Next in our series of ebriefings on the Government’s Green Paper: Transforming public procurement; looking at the Chapter 4 proposal to change the basis of contract awards.
This ruling, in the case of Peninsula Business Services Ltd v Donaldson, may also have implications in relation to pension contributions made via salary sacrifice during maternity leave, but the position is not clear.
Peninsula Business Services Ltd (Peninsula) offered its employees a scheme providing childcare vouchers through salary sacrifice. It was a condition of entry of the scheme that employees agreed that vouchers would be suspended during maternity leave (during which Peninsula paid statutory maternity pay only). Ms Donaldson, an employee of Peninsula, wished to join the scheme but refused to do so on the grounds that she believed this condition of entry was discriminatory.
Ms Donaldson brought a discrimination claim which was upheld in the Employment Tribunal’s original decision. The Tribunal noted that women on maternity leave are entitled to continue to receive their normal non-cash benefits during maternity leave, and it considered that the childcare vouchers were such a non-cash benefit. The Tribunal had referred to HMRC guidance stating that during any period of ordinary maternity leave, contractual non-cash benefits provided under a salary sacrifice scheme must continue to be provided.
EAT, however, could not find any statutory basis for the HMRC guidance and considered that it was incorrect. Allowing Peninsula’s appeal, it held that salary sacrifice childcare vouchers represented part of the employee’s salary, albeit that this was diverted before reaching the employee’s pay packet. The vouchers were therefore to be properly regarded as part of the employee’s remuneration, rather than a non-cash benefit, which can be discontinued during maternity leave. The position would be different if the vouchers were provided as a benefit in addition to salary.
Employers may seek to review their practices in light of this decision if they currently offer salary sacrifice childcare vouchers throughout maternity leave. However, EAT did express its conclusions in the case “somewhat tentatively” and it is not yet clear whether the case will be appealed to the Court of Appeal. Employers may, therefore, wish to allow the dust to settle on this decision before taking any action.
The Chancellor has also now announced that childcare voucher schemes will be closed to new entrants from April 2018, meaning that this question could eventually become academic (although existing members as at April 2018 will still be able to continue in their scheme for so long as the employer chooses to continue operating it).
It is not clear whether this case will impact on pensions contributions made via salary sacrifice because an employee’s pension rights during maternity leave are protected by different legislation. Employers should therefore proceed with caution if reviewing their practices in this area and should seek advice before taking any action.
If you would like more detailed advice in relation to this case, benefits during maternity leave more generally or require pensions support, please contact Doug Mullen.
The Academies Financial Handbook is updated annually by the Department for Education and the Education and Skills Funding Agency; it contains a number of governance requirements for academy trusts.
Supreme Court publishes key decision for those working in the UK’s gig economy.
The 'Chocolate Snowman Appeal' is an amazing initiative that Anthony Collins Solicitors' (ACS) employees take part in every year.
The Building Safety Bill (the Bill) is said to be the most significant and wide-ranging change to the regulatory environment for higher risk building (HRBs) for over 45 years.
On 4 November 2020, the Restriction of Public Exit Payments Regulations 2020 (the Regulations) came into force; exit payments for the public sector were capped at £95,000.
The case was brought by the Official Receiver who sought disqualification orders under section 6 of the Company Directors Disqualification Act 1986 (CDDA 1986) against the seven trustees of Kids Company and its CEO. It illustrates well the tension between the role of a fulltime paid CEO of a large charity and the role of its board as voluntary trustees/directors.
At the end of 2020, The Charity Governance Code was updated or 'refreshed' as it is termed on its website.
Anthony Collins Solicitors is today (Thursday 11 February) revealing the scale of its social impact during 2020.
In their first podcast of this series, current and future trainees will discuss their journey and route to securing a training contract at Anthony Collins Solicitors.
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