In this article...

• The background
• The facts
• The EAT’s decision
• Incorporation into the contract
• What does this mean for me?

Marie-Claire Boyle considers a recent decision of the Employment Appeal Tribunal which clarifies how employers should deal with pregnancy related illness before, during and after maternity leave, and also whether policy documents stored on an intranet page could be incorporated into an employee’s contract of employment.

The background

An employee on maternity leave is entitled to benefit from the same terms and conditions of employment that would have applied had she not been absent from work. However, remuneration is specifically excluded from the benefits available during maternity leave (section 71(5)(b) of the Employment Rights Act (“the ERA”) and regulation 9(1) of the Maternity and Parental Leave (“MPL”) Regulations 1999).

In Department for Work and Pensions v Sutcliffe the Employment Appeal Tribunal (“EAT”) had to consider:

		whether sick pay came within the definition of remuneration;
		whether a woman who was certified sick during her maternity leave was entitled to receive sick pay rather than Maternity Allowance; and
		whether a policy document stored on an intranet but unseen by an employee could be incorporated into the employee’s contract of employment.

The facts

Mrs Sutcliffe began work for the Department for Work and Pensions (“the DWP”) on 18 April 2006 and her maternity leave was due to begin on 1 August.

As she had only been employed by the DWP since April, Mrs Sutcliffe could not claim statutory maternity pay; she did, however, receive Maternity Allowance.

Throughout June and July, Mrs Sutcliffe was absent from work due to pregnancy related complications. She received her full contractual sick pay throughout this period. At the start of her maternity leave in August, the DWP stopped her sick pay and began paying Maternity Allowance instead. Mrs Sutcliffe claimed she was contractually entitled to receive sick pay throughout her maternity leave.

Mrs Sutcliffe relied upon wording in her contract of employment, which provided for the payment of contractual sick pay in full for up to six months, “less any…Maternity Allowance received”. Mrs Sutcliffe argued that this implied that sick pay was payable in addition to Maternity Allowance.

The DWP relied on its maternity leave policy on its intranet, which set out that the period before maternity leave was to be treated as sick leave, and did not allow for sick pay to be paid during maternity leave.

The Employment Tribunal decided in favour of Mrs Sutcliffe and held that she was entitled to receive her contractual sick pay throughout her maternity leave.

The DWP appealed.

The EAT’s decision

The EAT overturned the Tribunal’s decision and found in favour of the DWP.

The EAT held that sick pay is remuneration and that the reference to Maternity Allowance in Mrs Sutcliffe’s contract did not confer on her a right to sick pay during maternity leave, as this was clearly excluded in the DWP’s maternity leave policy.

Furthermore, the policy allowed employees to give notice to terminate their maternity leave early, if they wished to claim sick pay for sickness during maternity leave. Mrs Sutcliffe had not given notice and therefore her maternity leave had run its normal course.

In short, the EAT held:

		remuneration does include sick pay and is therefore excluded from the benefits available during maternity leave; and
		the reference to Maternity Allowance in the contract did not grant a right to sick pay during maternity leave.

Incorporation into the contract

Additionally, the EAT held that the DWP’s maternity leave policy was incorporated into Mrs Sutcliffe’s contract of employment. Despite the fact that Mrs Sutcliffe could not access the intranet site containing the policy, and had not read it, it was enough that the contract stated that the full terms of employment were on the intranet site.

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What does this mean for me?

This case provides clarity on the sometimes complex issue of the payment of sick pay to women with pregnancy related illnesses, before, during and after maternity leave.

However, in relation to the contract point, employers should still err on the side of caution and ensure that all employees are able to access all policies which are not contained within their employment contract.

The following points can be taken from this case.

		Sick pay is classed as remuneration for maternity leave purposes.
		During pregnancy, prior to maternity leave, the normal sick pay rules apply.
		During maternity leave the statutory maternity pay scheme replaces ordinary pay, including sick pay.
		After maternity leave entitlement to sick pay resumes and normal sick pay rules apply.
		There is no need for an employee to physically return to work after maternity leave to receive sick pay.
		A woman may end her maternity leave early by giving 8 weeks notice of her intention to return in order to be entitled to claim sick pay.