Any employment law / HR experts about? Need some advice please.

[Jojay]

I'm manager for a department store chain and a member of staff has just left on maternity leave to have her second baby.

Before finishing work she sent her first child to nursery 2 days per week and had around £250 per month deducted from her gross salary to pay into her Care 4 account, which paid the nursery direct.

I've received an email from HR to say that she hasn't altered her salary deduction since she finished work, and that they are unable to take this money from her statutory maternity pay. They say that is it classed as a cash benefit, and it would be discriminatory of us to stop paying the money, so as a company we are picking up the tab for this £250 a month, even though she is on maternity leave and therefore doesn't need childcare.

I have several issues with this.

1. Surely the cash benefit part of using childcare vouchers is that you don't pay tax on your childcare, and I think basic rate tax payers end up about £80 a month better off by using the vouchers. I don't see why we have to pay the full childcare cost, why not just the £80 that was the benefit of being in the scheme.

1. What irks me even more is that I too have 2 kids and have taken 2 mat leaves. When I finished work to have DC2 I cancelled my Care 4 deductions as I wasn't using childcare. Had I known that my company would have carried on paying them regardless then I certainly wouldn't have cancelled them and would have been £2.5k better off! If they set a precedent by paying out for her, would I have any basis to claim back the money that I wasn't paid???

If you've made it to the end of this, I thank you Hopefully it makes some sense

I'm not an HR expert but the advice you have been given is correct. Childcare vouchers can continue during MATL and cannot be deducted from SMP so in effect the employer picks up the tab. (As an aside, you don't know that she won't need childcare, I am currently on MATL and keeping ds1 in nursery two days a week.)

I know she is keeping her DC1 in nursery 1 day a week, which is obviously a nice thing to do but not an absolute necessity, IYSWIM.

I'm not moaning about the other mum BTW. idon't think she realised that she'd get this money either, but it does seem rather bonkers to me.

Any views as to whether I'd have the grounds to make a claim for the money I didn't get?

No, it's not an absolute necessity but I don't see how that is relevant? She is entitled to the vouchers and has decided to use them.

I doubt you would be able to claim retrospectively; you cancelled your vouchers before you went on mat leave so will be deemed to have opted out. If you hadn't cancelled but just hadn't received them, I suspect it might be a different story.

But that's just my guess. Others may have a different view.

My vouchers continued during mat leave. And quite right too. Imagine the disruption to the elder child (already coping with a new baby) when you pull them out of their nursery.

I agree with others here that the advice given by your HR dept is correct. It also applies in the case of pension contribs - if you have a scheme which involves the employer making contributions if the employee makes a certain minimum contrib, the employer must carry on making their employers contrib even when employee is not making their contrib because it cannot be deducted from maternity pay.

Unfortunately you did not get good advice during your maternity leaves. Did you cancel the vouchers on advice from HR that they would not meet the cost, or did you just assume they would not? I would have a word with HR as, whichever it was, you have lost out and would be justified in being compensated for this. It is, after all, an employment benefit which you are ebtitled to.

Yes it's correct. It's two different laws really, there is a law saying deductions can't be made from statutory payments like maternity pay, and sex discrimination legislation says that non cash benefits must continue. The vouchers themselves are the benefit, not the tax relief, so the vouchers must be provided as normal.

Whether you could complain about your own maternity leave would depend whether you cancelled your vouchers on advice from HR that they wouldn't continue. If that's what they told you, then that was wrong so you should complain.

If you decided to do so yourself, that's unfortunately your own mistake and not a lot you can do about it.

wow I never knew this - would employers normally try to claim this back when you return to work for example?

No they can't claim it back, no. Some employers have stopped offering them altogether, or have implemented admin charges to cover the additional cost of staff on maternity leave, but they can't claim it back as such, no.

thanks Flowery

(sorry to gatecrash OP!)

but I'm so surprised this is the case. I am about to start maternity leave end of July. I am not claiming vouchers at the moment (I did for about a year previously) having stopped them during the eight week period they use to calculate AWE.

Now this period is over and I've read this thread I'm thinking heck I should start them up again....

Is there any reason why I shouldn't (apart from feeling REALLY cheeky)

Don't worry about gatecrashing JSW - I'm gobsmacked too. I feel like getting pregnant again just to make the buggers pay!

I too stopped them when AWE were calculated and never restarted them. At no point was I told that it was a benefit that would continue through mat leave.

I'm now itching to go back to work and read up on the mat leave procedures to make sure I didn't miss everything but I'm hopping mad that I may have missed out on this money

Definitely restart it JSW - this is definitely a benefit that needs more publicity!

As long as your scheme rules allow you to stop and start quickly JSW then yes you could start again.

