Did a ‘Witches Hat’ really cost BNP Paribus £2.1m?

In this post, we are going to look at a recent case where an Employment Tribunal upheld a claim of discrimination and awarded the employee one of the highest ever discrimination awards amounting to a whopping £2.1m.

So how did it all go so wrong?

BACKGROUND

BNP Paribas is a global banking and financial services company and operate a prime brokerage business from various locations including London.  Stacey Macken was employed at the London branch and joined the company on 14^th January 2013.

She brought claims against her employer for:

Equal Pay, Sex Discrimination and Victimisation.

Despite being Headhunted for a senior role, Ms Macken was given a junior contract with a salary of £120,000.  Her comparative male colleague who undertook a similar role was paid £160,000 per annum.

The Tribunal Judgement detailed various disparities in the Company’s recruitment process and criticised the distinct lack of a Job Evaluation process.

They found, amongst many other things, that Ms Macken duties did not justify such a pay differential and that her skills and experience exceeded that of her male colleague comparator.  There were also significant differences in bonus awards that were made to Ms Macken comparative to her male colleague and totally unjustifiably so.

Over a four-year period, Ms Macken received £33,000 in bonuses where her comparator male colleague received £167,000 over the same period.

When Ms Macken raised her concerns with her managers, she was fobbed off by her bosses and the Bank failed to address any of her complaints.  They even downgraded her in performance appraisals which was also found to be totally unjustifiable.

In addition, Ms Macken was subjected to a number of sexist incidents, one of which involved a Witches Hat being left on her desk by drunk male colleagues.   Her boss frequently responding to her questions with the expression ‘not now Stacey’.  There were many incidents which culminated in Ms Macken finally being ‘signed off’ work with depression and anxiety.

Many of the claims brought in this case were actually ‘out of time’.   This makes the final compensation figure even more shocking.

The judge awarded compensation to Ms Macken of £2.1 MILLION pounds.  One of the largest ever awards in UK Tribunal history.

WHAT WENT WRONG

The tribunal upheld Ms Macken’s claims for Direct Sex Discrimination, Victimisation and Equal Pay.

They also found that Ms Macken had been subjected to an inherently sexist act (the Witches Hat) and had been treated in a demeaning way deliberately to belittle her.

The Tribunal found that the bonus disparity was sex discrimination.  They heavily criticised the Company’s recruitment process for having no Job Descriptions and being ‘woefully inadequate’ due to the failure of any type of process or audit/documentation trail.  The recruitment process was all about ‘fit’ and nothing about skills or experience.   It was totally subjective and based on no facts or assessments of competency whatsoever.

They found that the pay disparity was simply a case of comparison.  Same job, same grade, same pay.  This clearly was not what Ms Macken had experienced.

The company kept NO records and lacked any transparency in the grading of their pay or job structure.  All decision makers were predominately male in a very male dominated environment and there was total inconsistency in in how each comparator was treated.

Emails also divulged information which supported Ms Macken’s claims following a Subject Access Request disclosure, and this further damaged any defence the Company might have brought.

The complaints made by Ms Macken were inadequately investigated and this was found to have constituted Victimisation alongside many other examples.

All in all,  it was a catalogue of very expensive and totally preventable mistakes brought about by appalling processes, procedures, assumptions, practices, culture and management ability.

HOW WAS THE AWARD CALCULATED?

Well, it is very rare for compensation awards to be anywhere near this sort of figure and part of the reason why it was so high was due to the earnings and earning potential of the Claimant.  There was also and ACAS uplift award (for failing to deal with complaints effectively) of £300k and an interest charge of £163k.

The full breakdown of the awards was:

• Pay and Bonus £400k
• Personal Injury £212k
• Future losses £860k (includes future earnings and pension rights)
• Additional Compensation – Injury to Feelings £124k
• ACAS Uplift £300k
• Interest £163k

TOTAL £2.1m … WOW

WHAT CAN WE LEARN FROM THIS?

The successful employment of any individual starts from the beginning of the employment lifecycle.

The Recruitment Process

Having a robust recruitment processes where candidates are correctly assessed based on their ability and competency to do the job you are recruiting for is essential.  Making sure records of all assessments are kept and every candidate is treated in a consistent, fair and respectful manner.

Always be prepared to justify recruitment decisions by providing evidence of your candidate scoring criteria.  Remember candidates are entitled to make Subject Access Requests to get this data anyway so being open and honest from the outset makes good practice and builds trust.

Job Evaluation, Pay Structures and Job Grades

In a small company, complex pay structures are not necessary, but you must always ensure that what you pay your employees is fair and consistent.  In a larger company where there are many different roles and people, a form of job evaluation, pay policy and pay structure should be present.

Job Evaluation is a tried and tested method of measuring job size in order to determine where a role  should sit within a corporate hierarchy.  The size of that job then determines the grade or pay in accordance with the company’s pay and grading structure.

It demonstrates fairness and compliance with Equal Pay legislation.

Employers should avoid making an assumption that one job justifies more pay than another.   Unless you can show that the skills and experience needed for each one are significantly different you may struggle to justify a pay differential.

Job Evaluation can help you avoid this.

Polices, Procedures and Management Training

All employers should have key policies and procedures and should know how to use them.

Equal opportunities and anti-harassment policies and procedures are very important as is ensuring  that managers KNOW HOW TO USE THEM.  It is one thing having a policy, but you must ensure it is used effectively.

Do not ignore grievances, regardless of how small you perceive them to be.  Make sure you have a Grievance Procedure and make sure it is understood and followed by managers.

ACAS are a great source of valuable information for employers and Tribunals expect employers to follow their guidance.  There is never an excuse that will be acceptable if the basics are not followed or in place.

Training managers regularly in spotting and dealing with any form of discrimination or unacceptable behaviour in the workplace.  Keeping training records to demonstrate that you take things seriously will be key to justifying any action you may need to take.

They also really help you deal with complex issues fairly.  Following a policy or procedure is much easier than making it up as you go along.

Culture

Culture is the personality of your organisation.   It is what makes you ‘tick’ as a Company.  It is all about your values, traditions, beliefs, behaviours, attitudes and interactions with others.  A positive workplace culture will help to attract talent, drive employee engagement and make your organisation a happy and thriving place to work.

Clearly this was not the case at BNP Paribas which, as a very large organisation, is truly problematic and almost certainly played a significant part in what went wrong.

The end result was a huge tribunal award and massive reputational damage.  Would you want to work for a company who treats its employees like this?  I certainly wouldn’t.

Damage like this takes years and years to fix so focusing on creating a positive culture and training managers is well worth the investment and the return on that investment.

Record Keeping and Documentation

Record keeping is an absolute MUST DO.  Always keep documented records especially of formal processes such as recruitment or appraisal.

If you are going through a formal process like a grievance or disciplinary ensure that the people conducting the meeting understand what they are doing.  They need to make detailed notes and keep all records of the meetings.

I am not a fan of recording formal meetings but sometimes it can be helpful depending on the circumstances.  Meetings should never be recorded without the permission of everybody involved.

Make diary notes of conversations and agreements reached with employees and follow up with emails to confirm the understanding of a situation even if the topic being discussed is not being dealt with via a formal process.

It is just a good business practice,  but be very careful what you put in written notes or emails and always assume that they may be used as evidence at a later date.

Emails and all other documentation can be interrogated by Tribunals and/or divulged following a Subject Access Request, so always assume that what your write down might come back to bite you.

That way, it might make you think just that little bit more.  People are unpredictable so, regardless of how frustrating or difficult the situation you are dealing with might be, try to keep your personal feelings away from any written documents.