferred by the statutory provisions relating to maternity rights. He then said :

"In the event it was the problems with the pain in her back which prevented her from returning to work within the 29 week period after her confinement"

He concluded on page 313 (paragraph 20) that the applicant's maternity leave entitlement had come to an end and so had her contract of employment on the date at the end of the four week extension to her maternity leave on medical grounds.

Miss Slade QC submitted that that reasoning covered the facts of this case and that this court was bound to conclude that the contracts of Mrs Greaves and Mrs Crees came to an end, without there being any deemed dismissal, on their failure to return on the notified date of return.

The Correct Approach

What is the correct approach to the construction of statutory provisions which confer on a female employee the right to return to work after maternity absence? In Brown -v- Stockton-on-Tees Borough Council [1989] AC 20 (a decision of the House of Lords on unfair dismissal for a reason connected with pregnancy pursuant to section 60 of the 1978 Act) Lord Griffiths, in a speech with which all other members of the Appellate Committee agreed, summarised the history of the employment legislation providing "special protection for the security of employment of pregnant women" and commented that that aspect had not been drawn to the attention of the Court of Appeal or to the Employment Appeal Tribunal.

After tracing the history of the legislative provisions for the creation of the right not to be unfairly dismissed in the Industrial Relations Act 1971 and their re-enactment in the Trade Union Labour Relations Act 1974, without provision for the protection of pregnant women in the context of unfair dismissal, Lord Griffiths said (page 26F-G) :

"It was the Employment Protection Act 1975 that for the first time extended the law to provide protection for the employment of women during pregnancy and after giving birth. In Part II of that Act which is headed " Rights of Employees", there is a sub-heading " Maternity".

Lord Griffiths then referred(page 26G) to sections in the 1975 Act :

"which confer upon a woman a right to return to work after her pregnancy or confinement and a payment to her of maternity pay during her absence, all of which are reenacted in the present Act [1978 Act]. These sections came into effect on the same day as the Sex Discrimination Act 1975 which also extended the protection of the law to women and outlawed many practices which had hitherto placed women at a disadvantage in a society dominated by men.

Section 34 (now Section 60) must be seen as part of social legislation passed for the specific protection of women and to put them on an equal footing with men. I have no doubt that it is often a considerable inconvenience for an employer to have to make the necessary arrangements to keep a woman's job open for her whilst she is absent from work in order to have a baby, but this is a price that has to be paid as part of the social and legal recognition of the equal status of women in the work place."

The language of the provisions of Part III of the 1978 Act and the relevant unfair dismissal provisions in Part V (particularly section 56) should be construed in the context of the statutory purpose identified by Lord Griffiths. This is both as to the result to be achieved and the means by which it is to be achieved. It is, of course, subject to the detail of the provisions as to the need for an employer to be kept informed of the pregnancy of a woman employee, of her proposed period of absence on maternity leave and of her intentions concerning her return to work. Those considerations are important, since they affect the organisation and convenience of the employer and the day to day work of fellow employees, specially those directly affected by the absence of an employee on maternity leave and those affected by her prospective return (eg her temporary replacement).

The legal position is as follows :

(1) The employees qualified for the right to return to work under Section 39. They gave all the necessary notices. They satisfied the minimum requirement of 2 years continuous employment. This is accepted.

(2) They were entitled to the right to return to work and to exercise it whether a contract of employment actually continued to exist during the period of their absence on extended maternity leave or whether it had actually been terminated prior to the notified date to return. Further, section 56 applied whether the contract has in fact continued or not. If the right was exercised the contract was treated by that section as continuing for the purpose of a claim for unfair dismissal.

