Maternity ‘pause clause’ deemed discriminatory

An Employment Tribunal concluded that an employee who went on maternity leave was discriminated against after her employer used a ‘pause clause’ in the training agreement to recoup expensive training costs.

It is another reminder that under the Equality Act, it’s unlawful for an employer to treat someone less favourably because she is pregnant, suffering a pregnancy related illness, on compulsory maternity leave or exercising or seeking to exercise any of her statutory rights, such as ordinary and additional maternity leave.

What are the facts of this case?

In Walworth v Scrivens Ltd, the claimant was an optical advisor.

A training agreement was drawn up for the employee to be trained as a dispensing optician. Under the terms of this agreement, she was required to pay back her training costs if she left the company within three years of registering as a dispensing optician. So if she left employment before 14th December 2016, she was liable to pay £11,000 to her employer and if she left after 15th December 2016 and before the 14th December 2017, she had to pay £5,500.

In August 2015, she informed her employer that she was pregnant and her estimated due date was April 2016. 

She was told by HR that she had only completed 16 months of the three years and the other 20 months would resume upon her return from maternity leave. Essentially, the training repayment period would be ‘paused’.

She went on maternity leave and when discussing her return to leave, various options were discussed as she was struggling to arrange appropriate childcare for her baby, such as whether she could bring her daughter into work or take a sabbatical. She was later reminded that if she did not return to work, she would have to repay £11,000.

On March 13th 2017, she resigned, claiming her ‘contract of employment has been fundamentally broken’ and she has been ‘discriminated against and treated unfavourably’ because she had become pregnant and took maternity leave.

The employer withheld the claimant’s outstanding holiday pay to offset the £11,000 training repayment that it claimed it was owed.

What does the law say about constructive dismissal?

If an employee is forced to resign because an employer has done something that seriously breaches their Contract of Employment, this will be considered constructive dismissal. In these cases, the employee’s resignation is actually considered a dismissal.

If an employee is making a claim for constructive dismissal, an employee needs to show the following:

  1. There must be a fundamental breach of contract by the employer. This means it must be serious enough that it justifies why the employee has been left with no choice but to leave.
  2. The resignation must be as a result of a breach that has already occurred (an actual breach) or a breach the employer intends to do at a later date (an anticipatory breach).
  3. The employee should leave their job in response to the breach. If they stay too long after the breach, it may be considered they have accepted the conduct and ‘affirmed’ the contract.

What did the Employment Tribunal conclude?

The Employment Tribunal held that ‘The imposition and use of the “pause clause” appears to us to be a classic case of unfavourable treatment due to maternity leave, and thus unlawful discrimination on the basis of pregnancy or maternity’.

Although she had been told about this “pause clause” in September 2015, she had only resigned 18 months later. However, the Tribunal did not conclude that she had waited too long before resigning or affirmed the employer’s breach of contract and upheld her claim for constructive dismissal.

Comment

We may see more cases about along similar lines. At the moment, Capita and FDM Group have been in the news as former employees are taking legal action against them for demanding fees when they leave employment. Trainees need to work for a specific length of time after they have undertaken training. If they leave within the stipulated period, they have to pay the training course fees.

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