Childcare vouchers do not need to be provided whilst employee on maternity leave

legal_updates

Generally speaking all employees on maternity leave are entitled to retain their usual contract of employment terms.

Author: Jason Williams
Published:
Reading time: 2 minutes

This article is 6 years old.

Read our disclaimer keyboard_arrow_down

This website content is intended as a general guide to law as it applies to the motor trade. Lawgistics has taken every effort to ensure that the contents are as accurate and up to date as at the date of first publication.

The laws and opinions expressed within this website may be varied as the law develops. As such we cannot accept liability for or the consequence of, any change of law, or official guidelines since publication or any misuse of the information provided.

The opinions in this website are based upon the experience of the authors and it must be recognised that only the courts and recognised tribunals can interpret the law with authority.

Examples given within the website are based on the experience of the authors and centre upon issues that commonly give rise to disputes. Each situation in practice will be different and may comprise several points commented upon.

If you have any doubt about the correct legal position you should seek further legal advice from Lawgistics or a suitably qualified solicitor. We cannot accept liability for your failure to take professional advice where it should reasonably be sought by a prudent person.

All characters are fictitious and should not be taken as referring to any person living or dead.

Use of this website shall be considered acceptance of the terms of the disclaimer presented above.

This was a controversial decision by the Employment Appeal Tribunal and is possibly ripe for further challenge in the not too distant future.

Generally speaking all employees on maternity leave are entitled to retain their usual contract of employment terms. The one exception is “remuneration”, which is essentially an employees’ wages or salary, as this is replaced by Statutory Maternity Pay or the employers’ own maternity pay scheme.

Childcare vouchers allow the children of employees to be looked after by, say, a childminder and for tax purposes are seen as benefits to employees rather than earnings.

In that were treated as a benefit, they remained in place during the employees’ period of maternity leave.

However, the new ruling stated that such a salary sacrifice arrangement was a diversion of an employee’s salary to purchase childcare vouchers and that the voucher is remuneration to be converted into vouchers in a tax efficient way. 

Whilst it is not the intention to go into great detail here, there are a number of reasons* why this ruling ought to be treated with caution by employers and certainly by those who have employees already on maternity leave and who have an expectation that it continue. 

 *This summary is taken from a far bigger article on the website of the Law Society Gazette in May 2016 – it can be found here and explains their author’s concerns over the ruling – childcare and maternity

Jason Williams

Legal Advisor

Read more by this author

Getting in touch

You can contact us via the form or you can call us on 01480 455500.