Q&As

Do payments that an employee receives during maternity leave under a discretionary enhanced maternity pay policy or a discretionary bonus scheme need to be adjusted in accordance with Equality Act 2010, s 74 to take account of any increase in the employee’s pay (or in the amount she would have been paid had she not been on maternity leave)?

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Published on LexisPSL on 14/01/2020

The following Employment Q&A provides comprehensive and up to date legal information covering:

  • Do payments that an employee receives during maternity leave under a discretionary enhanced maternity pay policy or a discretionary bonus scheme need to be adjusted in accordance with Equality Act 2010, s 74 to take account of any increase in the employee’s pay (or in the amount she would have been paid had she not been on maternity leave)?
  • Maternity equality clauses
  • Calculation of contractual maternity-related pay
  • Bonus payments during maternity leave
  • Pay increases following maternity leave
  • ‘Discretionary’ maternity pay arrangements
  • Payments under discretionary bonus schemes

Do payments that an employee receives during maternity leave under a discretionary enhanced maternity pay policy or a discretionary bonus scheme need to be adjusted in accordance with Equality Act 2010, s 74 to take account of any increase in the employee’s pay (or in the amount she would have been paid had she not been on maternity leave)?

Employers may agree contractual terms that are more generous than the statutory entitlement for maternity pay.

See, for example, Precedent: Policy—maternity leave (paragraphs 7.4–7.6 and 7.8) and the related drafting notes.

An employer considering the introduction of a ‘discretionary’, rather than contractual, maternity pay scheme will need to consider on what basis the ‘discretion’ will be exercised. The employer may wish to consider the risk of discrimination claims, eg if the discretion is exercised on the basis of seniority or length of service (potential age discrimination), or on the basis that the employee works full-time (potential sex discrimination).

Maternity equality clauses

Under section 74 of the Equality Act 2010 (EqA 2010) there is a special version of the sex equality clause applicable to a woman who is absent from work on maternity leave (whether this is compulsory, ordinary or additional). This is known as the 'maternity equality clause' and it applies in respect of:

  1. the calculation of contractual maternity-related pay

  2. bonus payments during maternity leave, and

  3. pay increases following maternity

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