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You are here: BAILII >> Databases >> England and Wales High Court (Administrative Court) Decisions >> Trades Union Congress, R (on the application of) v Secretary Of State For Trade & Industry [2000] EWHC Admin 345 (23 May 2000)
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Cite as: [2000] EWHC Admin 345

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R. v. Secretary of State for Trade and Industry, Ex parte Trades Union Congress [2000] EWHC Admin 345 (23rd May, 2000)



Case No: CO/376/2000

IN THE SUPREME COURT OF JUDICATURE
QUEEN'S BENCH (DIVISIONAL COURT)
Royal Courts of Justice
Strand, London, WC2A 2LL
Tuesday 23 May 2000
B e f o r e :
LORD CHIEF JUSTICE
Mr JUSTICE MORISON


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R.

- v -



Secretary of State for Trade and Industry,
Ex parte Trades Union Congress



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(Transcript of the Handed Down Judgment of
Smith Bernal Reporting Limited, 180 Fleet Street
London EC4A 2HD
Tel No: 0171 421 4040, Fax No: 0171 831 8838
Official Shorthand Writers to the Court)
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Cherie Booth QC, Dinah Rose, Helen Mountfield, Deok-Joo Rhee (instructed by Thompsons) for the applicant
Jonathan Crow and Rabinder Singh (instructed by the Treasury Solicitor)
for the Secretary of State
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Judgment
As Approved by the Court
Crown Copyright ©


MR JUSTICE MORISON:
This is the judgment of the court.

