Childcare vouchers can be discontinued during maternity leave…
  • 23rd Mar 2016
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In a recent case, the Employment Appeal Tribunal (the EAT) has held that it was not discriminatory to discontinue childcare vouchers during maternity leave.

Women on maternity leave are entitled to continue to receive non-pay benefits, under the Maternity and Parental Leave regulations 1999.  However, they are not entitled to continue to receive remuneration, which is defined as sums payable by way of wages or salary. 

The question of whether childcare vouchers funded through a salary sacrifice scheme, are considered to be a non-pay benefit or part of an employee’s wages or salary has been debated by employment lawyers for some years.

The EAT has ruled that childcare vouchers represent part of salary and are not to be considered as non- pay benefits.  As such, childcare vouchers could be legitimately discontinued during maternity leave.

In its judgment, the EAT observed that it cannot have been the intention of Parliament for employers to continue providing childcare vouchers under a salary sacrifice scheme, at a time when there was no salary which could be sacrificed in respect of them (the employee in this case was only entitled to statutory maternity pay, which could not be diverted for that purpose).

Employers wishing to read the EAT’s judgment in full can use the following case reference:  

Peninsula Business Services v Donaldson UKEAT/0249/15