(3) However, to benefit from the right to return to work they had to exercise that right. The provisions relating to the exercise of the right to return to work in section 42 do not expressly require an actual return to work, an actual presence at work on the notified day of return, for the exercise of the right to be complete and effective. They do not expressly state that the right will be terminated, divested or avoided by the employee's non-attendance at work. That this is the position is not surprising because an employee may not have a specified place of work to return to, she may work from home or may have notified a day for return when it is physically not possible to do so for example during a period when a factory is closed for the annual holiday. In the ordinary way, no doubt, an employee should be ready and willing to work on the notified day of return, if she has no legitimate excuse for not doing so, in order to avoid the risk of dismissal for absence from work and for being unavailable to perform work in accordance with express or implied contractual obligations. Absence from work by any employee without good reason can amount to conduct on the part of the employee which constitutes a potentially fair reason for dismissal under section 57(2) of the 1978 Act.

(4) Section 42(1) sets out precisely what is required of an employee in order to exercise her right to return to work. "An employee shall exercise the right to return to work under Section 39 by giving written notice to the employer". Accordingly, the employees had completely and effectively exercised the right to return to work conferred on them when they gave written notices in accordance with section 42(1). Nothing more was required to be done for the right to be exercised. It follows that they had a right to claim that they had been unfairly dismissed, if they were not permitted by their employer to return to work. Neither Mrs Greaves nor Mrs Crees were permitted to return to work. The only reason given by the employers for not permitting them to return to work was that they had not effectively exercised the right to return. The reason why it was said that they had not exercised the right to return to work was that they had not physically attended on the notified day of return. The reason why they had not physically attended on the notified day of return was by reason of temporary sickness, which would, in the ordinary way, constitute a valid reason for absence and would not constitute a fair reason for immediate dismissal. But the failure to attend to work on that day did not mean that they had not exercised the right or that they had lost the right already exercised by them.

(5) The critical point is that the process of exercising the right to return to work is complete before the notified date of return actually arrives. It is complete once the appropriate notices have been given for the notified day of return. That day may be subject to postponement and extensions in accordance with the statutory provisions. The machinery for postponement and extensions neither expressly nor impliedly requires the employee to exercise the right by presence at the work place to perform his work on the day originally notified or as postponed.

(6) As the reason given by the employer for failing to permit Mrs Greaves and Mrs Crees to return to work was that they had not exercised their right to return to work when in fact they had, the contract of employment was deemed by section 56 to have continued in force, even if it had terminated according to its contractual terms. It is also deemed by section 56 to be in existence for all other relevant purposes, such as period of continuous employment and the continuity of that employment. The result of the application of section 56 is that both must be treated as dismissed for the reason that the employer had failed to permit them to return to work.

(7) The contrary construction contended for by the employers produces results so absurd and unjust that it cannot have been a part of the scheme of protection for female employees to allow an employer to do what was done in these cases without incurring liability. Examples were put to counsel during the course of the hearing to demonstrate that the employers' construction would mean that a woman employee who had given written notice under section 42(1) lost all her statutory and contractual rights in respect of her job if she were unable to return physically to her work on the notified day of return, because she had been run over by the managing director of an employer company on her way to work that morning or because there had been a natural disaster, such as a flood or a blizzard, which prevented her from attending work, even if she were physically well enough to do so.

(8) The decision in Kelly v Liverpool Maritime Terminals Ltd (supra) does not bind the Court to accept the employers' contentions on construction. The Court in that case focused on implied contractual provisions, which gave Mrs Kelly the same right to return to work as the statutory provisions. The judgments did not address the points arising on the exercise of the right to return by the giving of written notice or on deemed dismissal arising from sections 55 and 56. The judgments do not refer to either section (though the headnote refers to section 55(2)(a)). For the reasons already given, section 56 and its reference to the right to return in Part III is at the heart of these cases: the essential point, which is not covered by the judgments in Kelly, is that the right to return to work in these cases was in fact exercised by the giving of appropriate notices and there was a deemed dismissal, as the employer failed to permit the employee to return to work. These points do not appear to have been taken on behalf of Mrs Kelly.

