In Hoyland v Asda Stores Ltd the Employment Appeal Tribunal (EAT) in Scotland has ruled that a pro-rata reduction of a bonus for absence on maternity leave was neither sex discrimination nor a pregnancy-related detriment.
Mrs Hoyland was employed by Asda, the supermarket chain. For six months during 2002 she was on maternity leave. Throughout this time Asda operated a bonus scheme, which was based on the performance of the employee's own store: they were awarded a standard bonus for achieving their store's target for the financial year. The rules provided that an individual's bonus payment would be pro-rated to reflect absences of longer than eight consecutive weeks. Maternity leave was expressly treated as absence for this purpose. Mrs Hoyland's bonus was duly reduced pro-rata to reflect her absence on maternity leave. Mrs Hoyland brought proceedings in the Employment Tribunal, claiming that the pro-rata reduction constituted sex discrimination and that it was a pregnancy related detriment.
In the Employment Tribunal, Mrs Hoyland lost the main claim but did win on the point that she should have been awarded bonus for the two week period of compulsory maternity leave immediately after childbirth. She appealed her main point but Asda did not appeal against the ruling on bonus for the compulsory leave period.
The EAT ruled that the bonus constituted "remuneration" and therefore was not a benefit to which Mrs Hoyland was entitled during her maternity leave, under the maternity leave laws. Asda's failure to pay her the bonus could not be a "detriment" otherwise the exclusion of the right to remuneration during maternity leave would be "meaningless". It also ruled that, although the bonus scheme was described as discretionary, the scheme was in fact regulated by the contract of employment. As the Sex Discrimination Act specifically excludes benefits which consist of contractual payments, there was no sex discrimination there they ruled.
This judgment clarifies that, where a bonus is based on collective performance and an individual’s own payment depends on their attendance at work in the relevant period, a worker who takes maternity leave during a bonus year need not be paid bonus for her maternity leave, except the fortnight of compulsory maternity leave. However, the decision may yet be appealed. Also , the decision does not cover the position where bonus is determined by individual performance and therefore the result there could be different when we get a decision on that. Nevertheless, the judgment is very welcome clarification of an important practical issue.
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The original publication date for this article was 29/04/2005.
