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Employment law for employers

Equal Pay – Are there any risks in achieving parity?

In the recent case of Bayfield and Jenner v Wunderman Thompson (UK) Ltd and others 2021 an employer lost a discrimination claim after trying to tackle its gender pay gap.

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The gender pay gap flags the disparity between men and women’s remuneration in the same workplace. Since 1997, the Office for National Statistics has monitored the difference between men and women’s average pay and in 2017 the Gender Pay Gap Regulations were introduced which placed an obligation on affected employers (i.e., those with a headcount of 250 or more) to report and publish the gap in their company. Reporting this data helps organisations to understand the size and causes of any inequality and identify any issues that need to be addressed to resolve them. Whilst this is a positive step, how a particular employer uses that information can create further issues in the employment law sphere. This is demonstrated in the recent case of Bayfield and Jenner v Wunderman Thompson (UK) Ltd and others 2021 where an employer lost a discrimination claim after trying to tackle its gender pay gap.

Facts of the case

In April 2018, the employer produced its Gender Pay Gap Report for 2017. This detailed a mean pay gap between men and women of 38.8% and a median pay gap of 44.7% which was considered to be quite high. The Employment Tribunal (ET) heard evidence that as a result of this report, meetings were held in which the employer had stated its intent to ‘make change and quickly’. Controversy followed when the executive creative director gave a talk stating that the reputation of the firm as one for ‘white straight men’ needed to be ‘obliterated’. Whilst giving this talk, an accompanying slide had put a line through the following text “WHITE, BRITISH, PRIVILEGED, STRAIGHT, MEN” so it appeared as “WHITE, BRITISH, PRIVILEGED, STRAIGHT, MEN”.

This generated a lot of concern within the employer for some male employees as the presentation stated the need to obliterate the reputation of the firm as employing predominately this demographic. Some men raised concerns that this reputation could not be changed without dismissing people. Discussions with HR took place with tensions ‘running high’ on both sides. Shortly after the report and these conversations, the employer made two straight white males redundant both of whom had raised concerns about the presentation. Subsequently, these men brought claims against their employer for sex discrimination and unfair dismissal.

The Employment Tribunal

The ET concluded that the claimants’ dismissal was related to their sex and found that the employer viewed the senior creative team as male-dominated and a major reason for the poor gender pay gap figures. This led the ET to find that the pay gap issue was a significant factor in the employer’s mind and discriminatory even though the presentation was designed to be a strong response to the gender pay gap figures and to promote a positive vision of diversity in the workplace.

In considering hypothetical female comparators to analyse whether the allegations made by the male claimants would have been treated differently if they had they been female, the ET came to the conclusion that they would have been treated differently. They found that whilst there would have been pushback against the female comparators’ views, it would not have led to the employer’s ‘furious reaction’, or an ‘immediate consideration of disciplinary action’, or a ‘decision within 2-3 days to pre-select them for redundancy’. Indeed, the ET stated that the hypothetical female comparators would not have been dismissed because they would have improved the gender pay gap figures.

Consequently, the ET concluded that a significant reason for dismissing the claimants was because they were men and therefore upheld their claims of sex discrimination, unfair dismissal, and victimisation.

Advice for Employers in dealing with gender pay gaps

Due to the legal requirement for larger organisations to publish pay gap reports, companies are acutely aware of the need to mitigate the potential backlash that could damage their reputation if their pay gap figures are significant. However, employers need to exercise good judgement and proportionality in seeking to rectify any disparity and not invertedly or otherwise make hasty decisions that carry their own risks and fall foul of employment legislation.

Between 1997 and 2020, the pay gap for all employees has fallen from 27.5% to 15.5%. This steady decrease is encouraging and although there is some way to go, solving the problem should be considered carefully by organisations rather than adopting a ‘quick fix’ approach. Employers should look to introduce positive programmes aimed at reducing barriers that might affect one demographic over another. These barriers could be at any point, from the early stages of recruitment to the later stages of promotion and retention. Actively choosing one demographic over the other purely on the basis of their sex (or another protected characteristic) is not only likely to breach discrimination law but could also obscure the root causes of pay inequality.

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Patrick Kilgallon

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patrick.kilgallon@collyerbristow.com