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.
Facts
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.
Opinion
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.
Covid-19 has resulted, on the whole, in a marked co-operation between contracting authorities and their suppliers as everybody focuses on maintaining delivery as far as possible.
As we enter a recession, we have been here before, and a key question is what did we learn and how can we benefit from that learning?
It is anticipated that as lockdown restrictions ease, and particularly with children and young adults returning to education, cases of meningitis will start to rise.
As we continue to emerge from lockdown measures and deal with local measures and the short and long term economic impact of Covid-19, local authorities will need to re-assess how services will be delivered for years to come.
The Government first announced plans for a shared ownership right to buy in October 2019. At the time the sector raised concerns about the impact the plans would have on housing associations ability to borrow. An election and a pandemic later the Government announced, during the CIH Housing Festival last week, the return of the right to shared ownership as part of its Affordable Homes Programme (AHP).
Two final pieces of the possession jigsaw have been published on 15 September 2020. Mr Justice Knowles’ working group on possession proceedings has issued its guidance on the “overall arrangements” for possession proceedings.
One change proposed by the Building Safety Bill is the introduction of a duty holder regime, which will see statutory responsibility for the safety of higher risk buildings placed on key individuals
Throughout this pandemic, the Competition and Markets Authority (CMA) has been publishing various “Statements on Coronavirus” (Statements) which provide guidance on consumer rights during this time.
A recent increase in COVID-19 cases in the UK means new measures are being put in place in an effort to reduce the risk of a second wave. Whilst the impact of COVID-19 continues to be felt, it is important to remain focused on the sector’s road to recovery.
Sometimes half an hour at a conference gives you the reality that has been staring you in the face all along. That was my experience watching “Change is on the Horizon”
To receive invitations to our events, as well as information and articles on legal issues and sector developments that are of interest to you, please sign up to Newsroom.