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You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Crouch v Kidsons Impey [1995] UKEAT 947_94_0911 (9 November 1995)
URL: http://www.bailii.org/uk/cases/UKEAT/1995/947_94_0911.html
Cite as: [1995] UKEAT 947_94_911, [1995] UKEAT 947_94_0911, [1996] IRLR 79

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    BAILII case number: [1995] UKEAT 947_94_0911

    Appeal No. EAT/947/94

    EMPOLYMENT APPEAL TRIBUNAL

    58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

    At the Tribunal

    On 26th September 1995

    Judgment delivered on 9th November 1995

    Before

    HIS HONOUR JUDGE J HICKS Q.C.

    MR D G DAVIES

    MR R N STRAKER


    MRS A J CROUCH          APPELLANT

    KIDSONS IMPEY          RESPONDENTS


    Transcript of Proceedings

    JUDGMENT

    Revised


     


    APPEARANCES

    For the Appellant MR M FOSTER

    (Solicitor)

    Fynmores

    10-12 Parkhurst Road

    Bexhill-on-Sea

    East Sussex

    TN40 1DF

    For the Respondents MR R MCMANUS

    (of Counsel)

    Dean - Wilson

    95 Church Street

    Brighton

    East Sussex

    BN1 1UJ


     

    JUDGE HICKS: This appeal concerns the rights of an employee who is absent from work because of pregnancy, and turns on the provisions of the Employment Protection (Consolidation) Act 1978 as they stood before the amendments incorporated by virtue of the Trade Union Reform and Employment Rights Act 1993. As now amended the Act distinguishes between maternity leave, which seems clearly to be an incident of a continuing contract of employment, and the right to return to work at or after the end of such leave, which may well be when the contract of employment has come to an end. The provisions which governed the facts of the present case made no such distinction, being expressed solely in terms of a right to return, and that may be the cause of much of the confusion into which, as it seems to us, both the Industrial Tribunal and the parties have fallen.

    It is necessary to set out the relevant parts of the 1978 Act, as it stood at the material time, fairly fully:

    "Rights of employee in connection with pregnancy and confinement

    (1) An employee who is absent from work wholly or partly because of pregnancy or confinement shall, subject to the following provisions of this Act,-

    (a) be entitled to be paid by her employer a sum to be known as maternity pay;

    and

    (b) be entitled to return to work.

    (2) Schedule 2 shall have effect for the purpose of supplementing the following provisions of this Act in relation to an employee's right to return to work.

    (3) An employee shall be entitled to the rights referred to in subsection (1) whether or not a contract of employment subsists during the period of her absence but, subject to subsection (4), she shall not be so entitled unless-

    ...

    (d) in the case of the right to return, she informs her employer in writing at least twenty-one days before her absence begins, or if that is not reasonably practicable, as soon as reasonably practicable,-

    (i) that she will be (or is) absent from work wholly or partly because of pregnancy or confinement,

    (ii) that she intends to return to work with her employer, and

    (iii) of the expected week of confinement or, if the confinement has occurred, the date of confinement.

    ...

    45 Right to return to work

    (1) The right to return to work of an employee who has been absent from work wholly or partly because of pregnancy or confinement is, subject to the following provisions of this Act, a right to return to work with her original employer, or, where appropriate, his successor, at any time before the end of the period of twenty-nine weeks beginning with the week in which the date of confinement falls, in the job in which she was employed under the original contract of employment and on terms and conditions not less favourable than those which would have been applicable to her if she had not been so absent.

    ...

    47 Exercise of right to return to work

    (1) An employee shall exercise her right to return to work by [giving written notice to] the employer (who may be her original employer or a successor of that employer) at least [twenty-one] days before the day on which she proposes to return to her proposal to return on that day (in this section referred to as the "notified day of return").

    ...

    48 Contractual right to return to work

    (1) An employee who has a right both under this Act and under a contract of employment, or otherwise, to return to work, may not exercise the two rights separately but may in returning to work take advantage of whichever right is, in any particular respect, the more favourable.

    (2) The provisions of section 45, 46, 47, 56 and 86 and paragraphs 1 to 4 and 6 of Schedule 2 shall apply, subject to any modifications necessary to give effect to any more favourable terms, to the exercise of the composite right described in subsection (1) as they apply to the exercise of the right to return conferred solely by this Part.

