Childcare Vouchers and Maternity Leave

[speedbird17]

Just trying to establish what I am entitled to as there is lots of advice contrary to what my employer is saying out there!

I am entitled to SMP only, so employer has stated I will be forced to suspend my vouchers until I am earning a salary again. It was flagged up to me by an acquaintance that their employer goes by HMRC rules that if maternity pay does not cover non-cash benefits such as childcare vouchers, a car etc that the company must carry on paying the amount on your behalf.

My employer has answered my query by stating that the class the voucher as a remuneration and as such will not class it as a non-cash benefit and will force me to suspend my participation in the scheme.

Can they do this? Is the information I have read on HMRC and other childcare trust sites etc correct? I am not wanting something for nothing, but if I am entitled to the payment it would greatly help to have it IYSWIM...

Any advice and info appreciated! Thanks in advance!

My employer insinuated that if I pushed it they'd withdraw the scheme for everyone. I'm still angry years later

That's awful pink. The policy and benefits weren't set up by you, and if they'd joined the scheme then it was tough. You shouldn't have been made to feel bad or lose out because you were hoping to claim what you were entitled too.

I'm annoyed at myself for reducing the payments down when I had ds1, as didn't realise I could have full amount on top of smp/unpaid leave. The employers certainly keep very quiet don't they?!

Pink that is awful, sorry your employer made you feel this way!

Slinky ever so quiet, and they expect employees to accept everything they say and just shut up, because nobody wants to be 'that person' who calls them out on it.

I'll keep this thread updated with any progress, but my union have already immersed themselves in research and arranged meetings with the right people to find out where my company stand and where I stand in raising a grievance.

You all have been a tremendous support and talking through with DH I am going to raise a grievance and fight for my maternity rights.

That's great speedbird, and your union sound supportive as well. They presumably represent lots of other people similar to you at your organisation so may even want to look at a collective grievance.

Best of luck

Yes they do represent a large chunk of employees (company is renowned for union work/strikes etc) will mention to them about a collective grievance if they have had any other complaints of similar issues.

Speedbird when you first git the vouchers did you sign an amended contract stating that your remuneration was subject to a salary sacrifice scheme? I did and this specified it was a benefit of employment so when I went on mat leave they couldn't argue it.

I didn't sign another contract, I just applied through my company's online services and got signed up to a voucher company...

If I didn't sign an amended contract would that still be a possibility?

You don't need a new contract specifying that the vouchers are a contractual benefit, no.

Another thing you want to bring to their attention is regarding the introduction of the new government scheme in august. If you are not in the childcare voucher scheme at this time you will not be able to rejoin even though you would/could be financially better off in that scheme - once your out, that's it.

I would suggest that when their legal department decided to classify childcare vouchers obtained by way of a contractual salary sacrifice as remuneration rather than as a non-cash benefit; they somehow failed to check the relevant statutes.

The Employment Rights Act 1996 states that a woman on maternity leave is entitled to all the benefits of her contract except for remuneration.
See s.71(4)(a) & 5(b) below:

www.legislation.gov.uk/ukpga/1996/18/part/VIII/chapter/I

However, they seem to have overlooked s.9 of the Maternity and Parental Leave etc. Regulations 1999; that state that remuneration is only the sums payable by wages or salary.

www.legislation.gov.uk/uksi/1999/3312/regulation/9/made

The main point of your salary sacrifice arrangement is that, in return for the childcare vouchers, the sum that you sacrificed is no longer payable.

While you remain/ed at work they deducted (by whatever method) £55 a week from your wages.
I'm sure that they wouldn't claim that this was an unlawful unauthorised deduction, if challenged.
On the contrary, they would state that it was a properly authorised and executed contractual change/agreement.
So, the £55 became no longer payable to you and therefore not remuneration.

Not sure who posted about the calculating of OMP. But what you need to do is suspend the vouchers between weeks 17-25 of your pregnancy, to maximise your salary and this your OMP. (Plus do overtime in this period if you can) then reinstate them afterwards.

It was me and it's too late now, but thank you.
Just got to work out benefit of reducing versus need for voucher. We should be better off under new scheme but no one has published exactly how it will work yet. I suspect up to £500 will be paid quarterly in arrears so want to make sure we have sufficient vouchers to cover first 3 months of my return to work.

It's a mine field, isn't it?

marie I don't think they overlooked anything personally, I think they are probably well aware and have decided to ignore it to save thousands of pounds in the hope that staff either don't know or won't challenge.

flowery I agree, but I think you are generous to say probably.
(I just wanted to highlight the relevant sections of the statutes governing the issue.)

It's inconceivable that such a large employer wouldn't have a single person in their legal department with a knowledge of employment law (or the ability to use google).
After all the ERA and MAPLE aren't exactly obscure statutes.

As for their purported belief that their 'company policy' can override laws enacted by Parliament....words fail me.

