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In the case of Sefton Borough Council v Wainwright UKEAT/0168/14/LA the Employment Appeal Tribunal (“EAT”) held that a finding that an employee had been discriminated against must be remitted as the Tribunal had not considered the “reason why” the potentially discriminatory action had occurred.

The factual background in Sefton Borough Council v Wainwright

Ms Wainwright was employed by Sefton Borough Council (“the Council”) as Head of Overview and Scrutiny. From November 2010 the Council was planning redundancies as it was faced with having to make budget cuts, and engaged in a management restructure in 2011 in order to make the necessary savings.

As part of the restructuring a new position of Democratic Service Manager (“DSM”) was created, a role which combined Ms Wainwright’s role with that of Head of Member Services (a post held by a Mr Pierce). Mr Pierce and Ms Wainwright were informed that their positions were at risk of redundancy in July 2012, by which time Ms Wainwright had commenced maternity leave.

A redundancy selection process was undertaken and both Ms Wainwright and Mr Pierce were interviewed in December 2012 for the position of DSM. The Council came to the conclusion that Mr Pierce was the better candidate for the role and he was offered the DSM position in December 2012.

In January 2013 Ms Wainwright was given three months’ notice of termination (for the reason of redundancy). She was also told that she had the right to be redeployed in the organisation but she did not apply for any positions. Her employment terminated in April 2013.

Ms Wainwright subsequently made claims to the Employment Tribunal under regulation 10 of the Maternity and Paternity Leave Regulations 1999 (“the Regulation 10 Claim”), section 18 of the Equality Act 2010 (“the Section 18 Claim”), and section 99 of the Employment Rights Act 1996, arguing that she had been discriminated against and automatically unfairly dismissed by the failure to award her the DSM position.

The decision of the Employment Tribunal

The Employment Tribunal held that the Regulation 10 Claim succeeded – under regulation 10 Ms Wainwright should have been offered the DSM position without an interview as she was on maternity leave and it was a suitable alternative vacancy. Failing to offer her the DSM was therefore a breach of regulation 10, regardless of the Council’s view of who the better candidate was. The Tribunal also held that, given that the Regulation 10 Claim succeeded, the automatic unfair dismissal claim and Section 18 Claims must succeed too.

The Council appealed the Employment Tribunal’s decision on the following bases:

  1. That the Tribunal had incorrectly equated the Section 18 Claim with the Regulation 10 Claim, and that the tests for these claims were substantially different (“Ground 1”)
  2. That the Tribunal had erred in finding that regulation 10 applied before interviews for the DSM role had taken place (“Ground 2”)

The decision of the Employment Appeal Tribunal

The Employment Appeal Tribunal (“EAT”) held that Ground 2 of the appeal should be dismissed, as the Tribunal was entitled to find that a redundancy situation had existed once that it had decided that the two positions would be deleted from the structure and replaced by one – if not provided with a suitable alternative vacancy both employees’ positions would be terminated by reason of redundancy, save that either employee could avoid being dismissed by being offered the DSM vacancy.

The EAT upheld the Ground 1 appeal, holding that the fact that regulation 10 had been breached did not inherently mean that Ms Wainwright had been directly discriminated against because of her period of maternity leave – the Tribunal should not have assumed that the Section 18 Claim was made out by virtue of the Regulation 10 Claim succeeding, and it should have asked itself what was the “reason why” Ms Wainwright was treated in the way she was.

Our lawyers’ comments

Chris Hadrill, a specialist employment solicitor, commented: “This case shows that, when making employees who are pregnant or on maternity leave redundant, employers should take particular care to ensure that such employees are given ‘first choice’ for any vacancies in their organisation which are both suitable and available – a failure to do so may lead to both claims for discrimination and automatic unfair dismissal being made against them.”

Please find the link to the judgment on Bailii here.

About

Redmans Employment Team deal with employment matters for both employers and employees, including drafting employment contracts and policies, advising employers and employees on compromise agreements, handling day-to-day HR issues, advising on restructures, and handling Employment Tribunal cases for both employers and employees

Call 020 3397 3603 to speak to one of the members of our employment team or email us on enquiries@redmans.co.uk.

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