    ...

    55 Meaning of "dismissal"

    (1) In this Part, except as respects a case to which section 56 applies, "dismissal" and "dismiss" shall be construed in accordance with the following provisions of this section.

    (2) Subject to subsection (3), an employee shall be treated as dismissed by his employer if, but only if,-

    (a) the contract under which he is employed by the employer is terminated by the employer, whether it is so terminated by notice or without notice, or

    (b) where under that contract he is employed for a fixed term, that term expires without being renewed under the same contract, or

    (c) the employee terminates that contract, with or without notice, in circumstances such that he is entitled to terminate it without notice by reason of the employer's conduct.

    ...

    56 Failure to permit woman to return to work after confinement treated as dismissal

    Where an employee is entitled to return to work and has exercised her right to return in accordance with section 47 but is not permitted to return to work, then [subject to section 56A] she shall be treated for the purposes of this Part as if she had been employed until the notified day of return, and if she would not otherwise be so treated, as having been continuously employed until that day, and as if she had been dismissed with effect from that day for the reason for which she was not permitted to return.

    ...

    SCHEDULE 2

    SUPPLEMENTARY PROVISIONS RELATING TO MATERNITY

    PART I

    UNFAIR DISMISSAL

    Introductory

    1. References in this Part to provisions of this Act relating to unfair dismissal are reference to those provisions as they apply by virtue of section 56.

    Adaptation of unfair dismissal provisions

    ...

    2.-(4) The following provisions of this Act shall not apply, that is to say, sections 55 [[58(3) to (12)], 64(1), 65, 66, 73(5) and (6), 141(1), 144(2) [and 145(2)], paragraph 11(1) of Schedule 13, paragraphs 7(1)(f) to (i) and (2) and 8(3) of Schedule 14 and paragraph 10 of Schedule 15.

    ...

    PART III

    General

    Dismissal during period of absence

    6.-(1) This paragraph applies to the dismissal of an employee who is under this Act entitled to return to work and whose contract of employment continues to subsist during the period of her absence but who is dismissed by her employer during that period after the beginning of the eleventh week before the expected week of confinement.

    (2) For the purposes of sub-paragraph (1), an employee shall not be taken to be dismissed during the period of her absence if the dismissal occurs in the course of the employee's attempting to return to work in accordance with her contract in circumstances in which section 48 applies.

    (3) In the application of Part V of this Act to a dismissal to which this paragraph applies, the following provisions shall not apply, that is to say, sections [[58(3) to (12)], 58A], 64, 65, 66, 141(2), 144(2) [and 145].

    (4) Any such dismissal shall not effect the employee's right to return to work, but-

    (a) compensation in any unfair dismissal proceedings arising out of that dismissal shall be assessed without regard to the employee's right to return; and

    (b) that right shall be exercisable only on her repaying any redundancy payment or compensation for unfair dismissal paid in respect of that dismissal, if the employer requests such repayments."

    We shall have to return to some of those provisions at later points in this judgment by reference to the facts of this case, but make some preliminary general points here. In the first place Mr McManus, for the employer, sought to draw a distinction between the right to return to work, as referred to in (e.g.) section 33(2), and entitlement to that right, as referred to in (e.g.) section 33(3). In our view there is no such distinction; the "right" in 33(2) is that conferred by the word "entitled" in 33(1). There is, however, plainly an important distinction between becoming entitled to the right conferred by section 33 and exercising that right under section 47.

    Secondly, the Industrial Tribunal's reasons and the arguments before us (persisted in by Mr McManus, at least) treat paragraph 6(2) of Schedule 2 as a substantive provision. In our view it plainly is not. Paragraph 6 is described generally by its title as being concerned with dismissal during a period of absence, but it is sub-paragraph (1) which truly defines its scope: it is to apply to a dismissal if (i) the employee has a statutory right of return, (ii) her contract of employment continues during the period of her absence, and (iii) she is dismissed during that period (after a certain date). The words "period of her absence" in that set of conditions were clearly thought by the draughtsman to need adaptation if section 48 applies, that is if there is a contractual as well as statutory right of return, and sub-paragraph (2) deals with that situation by providing that in those circumstances the dismissal is not to be taken to have occurred during the period of absence if it occurs in the course of the employee's attempting to return in exercise of her contractual right. That provision, however, is only "for the purposes of sub-paragraph (1)"; in other words it is only an interpretative or "deeming" provision ancillary to sub-paragraph (1), which itself is concerned only to define the scope of the paragraph. Neither (1) nor (2) contains any substantive provision; the substantive provisions are in sub-paragraph (3), which dis-applies certain sections of the Act from any dismissal "to which this paragraph applies" and sub-paragraph (4), under which "any such dismissal" is not to affect the employee's right to return to work, with certain qualifications.