1. The principal issue on this application is whether the Maternity and Parental Leave etc Regulations 1999 (S.I. 3312/1999) [the Regulations] made by the Secretary of State for Trade and Industry properly transposed into domestic law Council Directive 96/34/EC [the Directive], as extended to the United Kingdom by Council Directive 97/75/EC. In particular, the issue is whether the Secretary of State was entitled in the Regulations to provide that the right to parental leave should be enjoyed only in relation to children born or adopted after commencement date, namely 15 December 1999 [the last day for implementation of the Directive applicable to the United Kingdom].
2. Regulation 13(3) provides:
"An employee is not entitled to parental leave in respect of a child born before 15th December 1999, except for a child who is adopted by the employee, or placed with the employee for adoption by him, on or after that date."
3. It is not necessary to recite the other provisions of the Regulations. It is sufficient to note that they provide for unpaid parental leave of thirteen weeks in respect of each child aged five and under. Only workers who have 12 months' continuous service with their employer are eligible for such leave. In the absence of more favourable terms agreed between employer and worker, no parent may take more than four weeks' leave in any one period of twelve months in respect of any individual child, and if an employer considers that his business would be unduly disrupted by the taking of such leave, the period of leave (notified by the worker to the employer 21 days in advance) may be postponed for up to six months. It is not contended in this case that any Regulation other than Regulation 13(3) fails properly to give effect to the Directive.
4. The Directive is recited to be the proper instrument for implementing the Framework Agreement [the Agreement] to which representative cross-industry organisations had subscribed, and which was concluded on 14 December 1995. The purpose of the Directive is to require Member States to give effect to the Agreement, a copy of which is annexed to it. The Agreement reflects a balance between parents' occupational and family obligations, and a balancing between the interests of management and labour. It sets minimum standards but leaves to Member States the determination of the conditions of access to, and detailed rules for applying for, parental leave
"as long as the minimum requirements of this agreement are respected."
5. The applicant in this case is the Trades Union Congress [TUC] which represents 78 affiliated trade unions and approximately 6.8 million workers. It is a member organisation of the European Trade Union Confederation (one of the signatories to the Agreement) and had an active involvement in the negotiation of the Agreement. The General Secretary of the TUC, in a witness statement provided to the Court, said this:
"The function of parental leave is to assist working people in balancing their work and family obligations, by allowing leave to care for their young children. It is not a right that can be reduced to financial terms, and for a parent who is precluded from exercising their right to parental leave, there can be no adequate compensation for their loss."
6. It is an agreed fact that as at 15 December 1999, there are some 2.7 million parents who would otherwise have qualified for parental leave under the Regulations but for the fact that their children were born before 15 December 1999.
7. On behalf of the Secretary of State, evidence was filed which shows that the difference in cost to employers between implementing the Directive with and without Regulation 13(3) is approximately £58 million. That evidence continues:
"It was this enormous additional cost to employers in the early years of the Parental Leave Regulations which seemed to the Department to weigh so heavily against the implementation of the Directive without a limitation of the sort found in Regulation 13(3)."
8. The Court was informed that formal notice had been served by the Commission on the Irish Government drawing attention to the fact that in the Commission's opinion the Irish implementing legislation was contrary to the Directive. The Irish Government's parental leave legislation came into force on 3 December 1998 and applied only to those children under the age of five who were born or adopted on or after 3 June 1996, the date of the Directive. Having considered the Government's response, largely based upon cost to the employers, the Commission gave a reasoned opinion addressed to the Government rejecting the validity of the Irish Government's explanations. The Commission continued:
"The Directive does not contain any provision permitting Member States to set a date by which children in respect of whom the right to parental leave is exercised must be born. .... By requiring children to have been born after the date of the Directive's adoption, the Irish Government has added a condition which is not permitted by the Directive."
9. The Commission indicated that they had consulted the signatories to the Agreement, and that, at those meetings, the signatory parties agreed with the Commission's interpretation of Clause 2.1 of section II of the Agreement (which we quote below). It is unclear whether the Commission's soundings of the signatories was intended to represent formal compliance with Clause 4(6) of the Agreement, which requires the signatories to provide the Commission with `an opinion' on any question of interpretation of the Agreement. But, at all events, it appears that the signatories were consulted and concur with the Commission's views.
10. We were also provided with an "Analysis of the Implementation of the Parental Leave Directive in the EU Member States" as at 20 October 1999. From this document it appears that the Directive has been implemented in a manner comparable with that in the United Kingdom and Ireland in some other Member States, including Austria and Luxembourg.
11. It is against this background that we consider the arguments presented to us. As they centre on specific provisions of the Agreement, we set them out:
"II. CONTENT
Clause 1: Purpose and scope
1. This agreement lays down minimum requirements designed to facilitate the reconciliation of parental and professional responsibilities for working parents.
2. This agreement applies to all workers, men and women, who have an employment contract or employment relationship as defined by the law, collective agreements or practices in force in each Member State.
Clause 2: Parental Leave
1. This agreement grants, subject to clause 2.2, men and women workers an individual right to parental leave on the grounds of the birth or adoption of a child to enable them to take care of that child, for at least three months, until a given age up to 8 years to be defined by Member States and/or management and labour.
2 . To promote equal opportunities and equal treatment between men and women, the parties to this agreement consider that the right to parental leave provided for under clause 2.1 should, in principle, be granted on a non-transferable basis.
3. The conditions for access and detailed rules for applying parental leave shall be defined by law and/or collective agreement in the Member States, as long as the minimum requirements of this agreement are respected. Member States and/or management and labour may, in particular:
(a) decide whether parental leave is granted on a full-time or part-time basis, in a piecemeal way or in the form of a time-credit system;
