Sex discrimination and equal pay: why a city banker was awarded £2m

This week we explore the recent Employment Tribunal decision of Macken v BNP Paribas in which Stacey Macken, a banker at BNP Paribas, was awarded over £2m for her claims of sex discrimination and equal pay – reportedly one of the largest awards ever made by a British Tribunal. In this blog we take a look at why she was awarded so much and what steps organizations can take to avoid such expensive and reputationally damaging failures.

What were the Tribunals findings?

Ms Macken joined BNP Paribas’ prime brokerage team in its London branch at the start of 2013. In 2017, while still an employee of BNP Paribas, Ms Macken brought successful claims against her employer for direct sex discrimination, victimisation and equal pay. Here are the main facts and findings:

• During Ms Macken’s employment, she was subjected to acts of sexism in a predominantly male environment, for instance a witch’s hat was left on her desk and she was told “not now Stacey” by her manager so regularly that it became an in joke among her colleagues.
  
  
• Key to the Tribunal’s finding of discriminatory treatment was the fact that on recruitment Ms Macken had more relevant experience than her real life comparator, yet was started on a significantly smaller salary (£120,000 per annum versus £160,000). This was despite both employees joining a few months apart and their roles having substantively identical job descriptions. At the time of the decision, Ms Macken was also still being paid thousands of pounds less than her direct male comparator. The Tribunal could find no evidence as to why Ms Macken’s managers asserted that she was junior relative to her comparator upon hire and why she continued to be regarded as such throughout her employment. In fact, the Tribunal found it could draw negative inferences of discrimination from the lack of records and transparency in the recruitment process.
  
  
• During her employment, Ms Macken also received markedly less bonus pay than her comparator – in one year, £10,000 compared to £68,950. Again, the Tribunal could find no reasoning or records to justify this, noting that for one year they were awarded the same performance band but markedly different bonuses. The Tribunal decided that the use of subjective words for her male comparator such as “pleasure to work with” and “good cultural fit” in appraisals could allow for an inference of discrimination to be drawn. It did not accept the employer’s implication that it is simply accepted practice that banks and financial institutions have opaque pay structures and ways of awarding bonuses.
  
  
• Once Ms Macken raised her concerns, the Tribunal found she was subjected to victimisation by the fact that HR failed to undertake an adequate investigation into why there was a difference in pay and because the grievance process (including the appeal) was designed to reject her complaint. She was also subject to victimisation during her performance reviews where her alleged “underperformance” was linked to her raising issues about equal pay which in turn led to her not receiving any bonus for those years.
  
  
• Ms Macken’s discriminatory treatment by her employer was found to have caused her personal injury in the form of mental health problems.

How was compensation calculated?

As a result of such damning findings, the Tribunal awarded Ms Macken a total of £2,081,449. This covered losses (past and future) she suffered as a result of unequal pay and personal injury as well as additional compensation for the injury itself, loss of congenial employment, injury to feelings, aggravated damages and interest.

In terms of injury to feelings, she was awarded at the middle of upper Vento band at £50,000 because of the fact she had suffered discrimination over such a long time and was treated badly after she raised concerns.

Ms Macken was awarded aggravated damages of £15,000 due to the discriminatory motive of her manager and spiteful and vindictive conduct of her managers once she raised her concerns.

The Tribunal also awarded a 20 per cent uplift on the total award, because of her employer’s failure to follow the ACAS Code on Disciplinary and Grievances by not carrying out a necessary investigation.

As well as financial awards, the Tribunal ordered BNP Paribas to carry out an equal pay audit as a consequence of its findings and, although it did not order it, the Tribunal recommended that Ms Macken receive a fuller and more candid apology.

What can employers do to avoid discrimination in the workplace?

Such a large sum being awarded for a discrimination claim should make employers take note. Although these were an egregious set of facts, it shows that Tribunals are willing to take a hard stance with employers who allow discriminatory behaviour to carry on unchecked in the workplace.

We set out some key take-aways below to help organisations avoid this:

• The Tribunal has made it clear that it will not tolerate a “laddy” culture. Therefore, it is important to foster an inclusive culture which respects diversity and where discriminatory or disrespectful language is called out and addressed in a prompt and thorough manner. An effective tool to tackle this is company-wide training which should make it clear such behaviour is not acceptable. Such steps may also assist employers to argue the defence under the Equality Act 2010 that they took “all reasonable steps” to avoid discrimination in their workplace, something which is discussed further in our previous article on workplace banter. To be effective, it is important that any such training is repeated regularly, as highlighted by our blog Don’t let your equality and diversity training go “stale”
  
  
• In the same vein, specific training should be given for managers. Make sure they are aware of that use of subjective language in performance reviews, such as “pleasure to work with” and “good cultural fit”, should be avoided and instead there should be a greater reliance on objective metrics. Importantly, managers should be trained to ensure any appraisal is undertaken objectively whether or not the employee has an ongoing grievance.
  
  
• Review and where necessary amend your policies (for instance equal opportunities and bullying & harassment) to make sure they are robust and are being followed by employees and managers at all levels.
  
  
• Foster a culture where decisions and processes relating to recruitment, salary, bonuses, and appraisals are carried out objectively and recorded accurately and thoroughly. It is worth noting in this case that the Tribunal found that discrimination could be inferred from the lack of evidence behind apparently subjective decisions.
  
  
• Employers should be careful to follow the ACAS Code on Disciplinary and Grievances when responding to an employee raising concerns. In this instance, the failure of BNP Paribas to carry out a proper investigation into unequal pay was held to amount to victimisation and resulted in a 20 per cent uplift to the Claimant’s award.
  
  
• Use the data – If your organisation finds gender pay gaps in the way employees are paid, consider what you can do to rectify this. Read our blog on Increasing gender diversity in the workplace for some ideas.

If you require further information about anything covered in this blog, please contact Caitlin Farrar, or your usual contact at the firm on +44 (0)20 3375 7000.

This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.

© Farrer & Co LLP, March 2022