    The third point to note at this stage is that section 56 seems to contain the only statutory extension (or rather deemed extension) of the contract of employment in this context. Section 33(3), in particular, expressly refrains from interfering with the contractual regime in that respect by its use of the words "whether or not a contract of employment subsists during the period of her absence", and the terms of section 45(1) are clearly applicable primarily to a situation in which "the original contract of employment" no longer subsists. It is important, in our view, to disabuse oneself of any presumption that whenever a right to return exists under the statute (whether directly or by virtue of section 48), still less whenever its existence may be in issue, the contract of employment remains in existence. Whether it does so or not, and if so for how long, are simply matters of contract.

    We turn to the relevant facts, taken for the most part from un-appealed findings of the Industrial Tribunal, but supplemented where necessary by matters agreed before us by the parties.

    The Appellant, Mrs Crouch, had been employed by the Respondents, Kidsons Impey, who are accountants, for more than five years, and was a senior secretary. Her contract of employment contained terms relating to pregnancy to substantially the same effect as the statutory provisions, with the exception that the words "or if that is not reasonably practicable , as soon as reasonably practicable" in section 33(1)(d) were not reflected in the contract. She left work on 11 March 1993 while pregnant and never returned. She did not at any time serve a notice complying with section 33(1)(d) or with the corresponding provisions of her contract. There was no waiver by the employers of that requirement (a major issue of fact before the Tribunal). She gave birth to her child on 26 May 1993. The employers paid and she accepted statutory maternity pay "for the appropriate period of time after the birth of the baby" (paragraph 8 of the Tribunal's reasons) - in fact until 30 September 1993. On 14 November 1993 she wrote to the employers giving notice of her wish to return to work on 6 December 1993. That was ineffective as a section 47(1) notice because of the failure to give a section 33(1)(d) notice. On 18 November 1993 she had a meeting with Mr Powell, a partner in the Respondent firm, in which he told her that since she had not given the requisite notice at the commencement of her maternity absence she had no right to return, and that there was no job for her to return to.

    Applying the law to those facts our initial conclusions are as follows:

    (1) Since there was no notice complying with section 33(1)(d) or the corresponding term of the contract, nor any waiver of the requirement for such a notice, there was no right to return to work.

    (2) It follows from (1) that none of the statutory provisions dependent upon the existence of such a right applied, specifically sections 47, 48 and 56 and schedule 2.

    (3) Since section 56 did not apply the question whether the contract of employment continued was one to be decided according to the terms of the contract and the common law, and for that purpose the contractual provisions as to return after maternity were themselves of no application, since the requisite notice had not been given.

    (4) At common law an employee who leaves work because she is pregnant, with no other justification and without any right of return, is (like any other employee who defaults without justification on the fundamental obligation to attend and work as directed during working hours) clearly in repudiatory breach of contract, and if the employer thereupon ceases to pay her that, in the absence of any other explanation, is an acceptance of the repudiation and thus a discharge of the contract.

    (5) If, in such circumstances, the employee leaves work with the justification of her employer's consent the effect on her employment is a matter to be decided on the basis of the consensual (and therefore contractual) arrangement reached, which may be express or implied. If there is a bare consent, without more, and remuneration ceases, the appropriate inference is that there has been an agreed termination.

    (6) Here there was no express consent, but the employers did pay, and the employee accept, statutory maternity pay until 30 September 1993, at which date (as we understand it) all pay ceased without objection by the employee. That could be interpreted as a consensual extension, to be inferred from the parties' conduct, in the form of terminal maternity leave, the employment ending by consent at the expiry of that leave, or as waiver of the initial repudiation by the employer, followed by acceptance of the fresh or continued repudiation constituted by the employee's failure to return to work on 1 October 1993, or possibly as the creation of a mutual estoppel against denial of the existence of the contract of employment during the period of payment and receipt of maternity pay.

