The law says that during paid maternity leave, a woman is entitled to all the same terms and conditions had she not been away from work, with the exception of pay (defined as "wages or salary").
But do bonuses fall under this heading? The employment appeal tribunal (EAT) has just said - in the case of Hoyland v Asda Stores - that they do. As a result, employers are entitled to reduce them during the period that the woman is on paid leave.
What were the facts of the case?
Mrs Hoyland returned to work as an events co-ordinator for Asda at the beginning of December 2002, after a period of ordinary and additional maternity leave.
During 2002, Asda had operated a bonus scheme to reward staff for their contribution to the financial performance of the business during the year. The rules said that the payment would be prorated to reflect part-time employment and absences of eight consecutive weeks or more during the year, including maternity leave.
Mrs Hoyland did not know this and was surprised when she received her bonus in February 2003 to find that it had been reduced from £189.47p to £94.48 because of her absence on maternity leave.
What did the tribunal decide?
Relying on the lead case of Gillespie v Northern Health and Social Services Board (1996, ICR 498), the tribunal said that the bonus was part of her "wages or salary" and was therefore a contractual payment. They said it was designed to reward attendance at work, and was paid in recognition of work undertaken by employees as a whole.
However, it said that the employer could not deduct the bonus for her two-week period of compulsory leave (as required by the Pregnant Workers Directive) and awarded her the additional princely sum of £5.20.
What did the EAT decide?
The EAT agreed with the tribunal. It came to the following conclusions:
Sex discrimination: This argument hinged on whether the bonus payment was discretionary (and therefore sex discrimination), or contractual (governed by the Equal Pay Act). Although the bonus was described as discretionary in the scheme, it had never actually been withheld from anyone.
The EAT said it was therefore due under her contract. The decisive period for eligibility was the period when it accrued - in this case during the period of maternity leave - not the date when it was paid.
Although on her return from leave, the legislation says she was entitled to be treated as though she had never been away, the court said that is not "the same as saying that she must be paid for the period of the maternity leave as if she had never been on leave."
Mrs Hoyland was therefore only entitled to be paid a prorated amount of the bonus for the time she was at work in 2002 (plus the fortnight of compulsory maternity leave).
Pregnancy Related Detriment: Employees also have the right not to suffer any disadvantage (or detriment) by their employer to do with being pregnant or taking maternity leave. The EAT said, however, that the reduction of the bonus did not constitute a "detriment" under the Employment Rights Act 1996 because the Act explicitly excluded "terms and conditions about remuneration".
Article 141: Finally Mrs Hoyland argued that she was entitled to be credited for a proportion of the bonus for the whole 18 weeks of ordinary maternity leave (or else the 14- week period stipulated by European law). The EAT dismissed this argument saying that Asda was not "an emanation of the State" and was therefore not directly affected by the treaty. It also said it flew in the face of all the case law.