Company with policy to not pay maternity allowance ‘discriminated against pregnant worker’

21 Aug 2019 By Maggie Baska

Tribunal rules in favour of expectant mother as experts highlight the dangers of organisations avoiding their legal obligations

A pregnant pharmaceutical worker was discriminated against after her boss said it was the company’s policy “not to pay statutory maternity pay”, a Watford employment tribunal (ET) has ruled. 

The tribunal also ruled the new mother was unfairly dismissed, subjected to unlawful detriments and had not been given written reasons for her dismissal. 

Judge Oliver Mark Hyams said the reason for Subashini Davuluri’s dismissal was “hotly disputed”, but accepted her argument that she had been dismissed by Pharmvit, a pharmaceutical company, because they wanted to avoid the need to pay her statutory maternity pay (SMP).

Davuluri was employed by Pharmvit from February 2017 until her dismissal on 29 December the same year. On 31 October, Davuluri was told her role was being made redundant; however, she told the tribunal that at this stage the termination of her contract was not discussed.

Subsequent to that, on 29 November, Davuluri informed her bosses she was pregnant. She told the tribunal that, as a result of this disclosure, the firm began discussing her termination.

Termination was first discussed in a meeting on 8 December with Davuluri’s boss, Khalid Latif, who is listed as a company director. The tribunal heard that during the meeting, Davuluri was told she should have considered the 31 October her notice that her contract was being terminated, and as such her three months’ notice would end on 29 December.

Davuluri told the tribunal that during this meeting Latif said she would not be paid SMP, that it was Pharmvit’s policy not to pay SMP, that he had never before paid SMP to any of his employees and that he had instead helped employees get statutory maternity allowance (SMA). 

SMA is funding paid by the government if pregnant workers can not get SMP from their employer or do not qualify for SMP.  

The tribunal heard Latif then asked Davuluri instead to resign in December so that her notice period ended in March, telling her she could then apply for SMA through a Jobcentre. He said that, if necessary, he would provide her with a letter to help her claim SMA, and that he would give her an opportunity to rejoin Pharmvit and continue her job after the end of her maternity leave. 

Davuluri told the tribunal that during this meeting Latif also said that, since she was on a restricted visa as an Indian national and as such precluded from having access to public funds, Latif could not pay her SMP. Davuluri replied that SMP was not public funds, and that she would have to think about their discussion. 

Latif told the tribunal he had given Davuluri notice of her termination on 31 October, and that was why he suggested she go to the Jobcentre to claim SMA; however, the tribunal preferred Davuluri’s version of events.

Latif also told the tribunal he was concerned about Pharmvit’s potential liability for a breach of immigration law if paying Davuluri SMP amounted to giving her access to public funds.

Davuluri emailed Latif on 14 December before going to work saying she had discussed their earlier meeting with her husband who said it was the law that employers pay SMP. She added that SMP did not come under public funds and would not be in breach of her visa or immigration laws. 

She went to work that day and, before she was due to leave, Latif asked to meet with her. She told the tribunal that he “raised his voice” and shouted: “You can go legally if you want, but I will not pay SMP.”

Davuluri said Latif had threatened to terminate her employment immediately, that he “was not willing to give a single penny as SMP” and had threatened to give her a bad reference when she tried to get a job in the future. 

Latif denied having this conversation with Davuluri, although admitted that she may have had a conversation with him that day but could not recall what it was about.

Davuluri met with Latif three more times on 19, 27 and 29 December and covertly recorded the meetings. These recordings detailed discussions between Davuluri  and Latif in which they discussed her termination, notice period and employment contract. 

During these conversations, Davuluri asked for her dismissal and termination letters in writing but was told instead to “just pick up the phone” if she needed anything or had questions.

She wrote to Pharmvit on 29 December detailing that she believed Latif was dismissed her because she was pregnant, and that this was discrimination against her because of her pregnancy.

Latif wrote back on 2 February 2018 saying Davuluri was dismissed because she was being made redundant as her role was a junior position and was being absorbed by other members of the company. 

The tribunal heard the SMP was subsequently paid by Pharmvit in a lump sum after Davuluri  had received the help of HMRC staff in persuading Pharmvit to pay the SMP. 

The ET ruled in favour of Davuluri and found the dismissal of a pregnant woman to avoid paying her SMP amounted to discrimination because the reason for dismissal is connected with her pregnancy.

The ET also ruled Davuluri had been unfairly dismissed, not been provided with written reasons for her dismissal and had been subjected to unlawful detriments.

The tribunal set a provisional remedy hearing for 13 September 2019. 

Kate Palmer, associate director of advisory at Peninsula UK, said this case sent a “clear message” to employers on the dangers of trying to avoid their legal obligation to provide SMP to eligible employees.

“As long as the employee meets the required criteria, including providing the relevant notice, employers must be prepared to pay them at least the current rate of SMP regardless of whether the employee is to come back to work at the end of her maternity leave,” Palmer said. “Making an employee redundant once she has met this criteria makes no difference.”

She added that ETs would “not look kindly” on employers deliberately trying to avoid their legal obligations by misleading employees or the tribunal by, for example, taking steps to avoid a paper trail. She said employers would find it difficult to defend their actions before a tribunal, and it will be “more likely” the tribunal will not find in their favour.

Pharmvit has been contacted for comment.Davuluri could not be reached for comment.

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