In Campus Living Villages UK v Commissioners for HMRC & Sexton, Ms Sexton was employed by Campus Living as Head of Finance. She was made redundant whilst pregnant and consequently brought claims of unfair dismissal and pregnancy discrimination.
The parties reached an agreement, documented in a COT3, that Ms Sexton would receive a lump sum payment of £60,000 in full and final settlement of all and any claims. However, Ms Sexton subsequently complained to HMRC that she had not been paid her Statutory Maternity Pay (SMP). As she had received a bonus during the relevant reference period for SMP, her claim was worth over £42,000.
The HMRC upheld the complaint and Campus Living appealed to the Tax Tribunal relying on the COT3 to argue Ms Sexton had settled her claims. However, the Tax Tribunal held that SMP is an “absolute right” and cannot be contracted out of.
This case is a clear illustration of the need for employers to seek clear legal advice before settling any pregnancy related claims to ensure all potential liabilities including SMP are taken account of.