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Car Allowance during Maternity

Car Allowance during Maternity

Is car allowance always seen as the benefit equivalent of having a car and therefore something that is continued through OML or can it be counted as part of salary therefore not paid through OML ?
jannik jensen

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21st Feb 2005 20:01

Jannik
really good question. My advice would be to pay it but you may get away with it if you only pay allowances and no-one gets a car. If it is instead of a car and others are given/choose then you would be lucky to 'get away with it'. Other views would be greatly appreciated
Peter

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21st Feb 2005 22:46

The matter hinges on whether the car allowance is classed as remuneration. The term remuneration is defined as "sums payable as wages or salary" and any guidance I have read suggests that payments such as car allowances would probably not fall within this definition although to the best of my knowledge this has not been tested.

Therefore I think a prudent employer would err on the side of caution and allow employees to continue to receive the car allowance during OML to avoid the risk of an ET claim.

regards

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25th Feb 2005 09:19

I'm with Peter on this one.
It is not necessary to show a male comparator when making a claim under SDA for less favourable treatment due to pregnancy or maternity leave. Therefore whether employees on long term sickness absence continue to receive a car allowance or not would be irrelevant.
The issue hinges on whether a car allowance is classed as "remuneration" in which case there is no right to continue to receive it during OML or whether it is not classed as "remuneration"(and I personally favour this interpretation) in which case the employee should continue to receive it during OML.

However I would be interested to hear any different views

regards

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By Anonymous
24th Feb 2005 13:11

I also think you will have to pay it.

There might be an argument not to pay where a car is provided purely for business purposes and no other but it is difficult to see how this could be extended to a car allowance.

What would you do if someone was on long term sickness absence - would you pay it or not? - if you would pay, then that is another reason why you should pay in this case (in my opinion). However, it would be dangerous to use the reverse argument, (ie not to pay it for maternity becuase you don't pay for long term sickness) because you're not supposed to equate maternity with sickness.

Peter

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By Anonymous
24th Feb 2005 17:24

I think it has been established (at Employment Tribunals) that maternity leave should not be compared to long term sick.

I'd be interested to hear other people's views.

Peter

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By Anonymous
24th Feb 2005 15:22

I would suggest that whether or not you pay Car Allowance during OML could be decided on the basis of how you would treat someone that is off on long term sick leave (or any other leave which lasts 6 months) whatever their gender.

We have decided that if someone had a company leased car we would allow them to keep it while on OML or on long term sick leave but not if they are taking a sabbatical or long term unpaid leave.

However if someone was on long term sick leave which lasts longer than 6 months we would be asking them to return their company leased car and would stop their car allowance until such time as they would be returning to work.

Hence, the question is if someone (whatever their gender and for whatever reasons) is away from work for a period of time (in this case 6 months or more) what would we do if they are in receipt of a car allowance or drive a company leased car?

The issue is first of all one of fairness and secondly whether this would disadvantage one group of individuals to a greater extent than another. I would suggest that there may well be an issue if you have a lot of women on maternity leave or likely to be and very few if any, men that are away for more than 6 months, whatever the reason. As this is likely to affect more women than men, removing the Car Allowance and/or the leased car may be discriminatory!

Hope this helps.

Linda

Further to what was said after I posted this comment - what I failed to say is that we have clearly stated that car/car allowance is not part of remuneration and is only given if required for business purposes. We also have removed the car/car allowance if someone moves internally to a position which no longer requires the use of a car as part of the role.

We have not yet been required to take back a car or take away a car allowance since no one on maternity leave has yet been in this position.

We used the comparison to the treatment of those on long term sick leave as a lever to ensure that we continued to give the car allowance since it had been suggested that it not be given, even tho we have continued to give it to those on long term sick leave, inspite of the company rules. Hence, the comparision was for the benefit of those on maternity leave, not the other way around.

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