During maternity leave an employee is not entitled to the benefit of terms and conditions relating to remuneration, but what counts as "remuneration"?

Under reg.9 of the Maternity and Parental Leave etc Regulations 1999 (SI 1999/3312) "only sums payable to an employee by way of wages or salary are to be treated as remuneration". Remuneration includes the monetary payments under an employee's contract that are replaced by maternity pay during maternity leave. It also includes contractual sick pay (Department for Work and Pensions v Sutcliffe EAT/0319/07). However, it does not include benefits such as the accrual of annual leave, life or health insurance cover or personal use of a mobile phone or company car.

It is difficult to establish whether or not some benefits constitute remuneration. For example, it could be argued that a car allowance is a benefit that does not comprise wages or salary for work done, and therefore that it is not remuneration. However, it could also be argued that, because a car allowance is a cash benefit and regarded as an uplift on salary attracting national insurance contributions, it is wages or salary and is therefore not payable during maternity leave.

Bonuses are another area of contention. Whether a bonus is contractual or discretionary and the reason for its payment impacts on whether or not it amounts to remuneration. For example, a contractual bonus that makes up part of an employee's pay, such as a performance-related bonus payment, is likely to be classed as "remuneration" and therefore not be payable during maternity leave (although it would amount to sex discrimination not to pay the proportion of the bonus that relates to the period when the employee was at work). Arguably, a bonus that is not part of normal salary, such as a discretionary Christmas bonus, could come outside the definition of remuneration and be payable.