Peninsula Business Services Limited -v- Donaldson
Details
The Employment Appeals Tribunal has held that childcare vouchers provided under a salary sacrifice scheme are part of an employee’s ‘remuneration’ under Regulation 9 of the Maternity and Parental Leave Regulations.
The obligation to maintain terms and conditions during maternity leave does not include remuneration. HMRC guidance dictates that childcare vouchers provided under a salary sacrifice scheme do not constitute ‘remuneration’ but are a benefit, which must continue during the period of maternity leave. The EAT’s decision in this case turns this guidance on its head. A finding that childcare vouchers constitute remuneration means that it is not unlawful detriment, nor discriminatory, for an employer to cease to provide childcare vouchers during a period of maternity leave. It is important to note that where vouchers are provided on top of salary, without a salary sacrifice, they are not part of an employer’s remuneration and must therefore be continued.
Effects of this decision
The guidance issued by HMRC is wrong, and should not be followed. However, the EAT itself acknowledged that this issue is not clear-cut, and we expect there to be further appeals around this decision.