Conclusion

Our conclusion accords with the approach of Lord Griffiths. It avoids the conclusion that the scheme set by Parliament for the protection of female employees produces a situation in which an employer can take advantage of the temporary illness of a female employee on the notified date of return to deny her the statutory right to return to work and to deny her the right to claim that she had been unfairly dismissed in not being permitted to return to work.

The submissions of the employers on these appeals should be rejected and both appeals from the Employment Appeal Tribunal should be allowed. In each case the female employee effectively exercised her right to return to work before the notified day of return. Neither the statutory provisions nor the terms of the relevant contract required that the right to return to work was only exercised if the employee physically attended for work on the notified day of return. The result is that both applicants were unfairly dismissed.

In the case of Mrs Greaves the Industrial Tribunal reached the correct conclusion. The Employment Appeal Tribunal should have dismissed the appeal by Kwik Save.

In the case of Mrs Crees the Industrial Tribunal erred in law in their construction and application of the relevant provisions to the facts.

Final Observations

It is unnecessary to reach a decision on other points taken in the Notice of Appeal and in the skeleton arguments.

Ms Cox QC submitted that Section 140 of the 1978 Act invalidated clause 4.1 of Mrs Crees's contract which provided for automatic termination of the contract upon non-compliance with any relevant conditions. Section 140 rendered void any provision in an agreement (a) which excludes or limits the operation of any provision of the 1978 Act or (b) which precludes any person from presenting a complaint to or bringing proceedings under the 1978 Act before an Industrial Tribunal. The Employment Appeal Tribunal refused to allow that point, which it did not regard as going to the jurisdiction of the Industrial Tribunal, to be raised for the first time on appeal. That point does not arise decision on this appeal in view of the conclusion on the construction of Parts III and V of the 1978 Act.

Similarly it is unnecessary to express any view on the argument on the construction of the 1978 Act, which invoked the provisions of the Pregnant Workers' Directive 92/85/EEC.

For all these reasons we would allow both appeals and would :

(a) restore the decision of the Industrial Tribunal in the case of Mrs Greaves;

(b) remit the case of Mrs Crees to the Industrial Tribunal for the consequences of the unfairness of her dismissal to be decided.

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LORD WOOLF, MR: We are grateful to Miss Slade for the argument she has advanced with regard to the relief which this court proposed to make in the Crees appeal. The order was that the court should remit the case of Mrs Crees to the Industrial Tribunal for the consequences of the unfairness of her dismissal to be decided.

Miss Slade submits that that would be an inappropriate order for the court to make and that the court should instead remit the case of Mrs Crees to the Industrial Tribunal so they can decide whether there has been an unfair dismissal and, if so, the consequences of that dismissal.

The submission is based on the fact that there were, prior to our judgment, undoubtedly grounds for the employer taking the view that Mrs Crees was dismissed by operation of law on the facts which are not in dispute. Miss Slade says that if the employers reasonably believed in accordance with their understanding of the law that she had not been dismissed by them, that would be a ground for saying that it had not been shown that the dismissal was unfair.

With respect to that argument, I do not consider that it has any substance. If the only justification that an employer can give for its undisputed conduct is that it has the law wrong, then that is not a basis for saying that the dismissal was other than unfair. Accordingly, in my view, the order which the court was proposing to make is appropriate, although I do accept that in this situation, not anticipating this point, it may be that the way the matter was dealt with in the case of Mrs Crees in her counsel's skeleton argument did not quite accord with that approach.

In coming to this conclusion, I take into account the response of the employer, which did not suggest any possible justification for the dismissal, but merely relied on the point that there had been, on their understanding of the law, no dismissal. I would accordingly make the order proposed because it would be undesirable for an Industrial Tribunal to be faced with a legal argument which, in my judgment, has no merit.

LORD JUSTICE ALDOUS: I agree.

LORD JUSTICE MUMMERY: I also agree.

Order: Appeal allowed. Respondent to pay appellant's costs of the appeal. Leave granted to appeal to the House of Lords.