    (7) We are inclined to think that the first of the possibilities described in (6) is the most natural interpretation of events, but we need not decide between them, because on any view the employment terminated at latest on 30 September 1993 or the first pay day thereafter. The concept of the continued existence of some sort of "ghost" contract of employment, with none of the ordinary rights or obligations of such a contract, seems to us a wholly fanciful intention to impute to the parties if the "overlay" of the expectations and assumptions arising from familiarity with the statutory regime is removed, as for this purpose it should be.

    (8) There was therefore no contract of employment subsisting on 18 November 1993 and no dismissal then or at all.

    That being our clear initial view without reference to the reasons of the Industrial Tribunal, the arguments before us or the authorities, we turn to consider whether we are persuaded or compelled by any of them to come to a different conclusion.

    We start with the authorities, because discussion of them permeated the arguments here and below and the reasons of the Industrial Tribunal.

    The earliest case cited to us is Lavery v Plessey Telecommunications [1983] IRLR 203. In that case there was a valid section 33 notice but no valid section 47 notice. The employee's attempt to return to work was rejected by the employer and her claim of unfair dismissal failed in the Industrial Tribunal and, for different reasons, in the Employment Appeal Tribunal. In the Court of Appeal all grounds of appeal were abandoned except one. In approving this course in one particular respect as "clearly correct" the Court of Appeal said: "An employee who relies solely on her statutory right to return to work and has not complied with the provisions of s. 47(1) relating to notice cannot rely on s. 56 for the purposes of asserting that a refusal to permit her to return to work constitutes a deemed dismissal". That must be equally applicable, if not a fortiori, where there is a failure to comply with section 33.

    The one ground argued in the Court of Appeal depended on the proposition that the employee's contract of employment continued, by inference from the parties' words and conduct, after she stopped working, and still subsisted at the date of the refusal of the employer to allow her to return. The Court of Appeal found it impossible to reach a firm conclusion as to whether or not the contract of employment continued to subsist after she left work, but assumed in her favour that it did for the purpose of considering the remaining steps in her argument, which it then rejected. Those steps involved submissions in the alternative that (i) there was a deemed dismissal by the combined effect of section 55 and paragraph 6 of schedule 2 of the Act, or (ii) there was a contractual modification of her statutory right to return enabling her to rely on section 56 without having given the statutory notice under section 47.

    Since the decision in Lavery depended upon an assumption of a continuing contract of employment which does not apply here it cannot, in our view, govern the facts of this case.

    The next case was McKnight v Addlestones (Jewellers) Ltd [1984] IRLR 453. The employee there had not given notice under the equivalent (in the relevant Northern Ireland legislation) of section 33. The Industrial Tribunal had found that her employment nevertheless continued during maternity leave and that the employer's refusal to let her return amounted to a dismissal under the equivalent of section 55. The Northern Ireland Court of Appeal described such a continuation as "somewhat unusual", and although it did not disturb that finding of fact it held that the only inferences as to the parties' intentions which could reasonably be drawn from that finding were that their mutual rights and obligations as to remuneration and work were suspended and that the contract was to continue in existence on the basis only that the employee might be entitled in due course to exercise the statutory right to return, in which case the contract would revive and become fully operative again, so that if (as happened) the employee failed to exercise that right effectively then the whole basis for continuation would be gone and the contract would automatically terminate. It therefore held that the Tribunal had been wrong in law in holding that the employee had been dismissed.

    The Northern Ireland Court of Appeal set out its view of the position at common law and under the legislation in three propositions, of which the following extracts are relevant, with the appropriate adaptations of the statutory references:

    "(1) Where a former employee has no contractual right to return to work after her confinement, then she cannot complain of an ordinary dismissal if she is not in fact allowed to return. As far as the law is concerned she has simply left her job to have her baby and a claim for ordinary dismissal is out of the question. ...

    (3) If ... the employee has no contractual right to return to work, and, by failure to comply with the requirements of [section 47], has lost her statutory right to return, a refusal to have her back is neither an ordinary dismissal under [section 55] nor a special dismissal under [section 56]."

