Ask Auntie - Do pension contributions need to be maintained during sick leave?

January 6, 2014

Dear Auntie

Our company has a policy to ensure that employer pension contributions are maintained for employees on maternity/paternity/adoption leave whilst they are receiving statutory maternity/paternity/adoption pay. This is at a level equal to that which the company would make if the employee were normally at work and receiving their full salary. However, we do not make pension contributions at a similar level for those who are absent on extended sick leave, whilst they are receiving statutory sick pay. I believe the directors decided to make this distinction in order to support families.

An employee has just claimed that this policy is unlawful discrimination. Is that correct?

From a Keen Reader of HR law!


Dear Keen Reader

UK maternity leave legislation provides that any employment-related benefit, including any occupational pension, is subject to the “normal employment requirement”. This means that a woman’s paid maternity leave must be treated as if it were a period during which she was working normally for her normal pay. Similar legislation applies in relation to men on paternity leave and parents on adoption leave. Consequently, your company’s actions in this respect are compliant with the minimum requirements of statute. There is no equivalent requirement in relation to the payment of statutory sick pay (although the position may be different in relation to any company sick pay policy that your company might have in place).

It is therefore not uncommon for employers to make a distinction between these benefits because they are only legally required to pay pension during paid maternity/paternity/adoption leave.

In order for the practice to be discriminatory, as claimed by your employee, it would have to result in either:

(a) recipients of statutory sick pay being treated less favourably by the company than recipients of statutory maternity/paternity/adoption pay because of a protected characteristic (direct discrimination); or

(b) the company applying a provision, criterion or practice to recipients of statutory sick pay which is discriminatory in relation to a relevant protected characteristic of recipients of statutory sick pay (indirect discrimination).

As you may be aware, the protected characteristics are age, disability, gender reassignment, marriage & civil partnership, pregnancy & maternity, race, religion or belief, sex and sexual orientation. Not having a family, for example, is not a protected characteristic. Given there is no protected characteristic which is the reason for the company making the distinction between recipients of statutory sick pay and statutory maternity/paternity/adoption pay, it cannot be direct discrimination.

There may be an argument if a recipient of statutory sick pay has a protected characteristic, for example a disability. A recipient of statutory sick pay who is disabled would have to show that a disabled person is more likely to be in receipt of statutory sick pay than a non-disabled person. The argument would be that this practice puts disabled persons at a particular disadvantage when compared with non-disabled persons and is therefore indirectly discriminatory. The company would be able to defend any such claim if it could show that the distinction is a proportionate means of achieving a legitimate aim. It is likely that the legitimate aim relied upon would be compliance with the “normal employment requirement” in relation to benefits during paid maternity/paternity/adoption leave. If any such indirect discrimination case were to succeed it would very likely lead to a change in the current statutory law.


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