The Employment Appeal Tribunal (EAT) heard an appeal recently in the case of Peninsula Business Services v Donaldson which is expected to provide some clarity on the legal status of childcare vouchers. Unfortunately, a decision in the case has been reserved so employers will have to wait a bit longer before they have any definitive answers.

HMRC states that childcare vouchers should be classed as non-cash benefits and continued throughout the whole of maternity leave, leaving the employer to pick up the tab when a woman is in a period of unpaid leave. While this has generally become the accepted legal position, official guidance, even from HMRC, is just that: it does not have the force of law and the courts are not required to follow it.

When the case was heard by an employment tribunal, it found that employers making withdrawal from a childcare voucher scheme during maternity leave a condition for joining it amounted to direct maternity discrimination and indirect sex discrimination. Such terms are not uncommon.

Employers need to review their childcare voucher schemes to see if they have one and should prepare to amend them where they can identify terms that are potentially discriminatory.

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