Wed 15 Jan 2020

Stark warning for employers without clear pay systems

Samira Ahmed's high profile victory in her equal pay claim against the BBC should be sounding alarm bells for many employers who do not have a clear and transparent system for valuing jobs and setting pay. 

In its judgment issued on 10 January, the London Central Employment Tribunal found that the work carried out by Ahmed in presenting 'Newswatch' was the same as the work carried out by Jeremy Vine in presenting 'Points of View'.  It went on to find that the BBC had not been able to explain why they had paid Vine more than Ahmed for the same work.  The BBC had therefore failed to show that the difference in pay between the two presenters did not arise because of sex discrimination.  Ahmed did not have to prove that the reason for the difference in the pay between herself and Vine was sex discrimination - the BBC simply failed to prove that there was another reason for the difference.

The way equal pay law works is this: once an employee of one sex can show that their work is the same or similar to a comparator of the opposite sex, the burden shifts to the employer to show that they have a 'material factor' that explains the difference in pay.  All that the employer has to do is show that the factor explains the difference in pay and is not related to or tainted by sex.  The BBC had many factors that they tried to rely on and all were potentially valid explanations and potentially gender neutral.  Their problem was that they did not have sufficient evidence to prove that any of those factors fully explained the reason for the difference in pay.

The BBC had no direct evidence from the people who made the decisions about what to pay each presenter for their respective roles. Furthermore, they did not have sufficient records or documentation to show why Ahmed was paid £440 per episode for Newswatch and Vine £3,000 for Points of View - six times more - for work which the Tribunal found was the same.  The BBC tried to argue that the higher pay for Vine was due to 'specific market pressures' where a rival broadcaster had made an offer for his services.  However, the evidence showed that before he had been offered the higher rate, Vine had already agreed an exclusivity deal with the BBC. They also said that they needed to pay Vine at this rate in order to retain his services when the evidence showed that a few years later he was willing to take a pay cut to over half that rate.  The tried to argue that the two programmes and presenters had very different profiles - however there was no evidence whatsoever that these differences were taken into account by those who made the decisions on pay.

The BBC complained about the fact that the managers involved at the time had left and they could not be called as witnesses.  However, as the Tribunal made clear this would not have been a problem if the BBC had been able to point to a clear and transparent process for deciding what those jobs were worth and a clear pay structure for deciding what the pay should be for those jobs. Instead the case shows an ad hoc process where decisions on pay are made by different managers in different parts of an organisation with no job evaluation system to give a value to those jobs and no clear pay structure for managers to follow about what those jobs should be paid.

The case does not involve any new law or change in approach by the Tribunal.  The case is a straightforward application of the basics of equal pay law that has been in force since 1975.  However, the high profile nature of the claim - and the hundreds more against the BBC that are waiting in the wings - increases awareness of the issue and surely increases the risk of similar claims against other employers, large or small.  Larger employers who have to report on their gender pay gap will already be aware whether or not they have gender pay gaps in their organisation and they should be carrying out an equal pay audit to investigate the cause of those gaps further.  However, any organisation where the valuing of jobs is not based on objective and consistently applied factors and where the setting of pay is unstructured and lacks transparency, should be alive to the possibility of equal pay claims.

The risks are not to be underestimated.  The Ahmed claim is said to be worth in the region of £700,000.  Claims can go back 5 years in Scotland and 6 years in England and interest is payable at 8% on arrears of pay if the case goes against the employer.  One claim - whether successful or not - opens an employer up to an expensive and complex legal process and exposes the employer's entire pay system (or lack of it), which can inevitably lead to claims from others in the organisation too.

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