An act of discrimination?

4th April 2016

An interesting case has arisen relating to benefits during maternity leave.

On the face of it, if a company were to discontinue childcare vouchers during maternity leave, one would reach the conclusion that this may amount to a discriminatory act. Not so, as held by the EAT in the case of Peninsula Business Services Ltd v Donaldson.

Pursuant to the Maternity and Parental Leave Regulations 1999 (“the Regulations”), women on maternity leave are entitled to non-pay benefits. In this case, the Tribunal in the first instance held that it was discriminatory for an employee to lose childcare vouchers during maternity leave and gave weight to a guidance produced by HMRC that contractual non-cash benefits produced under salary sacrifice scheme must continue to be provided during ordinary maternity leave.

Peninsula appealed. There was no legislative basis to support the HMRC guidance. For the EAT, the key question was, did the vouchers constitute remuneration? If they did, regulation 9 of the Regulations did not require this to continue during maternity leave.

The EAT held that the vouchers did represent remuneration and did not have to continue during maternity leave. This was because the pay had been substituted with vouchers under a salary sacrifice scheme.