This can only be a deliberate, cynical ploy to diddle their employees. £2500ish for each period of maternity leave - nearly 60,000 employees; quite a tidy sum indeed.

I also think that when confronted with a formal grievance from the OP or her union they would be likely to hand over the vouchers and hope that she keeps her mouth shut so that they can continue this unlawful practice.

So this would mean that the company is having to pay your personal child care while you are on maternity leave?

I would have thought the Head of Payroll is correct. Childcare voucher schemes are salary sacrifice schemes. when you go on maternity leave, your salary is replaced with SMP/company maternity pay, so there is no salary there to be sacrificed for child care vouchers. therefore they would have to suspend your inclusion in the scheme during this period.

Thats what I think but could be wrong!

The following site says the following:-

vouchers.employersforchildcare.org/media/Childcare%20vouchers%20during%20maternity%20leave%20%28employers%29-1.pdf

Information for Employers
This factsheet contains information for employers regarding the provision of Childcare
Vouchers during maternity leave.
Legislation
The following legislation, which came into effect in October 2008, requires employers to
provide Childcare Vouchers throughout both ordinary and additional maternity leave for all
employees who were in receipt of the benefit before their maternity leave commenced:
• Northern Ireland employers:
October 2008 amendments to the Sex Discrimination (NI) order 1976 and Maternity
and Parental Leave Regulations (NI) 1999
• Employers in the rest of the UK:
Sex Discrimination Act 1975 (Amendment) Regulations 2008
Maternity and Parental Leave etc. and the Paternity and Adoption Leave
(Amendment) Regulations 2008
This factsheet specifically relates to Childcare Vouchers. However the same entitlements
also apply to other forms of employer-supported childcare such as workplace nurseries
and directly-contracted childcare.
Although this factsheet refers to maternity leave throughout, the impact of the legislation
also extends to parents taking Additional Adoption Leave.
In this factsheet you will find a list of questions and answers which will help you determine
the impact of this legislation on you and your staff if you offer, or are considering offering,
a Childcare Voucher scheme.

The following link says the following so sounds like Flowery is correct:-

www.cipd.co.uk/pm/peoplemanagement/b/weblog/archive/2013/01/29/hidden-cost-of-childcare-vouchers-could-hit-employers-hard-2008-06.aspx

Flowery is always correct in these matters, but very helpful for the op to have additional legislation.

Just a quick update, going through union but I have a hell of a lot of support behind me and we're going for it! All evidence backs up what I have up say!

Good luck! And keep us posted

Good luck speedy. I'm currently on maternity leave and continuing to receive the full £243 in vouchers from my employer on top of SMP. I work for a law firm and this matter was reviewed by the employment law team who instructed HR to continue to pay the vouchers for anyone who was already a member of the scheme before maternity leave kicked in.

Good luck speedy

I have come across companies paying the difference of money that they would have saved (NI/tax on £243) rather than the full £243. I've read it somewhere too but a year or so ago. In theory, the employee isn't disadvantaged (still recieving the 'saving') but the Company isn't paying out full amount. It's an interesting bit of employment law.

Hi speedbird and all - I am in a similar situation and my employer sent me this link: www.kiddivouchers.com/pdfs/Childcare%20vouchers%20during%20maternity%20leave.pdf - which talks about an 'override' system which makes childcare vouchers a 'conditional' benefit, rather than 'unconditional' - therefore getting round the law/HMRC guidance (which states it must be an unconditional benefit).

The PDF goes on to say it recommends that employers continue to pay the full childcare voucher cost when a woman is on maternity leave, to cover themselves properly - but also that it will 'stand by' clients who choose to not pay the full amount. So seems like they've found a loophole in the law but not a watertight one. Any advice/thoughts v much appreciated!

No they haven't found a loophole in the law. They were suggesting that HMRC guidance is not binding and that it may be possible to defend a case in tribunal if vouchers were withdrawn during maternity leave while the mother did not have enough salary to sacrifice. Fortunately we know how well the arguments suggested in this leaflet work.

You should point your employer towards the recent judgement in Donaldson v Peninsula Business Services - details here. You will note that the arguments advanced by Peninsula are essentially the same as those suggested in the leaflet. Peninsula lost, were found to have committed pregnancy and maternity discrimination and now have to pay Mrs Donaldson £5,361 to cover her loss and injury to her feelings.

Thanks prh47bridge, that's very helpful. I've just had a long conversation with my line manager and he's said in no unclear terms that they don't agree with the HMRC interpretation. Also said the test case is not an appeal so it doesn't set a precedent. It's a small company which doesn't make much money, and I really need to not be stressed about this (have had previous pregnancy issues) so I've just sent them an email saying I will not pursue this. I realise this is a massive cop out but am going for the path of least resistance. I tried (in a small way) at least. Thanks for the guidance. If it was a bigger company and if I wasn't worried about the stress it would entail I would have definitely pursued this.