(b) make entitlement to parental leave subject to a period of work qualification and/or a length of service qualification which shall not exceed one year;
(c) adjust conditions of access and detailed rules for applying parental leave to the special circumstances of adoption;
(d) establish notice periods to be given by the worker to the employer when exercising the right to parental leave, specifying the beginning and the end of the period of leave:
(e) define the circumstances in which an employer, following consultation in accordance with national law, collective agreements and practices, is allowed to postpone the granting of parental leave for justifiable reasons related to the operation of the undertaking (eg where work is of a seasonal nature, where a replacement cannot be found within the notice period, where a significant proportion of the workforce applies for parental leave at the same time, where a specific function is of strategic importance). Any problem arising from the application of this provision should be dealt with in accordance with national law, collective agreements and practices;
(f) in addition to (e), authorize special arrangements to meet the operational and organizational requirements of small undertakings."
12. For the TUC, it was submitted by Ms Booth QC that the Directive and Agreement clearly gave an immediate entitlement to a minimum right to parental leave for qualifying workers who had parental responsibilities as at the date of implementation. Neither the Directive nor the Agreement provided for a transitional period or phased implementation. However, Member States were afforded an additional year for bringing the Directive into effect if it were necessary [Article 2(2)]
"to take account of special difficulties..."
But to take advantage of such concession the Member State had to inform the Commission of such circumstances. The UK Government did not seek to take advantage of this extension period. Effectively, by Regulation 13(3), the UK Government has unilaterally created its own transitional provision outside the terms of the Directive and Agreement. She stressed that the Agreement conferred a right to parental leave and that the words in clause 2.1 of the Agreement "on the grounds of the birth or adoption of a child" meant simply "because of the birth or adoption". She relied upon the Commission's reasoned opinion and invited the Court to hold that it was clear that the Regulations failed to give proper effect to the Directive and that the Secretary of State had, thereby, acted unlawfully.
13. On behalf of the Secretary of State, Mr Crow agreed that the outcome of the case depended upon the proper interpretation of clause 2.1 of the Agreement. He submitted that the words "on the grounds of the birth or adoption of a child" must have meant something. Since parental leave could only arise if there were parental responsibilities to care for a child, the existence of a child was a `given'. No rights existed before the Agreement had been implemented. The implementation of the Agreement itself creates or grants the right which is "triggered" by the birth or adoption of a child. If the birth or adoption had occurred before the date of implementation there would have been no rights to be triggered at that time by that occurrence. Hence, the Agreement itself contemplated that it would operate only in relation to births and adoptions which occurred after the date of implementation. He drew support for his submissions from the fact that, presumably in good faith, one third of the Member States had implemented the Directive in a similar manner to that adopted by the United Kingdom. He submitted that the Commission, in their reasoned opinion, had not properly reflected the wording of the Agreement. They had transposed for the words "on the grounds of the birth or adoption of a child" the words "have a child". In other words, in their opinion, the Commission were asserting their conclusion without reference to the actual words used in the Agreement. He submitted that the position was clear and we should dismiss the application or, if the position was unclear, make a reference to the European Court of Justice.
14. The argument is short and turns on the proper interpretation of a few words.
15. In our judgment, whilst we consider that the arguments on behalf of the TUC are likely to prevail, essentially for the reasons advanced by Ms Booth, we are not persuaded that the position is clear, so that we should ourselves decide the point at issue without the benefit of guidance from the European Court of Justice. The point is one which concerns a number of other Member States. Although we only know of a reasoned opinion from the Commission in relation to Ireland, it may be that the Commission is or will be making similar approaches to other Member States, including the United Kingdom. Proceedings before the ECJ have the advantage that representations may be made by the Commission and other interested parties. One of the essential roles of the ECJ is to provide the Member States with judgments which have effect throughout the Community so as to ensure universality of approach. It would be inherently undesirable that this Court should give a ruling inconsistent with a judgment which might be given in another Member State or which, later, turned out to be inconsistent with an authoritative ruling of the ECJ. Further, the proper interpretation of this Directive and Agreement, which we think is not entirely clear, is the archetype of a case where a reference is appropriate.
16. We will hear the parties on the terms of the question to be asked of the Court before ourselves settling its terms, in accordance with the recent Practice Direction: Practice Direction (E.C.J. References: Procedure) [1999] 1 W.L.R. 260.
17. The next question which arises is whether this Court should make any interim order to protect those of the of the 2.7 million parents who, if the ECJ were to answer the question in favour of the TUC, would otherwise be deprived of their parental rights under the Directive and Agreement meanwhile. It is not contended that this Court could grant interim injunctive relief. What is contended for on behalf of the TUC is that an interim declaration should be granted, effectively declaring Regulation 13(3) to be unlawful and of no effect. In principle, this Court has power to grant interim relief pending a reference to the ECJ: see R v Secretary of State for Transport ex parte Factortame (No 2) [1991] 1 AC 603. In that case, the Court granted an injunction `to hold the ring' pending the ECJ's clarification of the parties' rights. The rights in question allegedly arose under principles of Community Law which had direct effect. In this case, it was argued that the Directive did not have such effect. It seems to us that whether the Directive has direct effect or not (and we are not asked to decide this issue) interim relief may be granted, where appropriate, and Mr Crow did not submit otherwise. Although we understand that the ECJ is proposing to introduce into its Rules of Procedure an opportunity for some cases to be given priority in the fixing of a hearing date, it is by no means certain that this case would, by comparison with others, be regarded as especially urgent. Therefore we must approach the question of interim relief on the basis that a determination by the ECJ may not occur much before the end of about two years from to-day.
