In the recent case of Peninsula Business Services v Donaldson [2015], the EAT held that it is not discriminatory to discontinue childcare vouchers under a salary sacrifice scheme during maternity leave.

Under the Maternity and Parental Leave Regulations 1999, women on maternity leave are entitled to receive non-pay benefits. Furthermore, HMRC guidance states that employees must continue to receive non-cash benefits provided under their salary sacrifice scheme whilst on maternity leave.

In this case, Peninsula’s childcare voucher scheme required employees to suspend their membership during maternity leave. An employment tribunal found that it was discriminatory to have a condition of entry to the scheme that employees have to withdraw from the scheme while on maternity leave.

This decision was appealed. The EAT allowed the appeal. It noted that there was no legislative basis to support the current HMRC guidance. The EAT considered whether the vouchers constituted remuneration or whether they were in fact a benefit that had to be continued during maternity leave.

It was held that the vouchers amounted to remuneration. The vouchers represent part of the employees’ salary by virtue of the fact that the vouchers are a substitution for pay under a salary sacrifice scheme. On this basis, Regulation 9 of the Maternity and Parental Leave Regulations 1999 applies and the vouchers can be regarded as remuneration. Therefore, Peninsula was within its rights to discontinue the vouchers during periods of maternity leave.