    We agree, with the qualification that if the parties have expressly agreed that the contract of employment shall continue, or if the proper inference from the facts is that they have impliedly done so, then any termination during the currency of such an agreed continuation will be a dismissal if it falls within one of the heads of section 55(2). Such an inference is not lightly to be drawn, however, as to any period beyond the end of maternity leave.

    In Duwuona v John Lewis PLC [1987] ICR 788 the employee had served a valid section 33 notice but not a valid section 47 notice. The facts were therefore similar to those of Lavery and the Court of Appeal followed and applied that case. The decision does not, in our view, cast any further light on the issues before us.

    Mr Foster, for the Appellant, relied on Hilton International Hotels (UK) Ltd v Kaissi [1994]IRLR 270. In that case the pregnant employee was already on sick leave before her maternity leave was due to begin and continued to receive sick pay until the birth of her baby on 30 October 1990. She then received statutory maternity pay until 16 January 1991. On 20 February 1991 she submitted a medical certificate in support of a letter stating that she was unable to return to work due to illness. On 25 February 1991 the employer replied, stating that her employment had been terminated. In the employer's notice of appearance to the employee's application to the Industrial Tribunal the employer stated that the date on which employment ended was 25 February 1991. The employee had served no section 33 notice. The Tribunal found that she remained an employee of Hilton down to 25 February 1991 and that the employer's letter of that date was a dismissal within section 55(2)(a) and was unfair. The Employment Appeal Tribunal dismissed the employer's appeal.

    That decision has two aspects. In the first place its ambit is strictly that the Industrial Tribunal did not err in law, and indeed it is expressed in those terms at the beginning of paragraph 23. That involves, in particular, that the Tribunal did not err in law in reaching the crucial finding of fact that the contract of employment continued until 25 February 1991. Much of paragraph 23 of the judgment is concerned with drawing attention to factors which justify that conclusion. The fact that the employee was on sick leave and continued to receive sick pay down to the date of birth is said to be "consistent with the continuation of her contract, not with its termination". Mrs Kaissi's contract provided expressly for maternity leave, and it is said that in cases where there has been a section 33 notice but no section 47 notice "it has been held that the contract of employment may continue to exist while [the employee] is on maternity leave, unless it is terminated by agreement, resignation or dismissal". It is also said that when Mrs Kaissi stopped receiving maternity pay "she simply continued on leave from work with the permission of Hilton". The judgment had earlier stated that the employer's agreement in its notice of appearance that employment ended on 25 February 1991 was important.

    On issues of fact other cases are merely illustrative, and there are clearly important distinctions between the facts in Kaissi and those in the present case. Mrs Crouch was not off sick on 1 March 1993; she simply stopped work. The finding that Mrs Kaissi was still employed while on sick leave was not merely understandable but virtually inevitable; it has no counterpart here. Mrs Crouch was not applying for an extension of leave because of illness when the employer told her that her employment had terminated, but attempting to exercise a non-existent right to return. The employer's notice of appearance here did not give 18 November 1993 as the date of the end of her employment, but 30 September 1993. It is not for us to express any view as to the findings of fact made by the Industrial Tribunal in Hilton, but we see nothing in those findings, or in the evidence on which they were based, to persuade us that our own initial inferences from the primary facts here are wrong.

    The second aspect of the judgment in Hilton concerns its statement of principle, which in our understanding is to be found at the end of paragraph 23(3):

    "The essential point is that the question whether or not the contract of employment comes to an end depends on the agreement and actions of the parties, which may differ from case to case. In brief, the contract may continue if that is what the parties expressly or impliedly agree and neither takes any action to bring it to an end. If the parties agree expressly or impliedly to bring a contract to an end or either of them takes appropriate action to bring it to an end, then the contract will determine. The continuance or discontinuance of the contract is a matter of contract, not a matter of statute."

    We agree, and see nothing in that statement inconsistent with our own approach to the facts of this case.