18. In accordance with the principles which govern the grant of interim relief, we first conclude that damages would not be an adequate remedy. On the one hand the parents' loss of rights to unpaid leave is real, in social terms, but unquantifiable. On the other hand, the economic loss which would fall on employers were the applicants to be granted interim relief but fail to establish a breach of their Community law rights would also be irrecoverable. Accordingly, we must have regard to all the relevant circumstances, including the public interest. In this context, the following are the more important factors to which we have had regard:
(1) "...particular stress should be placed upon the importance of upholding the law of the land, in the public interest, bearing in mind the need for stability in our society, and the duty placed upon certain authorities" [including, in particular, we would add, ministers of the Crown] "to enforce the law in the public interest. .... Even so, the court should not restrain a public authority ... from enforcing an apparently authentic law unless it is satisfied, having regard to all the circumstances, that the challenge to the validity of the law is, prima facie, so firmly based as to justify so exceptional a course being taken" (Factortame (No 2) per Lord Goff of Chieveley at pages 673 & 674). We recognise the force of this reasoning, and it would indeed be most unfortunate if the Secretary of State has failed properly to give effect to a Community law right, the more so if he has done so in reliance on a cost argument of doubtful validity. Ministers have a duty to respect Community law, and Courts a duty to ensure that they do. But, for reasons we have already given, we do not regard the TUC's arguments as so clearly correct that effect should be given to them in advance of a determination that they are correct.
(2) Some of the 2.7 million disappointed parents may well have been entertaining an expectation that parental leave would be made available to them by appropriate legislation, as a result of what was foreshadowed by the White Paper presented to Parliament in May 1998 entitled "Fairness at Work" (Cm 3968). There was nothing to suggest that such legislation would take effect on a staged basis, but equally nothing to say that all existing parents with children of the relevant age would have an entitlement.
(3) The social objectives which the Directive is designed to achieve will be `postponed' pending the ECJ's decision. These objectives are important. One of the purposes of the Directive is to enable and encourage more women who are mothers to pursue careers knowing that they can take reasonable time off to fulfil a caring role for their children. Another, is to encourage men to play a more active role in caring for children. The long term effect of these objectives cannot properly be quantified but they are plainly of public importance. On the other hand, until 15 December 1999, unless by voluntary agreement, no parent had any rights to parental leave. On any view, the Regulations introduced by the Secretary of State will help towards fulfilment of the social objectives identified, even with Regulation 13(3).
(4) The Secretary of State invited the Court to conclude that Regulation 13(3) was an integral part of the overall scheme. It is said in the evidence that if that provision were unlawful, then the UK Government would wish to consider re-writing the whole scheme so as to ensure that employers were not faced with undue financial costs. In this context, mention was made, purely by way of argument, that the Secretary of State could review the age limit of five years and reduce it, say, to a lower figure of three years. Accordingly, Mr Crow submits that it would be wrong to confine a declaration to the lawfulness of Regulation 13(3). If we consider Regulation 13(3) to be unlawful, we should condemn the whole scheme so that it can be completely re-drafted. We see the force of that point but, on the other hand, an interim declaration that the whole scheme was unlawful would be detrimental to parents of children born on or after 15 December 1999.
19. Taking account of these matters we are not prepared to say that it would be fair or just to grant interim relief, but we do respectfully invite the ECJ to consider whether this case should not be dealt with as a matter of urgency. If, as we think, the Secretary of State may have acted unlawfully, the sooner this is made clear the better.
20. We turn, therefore, to the final issue which is of no concern to the European Court of Justice, namely whether the Regulations were intra vires the powers to make Regulations conferred by section 76 of the Employment Rights Act 1996. This section was introduced by The Employment Relations Act 1999, Schedule 4.
"76 Entitlement to parental leave
(1) The Secretary of State shall make regulations entitling an employee who satisfies specified conditions -
(a) as to duration of employment, and
(b) as to having, or expecting to have, responsibility for a child,
to be absent from work on parental leave for the purpose of caring for a child.
(2) The regulations shall include provision for determining -
(a) the extent of an employee's entitlement to parental leave in respect of a child;
(b) when parental leave may be taken.
(3) Provision under subsection 2(a) shall secure that where an employee is entitled to parental leave in respect of a child he is entitled to a period or total period of leave of at least three months; but this subsection is without prejudice to any provision which may be made by the regulations in which -
(a) a person ceases to satisfy conditions under subsection (1)
(b) an entitlement to parental leave is transferred.
(4) Provision under subsection (2)(b) may, in particular, refer to -
(a) a child's age, or
(b) a specified period of time starting from a specified event.
(5) Regulations under subsection (1) may -
(a) specify things which are, or are not, to be taken as done for the purpose of caring for a child;
(b) require parental leave to be taken as a single period of absence in all cases or in specified cases;
(c) require parental leave to be taken as a series of periods of absence in all cases or in specified cases;
(d) require all or specified parts of a period of parental leave to be taken at or by specified times;
(e) make provision about the postponement by an employer of a period of parental leave which an employee wishes to take;
(f) specify a minimum or maximum period of absence which may be taken as part of a period of parental leave;
(g) specify a maximum aggregate of periods of parental leave which may be taken during a specified period of time."
21. Ms Booth submitted that the power to make Regulations did not include the power to make Regulation 13(3). In our view, Mr Crow was correct when he answered that section 76 does not purport to confer rights on parents, but provides a power or duty for the Secretary of State to make regulations. Section 76(1)(b) and 76(2)(a) were wide enough to enable the Secretary of State to introduce Regulation 13(3). The real complaint in this case is not so much directed at the Secretary of State's powers but rather at the way he has exercised them. It seems to us that if the Secretary of State was entitled in Community law to introduce Regulation 13(3) then the section empowered him to do it; if Regulation 13(3) is unlawful because he was not so entitled in Community law then the issue of vires does not arise.
22. We accordingly make no order on this application, save that a question be referred to the Court of Justice for a ruling.

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