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Ben Jones
Ben Jones, UK Lawyer
Category: Employment Law
Satisfied Customers: 50209
Experience:  Qualified Employment Solicitor
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I went on maternity leave with my first child in August 2012.

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I went on maternity leave with my first child in August 2012. I asked my employer what pay and benefits I would receive during my maternity leave. I took 9 months off and returned in June 2013. My employer confirmed that I would receive SMP, as there is no company maternity pay, and my contractual monthly car allowance. I was told I would not receive my quarterly bonus. I am due to go on maternity leave with my second child in September 2014. I have recently had to raise a grievance against my boss due to receiving numerous sexual discriminative comments since telling him of my second pregnancy. He also told me I was making the company lose more money. After checking on-line on EHRC it now appears I should have received a quarterly bonus as it is written in my contract that I should receive a “Quarterly bonus scheme dependant on individual and companywide performance”. All employees receive a quarterly bonus regardless of performance as they receive a share of company profits. Please can you confirm if I am entitled to bonus during maternity leave and if it should be paid every quarter or only for the period worked in the quarter plus the two weeks compulsory maternity leave? Am I within my right to ask for the bonus payments I missed in 2012 also or is it too late?
On another subject, my company are part of the childcare voucher scheme. In which I have £124 deducted from my salary each month. I would like to continue collecting childcare vouchers during my next maternity leave. Will the company deduct the £124 from my SMP and car allowance or will my company have to pay them?

Ben Jones :

Hello, my name is XXXXX XXXXX it is my pleasure to assist you with your question today.

Ben Jones :

How long have you worked there for?


3 years and 2 moths

Ben Jones :

OK thank you, XXXXX XXXXX it with me. I am in a tribunal today so will prepare my advice during the day and get back to you this afternoon. There is no need to wait and you will receive an email when I have responded. Thank you

Ben Jones :

Many thanks for your patience. The issue of bonus entitlement during maternity leave is a rather complex matter, not helped by certain inconsistencies between UK and European laws.


First of all, domestic legislation state that during statutory maternity leave, all terms and conditions are preserved, including all matters connected with the contract of employment, except those related to "remuneration", defined for this purpose as sums payable "by way of wages or salary". So you must try and determine if the bonus could amount to wages or salary and if so it would be excluded from the protection you get during maternity leave. This would be the case if for example it was taxed and subject to NI contributions, perhaps if it was pensionable or paid through payroll.


Assuming that the above protection applies and the bonus is not counted as part of your wages or salary, then it is potentially possible to claim for detriment for a reason connected with pregnancy/maternity. However, there is case law that confirmed it was not a detriment to reduce an annual bonus pro rata to take account of the time spent on maternity leave (excluding two-week compulsory maternity leave).


The latest legislation on the matter, The Equality Act 2010, provides a "maternity equality clause" (section 73) which is intended to give a woman the benefit of a pro rata entitlement to a bonus that would otherwise have been denied to her during maternity leave. This equality clause modifies your contract where necessary to ensure that a bonus must be paid when it would ordinarily have been paid but for you taking statutory maternity leave, in so far as it relates to the following:

  • Time before she begins statutory maternity leave;

  • Time when she is absent on compulsory maternity leave; and

  • Time after she returns to work following statutory maternity leave.


This means that, in effect, an employer can reduce your bonus pro-rata to reflect time spent on maternity leave other than compulsory maternity leave.


A similar principle would apply in relation to the childcare vouchers. Whether these vouchers should be offered during maternity leave depends on whether they will amount to "remuneration" (which does not continue during maternity leave) or non-cash benefits (which do continue during maternity leave).


There are various bits of legislation and guidance that may be used to try and determine which definition the vouchers fall under. The Maternity and Parental Leave etc. Regulations 1999 allow employees on ML to continue enjoying their usual contractual benefits during their absence, except for remuneration. It does not state whether vouchers can be included in that though.


HMRC has some non-binding guidance that states vouchers are non-cash benefits rather than remuneration but that is not legally binding. However, they also state that if the employee is only receiving SMP then employers cannot offset any of the cost of the vouchers against it. So it is possible to stop the vouchers during ML, but not use them towards her SMP payments.


So the key is whether the vouchers amount to remuneration. If they do then it is not possible to limit access to childcare voucher schemes during ML as it would amount to sex discrimination on the grounds of maternity leave. The issue is that there is no test law on this and it is a grey area, so whilst she may certainly try to challenge this, the outcome cannot be guaranteed. At first she may raise a grievance with the employer about this, but if that is refused and they make the deductions all she can do is consider taking the matter to the tribunal and then it is really unknown what the outcome could be, because as mentioned it is not something with legal precedents.

Ben Jones :

Please let me know if this has answered your original question or if you need me to clarify anything else for you in relation to this? Thanks

Customer: My bonus is paid through payroll and is taxed. therefore assume it is related to 'renumeration'? Just to be clear on your answer regarding bonus, does this mean I can try and claim back the period pro rata up to the end of the two weeks compulsory leave only? I receive bonus in April, July, October and December. The end of my compulsory mat leave was 27th September 2012. Does this mean I can claim pro rata bonus from 01.07.12 - 27.08.12? I returned to work on 12.06.13 however was not awarded any bonus in July 2013. Should I have done? If they do not reimburse me can I take to small claims court? what would be the cost for this? My compulsory mat leave for this preganancy ends 06.10.14. therefore should I receive bonus for the period of 01.08.14 - 06.10.14 only? If they refuse it can I take it to tribunal as I will be making a complaint within the 3 months for discrimination? Does it mean that I was not entitled to bonus from 27.08.12-11.06.13? And will not be entitled to bonus from 07.10.14-21.09.15? One more thing to mention about the bonus. This quarterly bonus was stated in my offer letter and is not written in my contract. The company however would only create the contractual documentation after I accepted the position based on the employment offer letter. Does this mean that I am not entitled to anything as it is not in my contract? Or can I say the offer letter is binding agreement? Can I raise a grievance for any bonus missed on 2012 and 2013? What should be the next point if the grievance is unsuccessful? For the childcare vouchers, The voucher of £124 is deducted from my salary through payroll. I will receive SMP + monthy car allowance of £416 during my next maternity pay. The car allowance is paid through payroll, is taxed and NI deducted and appears on my payslip. Does this mean the £124 will be deducted from car allowance £416?
Ben Jones :

Yes it would amount to remuneration and as such it would not be payable during your maternity leave but you can expect to receive the pro rata payment which would have accrued whilst you were still at work and during the compulsory ML. Anything after that period would not be payable until you return to work. If they fail to pay you once challenged then you can consider the small claims court and the costs of that would depend on how much you are actually claiming. If it’s up to £5,000 then the claim fee won’t be more than £100 and there will be a smaller allocation fee of around £40 but that would be about it. Obviously the higher the claim amount is the more fees you will have to pay. If you want to claim the money for the bonus for the current ML then you may wish to consider making the claim at the same time as the old one to keep them together and reduce the fees you have to pay rather than having to pay for two separate claims I separate venues. But if you want to claim for discrimination then you will have to make the claim in the tribunal.


The offer letter can certainly be a binding agreement, together with it being a common practice so far, so it can still have contractually binding effect. You can raise a grievance at any point, if the grievance is not successful then you are really looking at the court options as next steps.


As the employer is not offsetting the vouchers against your SMP rather against your car allowance then they could consider doing that as it may be allowed but as mentioned this is not set in law specifically and it is a grey area so unless you go on to challenge it formally you may not know your true position in that respect.


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