    We were, finally, referred to an unreported decision of Judge Hull QC in the Epsom County Court: Hills v Securicor Ltd (7 March 1995). The issue there was whether the action of the employer in transferring the employee to a "holding register" amounted to dismissal. The incidents of that status included the absence of any obligation to work or entitlement to remuneration, freedom to obtain other employment and a procedure for returning to work which was accompanied by many, if not all, of the circumstances which would attend starting afresh, including the existence of a "suitable established vacancy". Judge Hull said:

    "When I look here at the terms of this contract it appears to me that there are .... no incidents of an employment contract whatever. It is quite wrong to say that Mr Hills was suspended, or that he was laid off. ... I am entirely satisfied .... that there was, after the transfer to the holding register ... at the latest no relationship of ... employer and employee whatever."

    Those were very different circumstances, but the approach is consistent with our own disinclination to infer the continuance of a contract of employment when all its normal incidents have ceased to exist.

    That brings us to the decision of the Industrial Tribunal in this case. The most striking feature of the Tribunal's reasons is that, having made the findings of primary fact (who said and did what, and when) which we have already summarised, they do not at any point address as an issue of fact, or make any finding on, the question whether the contract of employment continued, and if so for how long. The discussion is solely in terms of the existence or otherwise of a right to return to work. That the Tribunal have assumed, without finding, that the contract continued is apparent only from their discussion whether the statutory conditions for the application of section 55 obtained as at 18 November 1993 (which would be irrelevant if there were then no employment), and from their acceptance that the result of their decision that there was no dismissal was that there continued after 18 November 1993, and still existed at the date of their decision, the "empty shell of the contract". They treat their decision as turning on whether the facts are governed by Lavery or Hilton and prefer the former, which they consider to be binding on them. Lavery was indeed binding on them, as it is on us, so far as it is in point, but for the reasons we have given we do not consider that it is.

    The Appellant's skeleton argument begins: "The Appellant adopts and accepts both the Respondent's and the Tribunal's view that the contract of employment continued as a matter of fact and law beyond her maternity leave". As we have indicated, the Tribunal do indeed seem to have had that "view", but they made no such finding of fact, and we have already made it clear that in agreement with both Lavery and Hilton we consider that it is an issue of fact, not law, albeit one to be determined, in the circumstances of this case, by inference from the undisputed primary facts. The Appellant's argument depends entirely on there having been a contract of employment still in existence on 18 November 1993, for without that there cannot have been the dismissal on that date for which she contends. Mr Foster has said nothing to dissuade us from our conclusion that there was no such contract, and that basis for the appeal therefore fails. We must return at the end to the consequences of our conclusion that the Tribunal erred in a quite different way from that which he advances.

    The Respondent's skeleton argument does indeed, as the Appellant's implies, seem to proceed on the basis that the contract of employment was in existence on 18 November 1993, and that the Tribunal's decision should be upheld on the basis of its own finding that there was on that date no dismissal, so that the contract continued and continues. In oral argument, however, Mr McManus not surprisingly also advanced the alternative proposition that employment ceased on 30 September 1993, citing McKnight in support. Since we take that view ourselves we need not go over the ground, much traversed in the Tribunal's reasons and in the arguments before us, whether Lavery and the interpretation which it puts (or is alleged to put) on the statutory provisions (especially paragraph 6(2) of schedule 2) should prevail over what is prima facie the commonsense conclusion that if there was a subsisting contract of employment on 18 November 1993 then what was said by Mr Powell on that date amounted to a dismissal within section 55. We have in any event expressed our own understanding of paragraph 6(2) earlier in this judgment.

    We therefore conclude that the Industrial Tribunal erred in law in assuming, without addressing the question as an issue of fact or making any finding thereon, that the Appellant's contract of employment continued until 18 November 1993 and was subsisting on that date. The remaining question is whether we must remit the application for rehearing or whether we can substitute our own finding, the effect of which would, in this instance, be to uphold the result for other reasons. The test is whether the result is "plainly and unarguably right". In our view it is. The question whether the contract continued is a question of fact, but it is a fact which in the circumstances of this case is to be inferred from primary facts all of which have been found or are agreed. We are as well placed to draw that inference as the Tribunal. We have indicated our initial clear conclusion and have in the course of this judgment considered whether anything in the authorities or the arguments causes us to resile from that conclusion. We see no reason to do so. We therefore dismiss the appeal.


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URL: http://www.bailii.org/uk/cases/UKEAT/1995/947_94_0911.html