Discontinuing Childcare Vouchers During Maternity Leave - Discriminatory?

Women on maternity leave are entitled to non-pay benefits pursuant to the Maternity and Parental Leave Regulations 1999 (‘MPL’). Following HMRC guidance that contractual non-cash benefits provided under a salary sacrifice scheme must continue to be provided during ordinary maternity leave, an employment tribunal has held, in the case of Peninsula Business Services v Donaldson, that it must be discriminatory for an employee to lose childcare vouchers during maternity leave.

Peninsula Business Services appealed to the Employment Appeal tribunal (the ‘EAT’).  The EAT allowed the appeal.  No legislative basis had been found to support the HMRC guidance.

The key question before the EAT was whether the childcare vouchers amounted to ‘remuneration’. Regulation 9 of the MPL Regulations does not require the payment of normal remuneration during maternity leave. As the childcare vouchers were paid for by sacrificing part of the employee’s salary they were deemed to be remuneration and the employee was therefore not entitled to them during maternity leave.

Posted on 03/28/2016 by Ortolan

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