SEX DISCRIMINATION/ EQUAL PAY UPDATE

Is the culture of secrecy surrounding City bonuses coming to an end?

 

Louise Barton hit the headlines last September for pursuing an action against Investec Henderson Crosthwaite, for sexual discrimination and equal pay. Ms Barton alleged that she had received less remuneration, and had been awarded lower bonuses, than her male colleagues. The Employment Tribunal, that heard the claim in the first instance, dismissed her claims, but she has now successfully appealed to the Employment Appeals Tribunal against that decision.

 

Whilst an approved copy of the judgment has yet to be handed down, it is reported that the Appeals Tribunal said, last Thursday, that “no Tribunal should be seen to condone a City bonus culture involving secrecy and or a lack of transparency because of the potentially large amounts involved, as a reason for avoiding equal pay obligations”. The Appeals Tribunal has remitted Ms Barton’s case to another Employment Tribunal, to be heard again, and it will be interesting to see how that Tribunal will address her claims in light of the comments made by the Appeals Tribunal.

 

This decision coincides with the introduction of the new equal pay questionnaire. The new equal pay questionnaire was introduced by regulations, yesterday, and will allow employees, who believe that they have not received equal pay for “equal work”, to ask their employers factual questions regarding how their employers have calculated salary and bonus payments. Employers will be given 8 weeks to respond to a questionnaire. If they fail to do so within the prescribed period the Employment Tribunal will be able to draw inferences from that failure, unless it can be demonstrated that an employer had a good reason. Employees may also ask questions about the salaries and bonus awards of their colleagues, and employers are therefore advised to be extremely careful in balancing the requirement to respond to a questionnaire against the duty of confidentiality owed to other employees.

 

The Appeals Tribunal decision, and the introduction of the new equal pay questionnaire may signal the end of the culture of secrecy surrounding City bonuses. Employers are advised to review existing salary structures and bonus award schemes to ensure that there are clear and objective reasons behind the awards made with a view to avoiding not only adverse publicity, but also potential equal pay and sexual discrimination claims.

 

For further information, please contact:

 

Chris Magrath – Tel: (020) 7317 6713 Email: Chris.Magrath@Magrath.Co.UK;

Jessica Knight – Tel: (020) 7317 6787 Email: Jessica.Knight@Magrath.Co.UK;

Adele Martins – Tel: (020) 7317 6719 Email: Adele.Martins@Magrath.Co.UK;

Michael Sissons – Tel: (020) 7317 6793 Email: Michael.Sissons@Magrath.Co.UK;

Kerry Candy – Tel: (020) 7317 6783 Email: Kerry.Candy@Magrath.Co.UK. Or

Robert Starr ‑ Tel: (020) 7317 6722 Email: Robert.Starr@Magrath.co.UK

Associate Offices Gibney Anthony & Flaherty LLP Attorneys-at-Law 665 Fifth Avenue New York NY 10022 USA. David Hole Rechtsanwalt and Solicitor Widenmayerstrasse 28/1V 30538 Munich Germany.

 

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