Veitch Penny LLP - Exeter | Crediton, Devon

Case

Hoyland v Asda Stores Limited
Employment Appeal Tribunal (22nd February 2005)

Issues

(1)Contract of Employment
(2)Sex Discrimination
(3)Maternity Leave

Facts

Ms Hoyland was employed by Asda in September 1998. She went on maternity leave from her employment in 2002 and as a consequence did not return for 183 days in that calendar year.

During that year, Asda operated a bonus scheme to award employees for their work. The bonus payable was pro-rated to reflect part-time employment and absences of 8 consecutive weeks or more during the year. Maternity leave was treated as an absence for the purposes of calculating bonus payments. In Ms Hoyland’s case her bonus payment was reduced to reflect her 183 days of absence.

Ms Hoyland made a complaint to the Employment Tribunal submitting that the pro-rata reduction in her bonus constituted sex discrimination and that it was pregnancy related detriment within the meaning of Section 47 C of the Employment Rights Act 1996.

At first instance, the Tribunal found that the bonus did constitute part of Ms Hoyland’s wages or salary within the meaning of the Maternity and Parental Leave Regulations 1999. This meant that it was a payment regulated by contract and excluded the application of the Sex Discrimination Act 1975. However, the Tribunal went on to find that Ms Hoyland had suffered a detriment in respect of Asda’s failure to pay her bonus in respect of the two week period of her compulsory maternity leave.

Ms Hoyland appealed the decision. The Employment Appeal Tribunal (EAT) had to consider whether it was lawful to make a pro rata reduction in respect of absence of ordinary maternity leave.

Decision

The Appeal was dismissed. The EAT confirmed that the bonus had to be paid in respect of periods when the employee was at work and in the fortnight of compulsory maternity leave but went on to state that a proportionate reduction to reflect the employee’s absence on ordinary maternity leave was permissible.

Comments

Permission to appeal has been given to the Court of Session.

It should be noted that the position may well be different if the bonus is based on individual performance of targets. The reduction in this case was permissible because the bonus is based on the employee’s attendance rather than actual achievement of targets.

Rachel Bickle – Associate Solicitor, Commercial Department at Veitch Penny.
Tel: 01392 278381, Fax: 01392 410247,Email: This e-mail address is being protected from spambots. You need JavaScript enabled to view it