The European Court of Justice's ("ECJ") has delivered its decision in respect of the Belgian case of Meerts V Proost NV. It held that an employee dismissed during part time parental leave should be paid compensation for loss of her employment based on her normal working hours. Although this does not directly effect UK legislation and is unlikely, in reality, to become an issue, it is interesting because it potentially leaves the door open to a challenge to UK legislation on the amount of notice pay in parental leave.
Parental Leave in the UK
In the UK, employees are entitled to take up to 13 weeks of parental leave in respect of each child. This leave must be taken in blocks of one week and before the relevant child's 18th birthday. Parental leave is also generally unpaid. Unlike in Belgium, employees are not entitled to take parental leave in the form of part time working. The ECJ's decision does not therefore have a direct effect on the UK regime.
The amount of notice pay paid by employers to employees taking advantage of family friendly rights such as parental leave, paternity leave, adoption leave or maternity leave ("Family Friendly Leave") is governed by the Employment Rights Act 1996 (the "ERA"). In particular, the ERA provides that if an employer terminates an employee's contract whilst on Family Friendly Leave, the employer must pay that employee his/her salary for the length of his/her statutory notice period based on his/her normal working hours. The UK regime, at least initially, seems to provide those taking advantage of Family Friendly Leave with greater protection than Belgian law.
However, section 87(4) of the ERA states that if the employee on Family Friendly Leave has a contractual notice period which requires the employer or employee to give at least one week more notice than required under the statutory provisions, the above provisions do not apply. The effect is that those employees who have negotiated longer contractual notice periods than they would be entitled to under statute, do not gain the protection of the ERA in respect to notice pay whilst on Family Friendly Leave. This potentially leaves them exposed to receiving notice pay based on the lower amount of Family Friendly Leave pay which they are receiving at the time of their dismissal.
Further, the relevant Family Friendly Leave regulations (Maternity and Parental Leave etc. Regulations 1999 and Paternity and Adoption Leave Regulations 2002) suggest that those employees with contractual notice periods of more than they would be entitled to under statute, are not entitled to notice pay at the full rate of their normal working hours because terms and conditions relating to their remuneration do not apply during Family Friendly Leave.
Facts of Meerts v Proost NV
In the Belgian case of Meerts v Proost NV, Ms Meerts had been employed on a full time basis by Proost NV since September 1992 under a contract of ‘indefinite duration'. Over the years she had taken various career breaks and in November 2002 she started to work half-time as a result of taking parental leave. Unlike in the UK, in Belgium parental leave can be taken on a part time basis.
In May 2003, Ms Meerts was dismissed with immediate effect and was paid the equivalent of 10 months of her part time parental leave salary by way of compensation. She argued that she was entitled to 10 months compensation based on her normal full time salary. The case rose through the Belgium appeal system until, eventually, the Belgian Court of Cassation referred the issue to the ECJ for a preliminary ruling.
Belgian & UK Law on the Termination of a Contract of Employment
In brief, when an employer dismisses an employee without either ‘urgent cause' or the necessary notice period, Belgian law requires it to pay the employee ‘compensation' for their notice period based on their current salary.
Similarly, in general, if an employer in the UK dismisses an employee (other than summarily) without the employee working his/her notice period, it is required to pay the employee his/her full contractual entitlements for the relevant notice period.
The ECJ held that Ms Meerts' compensation should be based on her full time working hours and not reduced to reflect the fact that she was taking part time parental leave when Proost NV chose to dismiss her. In its judgment, the ECJ emphasised that one of the objectives of the Framework Agreement on Parental Leave was to encourage the introduction of new flexible ways of organising work in a family friendly way.
Clause 2.6 of the Framework Agreement in particular, states that "rights acquired or in the process of being acquired by the worker on the date on which parental leave starts shall be maintained as they stand until the end of parental leave". The ECJ noted the opinion of the Advocate General in particular. He argued that interpreting the national legislation in favour of Proost NV could have the effect that employees are discouraged from taking parental leave and could encourage employers to dismiss those employees on parental leave rather than those who are not. The matter was therefore concluded in favour of Ms Meerts.
The ECJ ruling that an employee on part time parental leave should be paid in respect of their notice period based on the amount of their salary before they took part time parental leave leaves the door open to a challenge to national legislation. In particular, those who are dismissed during their Family Friendly Leave could argue that section 87(4) of the ERA contradicts the objective of the Framework Agreement on Parental Leave and that they should be paid at their normal rate of pay for the full term of their contractual notice period.
In the meantime, it could be suggested that those individuals on Family Friendly Leave are exposed to a higher risk of dismissal because their notice pay could arguably be paid at a lesser rate than their counterparts who are not on Family Friendly Leave, and thereby save their employer money. Since dismissals during Family Friendly Leave are often for reason of redundancy, the current economic climate will not help to settle their concerns.
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