The case has attracted publicity over the past four years because of its classically sensational aspects - sex, priests, illegitimate pregnancy and the alleged hypocrisy of the Catholic establishment - but this new judgment is also likely to make all Catholic schools more careful about who they employ, and more inclined to impose the controversial Catholic contract on new employees - a contract that has come under fire from the teaching unions.
The judgment by Mr Justice Mummery last Friday overturns the conclusion of an industrial tribunal which had found against Mrs O'Neill. The tribunal's judgment, in October 1994, asserted that there is a difference between sacking a woman because she is pregnant, which constitutes sex discrimination under the 1975 Act, and sacking an RE teacher in a Catholic school when she is pregnant by a priest and the relationship has become public knowledge.
The appeal court decided that this distinction is not tenable under the law. In Mrs O'Neill's case, according to the new judgment, the motives of her employers, the governors at St Thomas More School and Bedford County Council, were irrelevant, as was the Catholic ethos of the school: "Dismissal for pregnancy is on a ground of sex ... pregnancy always has surrounding circumstances, some accompanying it, some consequential on it. The critical question is whether the dismissal or other treatment complained of by the applicant is on the ground of pregnancy."
Whether or not pregnancy was the sole ground for dismissal is also irrelevant, the judge ruled, and in Mrs O'Neill's case, "her pregnancy precipitated and permeated the decision to dismiss her".
During the hearing, Mrs O'Neill's barrister, Jeremy McMullen QC, drew attention to the fact that the law has changed since the 1994 tribunal. The European court of Justice has ruled that you cannot compare dismissal of a pregnant woman with the treatment of a hypothetical man (the governors of St Thomas More had argued that they would also have sacked a male teacher if he had got a nun pregnant). "Pregnant women in employment occupy a special position which attracts special protection . . . pregnancy is unique to the female sex."
Monika O'Neill, formerly Monika Kocanek, was employed as a probationary teacher of religious education and personal relationships at St Thomas More RC Upper School in 1990. She became pregnant by Chris O'Neill, a local priest who was a frequent visitor to the school, in 1991 and was constructively dismissed when the school stopped paying her salary in August 1992.
Mrs O'Neill, who sees the case as a moral crusade against hypocrisy and lack of charity in the Catholic Establishment, says she always had an unwavering conviction of her own moral and legal rectitude. At the time of her sacking, the priest who made her pregnant was treated with more leniency - he was sent on retreat for therapy. She said this week that she was surprised that she had won at this stage - "I was prepared to go to the House of Lords". Compensation, still to be decided, was never the issue: "I just wanted justice and my day in court".
She also thought that her victory would make Catholic schools more likely to put pressure on new employees to sign the "Catholic contract".
St Thomas More School refused to comment on the ruling, though a spokesman for Bedfordshire county council, which jointly employed Mrs O'Neill, said that the council was considering an appeal. The implications of the decision for other church schools emphasising the religious ethos of the school in dismissal proceedings was a matter for individual governing bodies to decide, he said, "but they should look very carefully at this judgment."
Margaret Smart, director of the Catholic Education Service which advises Catholic schools, said she thought it was likely that Catholic schools would now be urging all new employees to sign the Catholic contract. The contract contains a clause committing the new teacher to "have regard to the Roman Catholic character of the school and not to do anything in any way detrimental or prejudicial to the interest of the same".
Monika O'Neill was not asked to sign such a contract (though she alleges that the school later tried to say that she had); Margaret Smart believes that if she had signed she would not have had a case.
But Tess Gill, a barrister who specialises in employment law and discrimination law, denied this. The Sex Discrimination Act, or any other Act guarding employees' rights, she said, would always take precedence over contracts."If you have signed a contract implying that the employer will sack you if you get pregnant, that is still unlawful under the Act. Contracts are subject to statute."