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Employment Law Bulletin: Bonuses and Commission during Maternity Leave
Monday, 24 September 2007 16:20
Employees have the right to retain all of their contractual entitlements during ordinary maternity leave (“OML”), except the right to receive remuneration, i.e. basic salary or wages
  • Contractual bonuses or commissions which are performance related will more than likely be classed as remuneration and are therefore not payable during OML unless they relate to work done prior to, or following, maternity leave
  • Employers can therefore pro rata any contractual bonus or commission payments to reflect the period of absence on maternity leave. The compulsory two-week period of maternity leave cannot be pro-rated and any bonus or commission must be paid in full for that period.
  • Discretionary bonuses which are payable to all employees and are not performance related, i.e. a one–off profit-related or loyalty bonus, will not generally be classed as remuneration and must be paid in full to employees on maternity leave. Failure to pay a discretionary bonus in full to an employee on maternity leave is likely to constitute sex discrimination
  • Employers can potentially withhold discretionary bonus payments to employees on additional maternity leave (“AML”) as most contractual entitlements are not maintained during AML. However, this could still give rise to a claim of sex discrimination.  The advice therefore is always to take legal advice first - a critical issue will be whether your bonus or commission scheme is contractual or discretionary.

If you have any queries about restrictive covenants and injunctions please contact David Greenhalgh at H2O Law LLP on 020 7405 4700.

Whilst H2O Law LLP makes every attempt to ensure the accuracy and reliability of the information contained in this article the information should not be relied upon as a substitute for formal legal advice.  H2O Law LLP, its employees and agents will not be responsible for any loss, howsoever arising, from the use of or reliance upon this information. © H2O Law LLP 2007
 

 
 

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