Labour Research January 2000

Law Matters

Bonuses and pay rights

The European Court of Justice has ruled that, for the purpose of equal pay rights, pay can include discretionary bonuses even if paid mainly or exclusively as an incentive for future work or loyalty. The ruling means that employers cannot exclude women on compulsory maternity leave from entitlement to the bonus, merely because they happened not to be in work on the date that the employer had set for calculation of the bonus. However, the court also ruled that this protection applied only during the compulsory maternity period, which in the UK amounts to a period of just two weeks immediately after the baby's birth. If a woman takes extended parenting leave (for example a career break) she can be excluded from entitlement to any bonus calculated on a date when she is on the break.