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MILS HR UpdateBack

MILSLogo2Bonus during Maternity Leave

“Do we have to pay bonus to an employee who is on maternity leave?”

If the bonus payment represents retroactive payments for work already done then yes it would need to be paid to an employee on maternity leave.  To withhold it could lead to arguments of discrimination.

Where the bonus represents payment relating to work which an employee needs to be at work at for it to continue, then there is a better argument in law that it can be paid on a pro-rata basis and therefore the period of time on maternity leave can be excluded.  This however excludes the two week compulsory maternity leave period therefore bonus for that two week period would still need to be paid.

This decision stems from case law because there is conflict between the position under the Equality Act and the position under the Maternity and Parental Leave etc Regulations, where on one hand it would not be discriminatory because the payment would be linked to remuneration which does not continue during maternity leave, to the other hand where payment not made due to an employee being on maternity leave could represent less favourable treatment.  To prevent any doubt therefore it is worthwhile employers specifying where pro rata payments are made for bonus schemes.

Another point to note is whether there is any contractual right to the payment whereby the terms of the bonus scheme itself expressly states that payment will continue during maternity leave.  If there is such wording there would be a legal entitlement to pay it to avoid being in breach of contract.

It may also depend upon the circumstances of the case and therefore it is recommended you contact our legal telephone helpline should the situation arise.

Andrew Macmillan,

Solicitor

Motor Industry Legal Services

Posted by Sue Robinson on 22/01/2016