Discontinuing childcare vouchers during maternity leave was not discriminatory

The Employment Appeals Tribunal has overturned a decision in the Employment Tribunal that it was discriminatory for an employer to make entry into its childcare voucher scheme conditional upon the vouchers being suspended during a period of maternity leave in the case of Peninsular Business Services Ltd v Donaldson.

Peninsular Business Services operated a childcare voucher scheme, under which vouchers were provided to employees through a salary sacrifice arrangement. During maternity leave, Peninsular paid statutory maternity pay only and it was a condition of the scheme that childcare vouchers would be suspended during maternity leave. Ms Donaldson, who wished to join the scheme, refused to do so on these terms, believing they were discriminatory. She brought a claim in the Employment Tribunal, including a claim of pregnancy and maternity discrimination under s.18 of the Equality Act 2010.

The Tribunal upheld her claim, holding that women on maternity leave are entitled to non-pay benefits and that it followed that it would be discriminatory to require a woman to forego any such benefit during maternity leave. The Tribunal based its decision on guidance from HMRC which states that during any period of ordinary maternity leave, contractual non-case benefits provided under a salary sacrifice scheme “must continue to be provided”.

Peninsular Business Services appealed to the EAT, who upheld the appeal. There was no legislative basis for the assertion in the HMRC guidance, and it also held that it could not have been the intention of Parliament to require employers to continue providing vouchers at a time when there was no salary that could be sacrificed in respect of them.

This content is correct at time of publication