Discretionary bonuses

Case 9: The facts

When her bonus was reduced to reflect the time that she was off work on maternity leave, Elidh Hoyland brought a tribunal claim. The Employment Appeal Tribunal ruled (see Workplace Report, May 2005) that this was not a sex discrimination claim, because a woman’s pay is not protected during maternity leave.

The Court of Session was asked to decide whether the claim came under the Equal Pay Act 1970 (EPA) or the SDA. The EPA covers any contractual terms (such as different holiday entitlement for men and women, for example) and not just pay, while the SDA covers discrimination in non-contractual terms – it does not concern payments that are regulated by the employment contract (section 6(6)).

Hoyland argued that, as the bonus was discretionary, it was not “regulated by” the contract and was therefore governed by the SDA and not the EPA.

The ruling

The court held that the bonus payment was regulated by the employment contract, because the entitlement arose from that contract and would not exist if it were not for that contract. Hoyland’s claim was therefore dismissed, as it should have been brought under the EPA rather than the SDA.

Hoyland v Asda Stores Ltd [2006] CSIH 21 [2006] IRLR 468