By Jojay Sat 22-May-10 13:13:44

"At no point was I told that it was a benefit that would continue through mat leave."

But the trouble is you weren't receiving them as a benefit at that time. And although it would be nice in an ideal world if HR were in a position to notice that you've stopped the vouchers, remember that you are pregnant, work out that perhaps you think they wouldn't continue during mat leave anyway, then ring you to say 'are you sure you want to stop these, you realise you receive benefits during maternity leave which would include vouchers?', the bottom line is that's unlikely to be at all realistic in most companies. As long as your maternity policy isn't misleading in any way, ie doesn't indicate that some benefits stop during maternity leave, and as long as you weren't given duff advice, then the rest is up to you unfortunately.

It is counter-intuitive I agree, so it's a pain if you didn't realise.

Thanks for your advice Flowery - I'm so gutted I did myself out of that money, but good luck to my colleague as it seems she's entitled to every penny

Thank you everyone.

Bloody hell! I wish I had known about this too!

When I had DS3, I cut down DS2's days and transferred paying for them to DH's account.

blimey still in shock about this!

thanks for your advice flowery and thanks for letting me gatecrash jojay!

my HR dept are not really up to much so I can imagine they will let me start them up again v quickly (without realising the possible implications) and then when payroll tell them the vouchers cannot be deducted from statutory pay they will say sorry will you have to stop them.

what would be my position then? could I be forced to stop them?

goodness you're right jojay we really should ensure people know about this - and pension contributions too

I am going to start a thread about a thread

The terms and conditions of the scheme in operation will tell you how and when you can stop and start vouchers JSW. It won't be up to HR whether to let you or not, and in any case, if they tried to stop you because of your maternity leave that would be discrimination. So as long as the rules of the scheme itself allow it, you're fine.

blimey!
thanks flowery

Hello all. Well I went into work and had a look at our maternity policies, and this is what I found:

'Treatment of maternity benefits.'

'Childcare payment scheme:'

'Under (company's name) rules of the scheme you can choose to leave the scheme when going on maternity leave but this is not compulsory. SMP calculations are based on your full salary after sacrifice, and therefore your SMP will be reduced if you continue to participate. If you do not want it to be reduced you should consider leaving the scheme 23 wks before your EWC.'

All correct, but nothing at all to highlight the benefit of staying in the scheme.

So how was I supposed to find out about this benefit?

Are the company in the wrong for not making this info available?

Flowery - can you help at all?

By Jojay Mon 24-May-10 20:38:28

"So how was I supposed to find out about this benefit?"

Unfortunately finding out about your rights remains your own responsibility. There are lots of ins and outs with maternity rights, and your employer isn't expected to specifically notify you about every one of them, neither are they expected to take responsibility for how much you know about your rights.

The policy is correct, it gives you the option to stay in or leave, but doesn't specifically highlight the HMRC rule that deductions can't be made from SMP. Morally yes they probably should have said what would happen in terms of payments if you stayed in the scheme, but as it's an HMRC rule about the deductions, not employment law, it's entirely likely the person drafting the policy had no idea - that would be a payroll thing really. Employment law says that if you are in the scheme, you must continue to receive the vouchers, and they don't say anything different.

You could certainly go back to them and argue that as the policy doesn't say that deductions won't be made if you stay in the scheme, you didn't realise the benefit of staying in the scheme and would have otherwise done so, however you may not get anywhere as ultimately making yourself aware of your rights is your own responsibility.

Sorry for appearing so stipid but is this the same as salary sacrifice scheme?

...really am stupid!!! previous post should say STUPID, not stipid!!!!

Yes, this is the slaary sacrifice scheme.

Thanks Flowery. I'll call them and argue my case, it's worth a shot

Definitely worth a go. Entirely likely it was not deliberately missed out, because this is such a weird anomaly that it wouldn't occur to your average person was even possible. So although you are ultimately responsible for informing yourself, you certainly haven't failed in that by normal standards - most people wouldn't have a clue, as they don't as a rule go around reading HMRC guidance on statutory payments...

well I went into work and queried this and read all the guidelines etc and basically they are well aware of the implications of what could happen if I rejoined the scheme!

Having said that HR are happy for me to rejoin the scheme and are going to organise this - no idea how they are going to get around me 'sacrificing' my mat pay and not making any decuctions!

She said there is a sticking point with regard to rejoining the scheme but couldn't remember what it is (oh yeah!) so is going to look into it and get back to me... may need some more advice soon flowery!

I wonder if I am able to rejoin the scheme,claim the vouchers and remain eligible for no reduction in my mat pay - with them not being able to do anything about it???

Wow, I am really shocked by this!

Can other deductions be made from SMP, for example union membership fees?