Do we need to provide childcare vouchers for the full duration of maternity leave?

Until recently some employers have not been giving childcare vouchers to employees on maternity leave or have deducted the value of the vouchers from their employees’ maternity pay. In October 2008 the European Court ruled that such action was illegal and that employers are liable to pay for the cost of childcare vouchers when employees are on maternity leave even if they are on unpaid maternity leave.  

Following the ruling the British Chamber of Commerce has recommended that employers stop offering childcare vouchers if they are worried about becoming liable for the cost of the vouchers when an employee is on unpaid maternity leave. Some employers are also considering varying the amount and length of the contractual maternity pay entitlement offered. The Department for Business Innovation and Skills (BIS) has emphasised the benefits of childcare vouchers and has committed to providing guidance to employers in light of the ruling of the European Court. 

ECU recognises that it is a matter of policy for each higher education institution (HEI) as to whether or not they continue their childcare voucher scheme. However, until guidance is issued by BIS, ECU recommends that HEIs:

• Continue their childcare voucher schemes and maintain their current levels of maternity pay entitlement as such initiatives have real benefits for the recruitment and retention of employees, in particular female employees.
• Ensure that employees receive childcare vouchers for the full duration of their maternity leave. Failure to provide vouchers while employees are on unpaid maternity leave would constitute a breach in European Law.
• Impact assess any proposals to remove childcare voucher schemes or change levels of maternity pay entitlement in line with the requirements of the Gender Equality Duty.