Employer loses discrimination claim after sacking two male directors to reduce its gender pay gap

Since 2017, if you are an employer who has a headcount of 250 or more, you must publish information about the gender pay gap in your organisation. Many businesses, particularly those with big gender pay gaps, also explain what steps they are taking to narrow them.

A recent employment tribunal case has seen an employer come under fire for its attempts to reduce the gender pay gap at the top of its structure by dismissing two of its highly paid male creative directors as part of a cost cutting exercise. 

Facts

Bayfield v Wunderman Thompson concerned an advertising agency which, in 2018, published a high gender pay gap of 44.7%. Its accompanying report described these results as 'disappointing' and said that it was determined to improve them. It also said that the agency had an acute problem of female representation in the creative team and set out a number of steps it intended to take to advance, retain and attract women into senior positions.   

Shortly afterwards, two of the agency’s directors attended a diversity conference and gave a presentation which addressed its reputation as a “Knightsbridge boys’ club" and its desire to improve its gender pay reporting figures. External delegates considered it to be hard-hitting, but generally uncontroversial. However, the presentation was accompanied by a slide referring to ‘white, British, privileged, straight men’, with the text struck through. The speakers said the agency's reputation as being full of these types of employees had to be ‘obliterated’. These comments were widely reported in the trade press.

The claimants, Chas Bayfield and Dave Jenner, both white men in their fifties, complained to HR that the presentation showed bias against heterosexual white men and that they feared for their jobs. The agency tried to reassure them that it wanted to 'obliterate' its reputation rather than its current personnel, but the men were unconvinced and their relationship with senior managers in the agency soured.

Shortly afterwards, the two men were included in a redundancy selection pool of all the creative directors and were subsequently dismissed on the grounds of redundancy. During the process, the agency removed a women from the selection pool because they were concerned about losing females in the creative team. She had scored lowest during a previous redundancy exercise which had been abandoned at the start of the year.

They both brought a number of claims in the tribunal, including unfair dismissal, sex discrimination and victimisation.

Tribunal decision

The employment tribunal acknowledged that the agency's desire to improve diversity was a legitimate response to its gender pay gap report. It accepted that the agency's revenue had fallen rapidly and that it needed to cut costs, but found that the redundancy selection process was a sham designed to implement a predetermined decision to dismiss the claimants in favour of opening up senior positions that could be filled by women. 

It found that the agency wouldn't have treated women with a similar career profile and a similar age to the claimants in the same way and that they had been unfairly dismissed, victimised and discriminated against due to their sex. 

When is positive action lawful?

While many employers will have a legitimate desire to improve their gender pay gap, this case illustrates that getting rid of men at the top of an organisation in order to make way for women is likely to be unlawful. 

Section 159 of the Equality Act 2010 allows employers to take 'positive action' to help individuals with a protected characteristic who are either disadvantaged or who are under-represented in their workplace provided they are 'as qualified' as the other candidate/s. However, these provisions only relate to recruitment and promotion - they can't be used to justify selecting a woman over a man in a redundancy exercise, even where both candidates score equally in a selection process. 

There are, however, other ways employers can help to improve their gender pay gaps including putting in place:

Balanced interview panels

Train interviewers to recognise the unconscious biases we all have and to understand the reasons why having a diverse talent pool leads to better decisions. And, to minimise the risk of male managers recruiting in their own image, try and aim for a mix of women and men on the interview panel.

Mentoring schemes

Mentoring that is aimed at disadvantaged groups, such as those returning to the workplace after maternity leave, will help you to develop a diverse workforce. Reciprocal mentoring benefits not just the mentee but helps the mentor to understand the organisation’s culture towards women and what needs to change.

Appointing diversity managers

It's helpful to appoint a diversity manager whose role is to implement and review steps to improve the gender pay gap. If your organisation is too small to appoint a dedicated diversity manager, you could set up a diversity task force of existing employees who can look at ways to improve diversity in your organisation.

Networking

As with mentoring, targeted networking opportunities for female employees or those returning from maternity leave will help to break down barriers to women returning to work or progressing through your organisation. In turn, this will assist in narrowing the gender pay gap.

Pay reviews and promotions

Establish clear criteria for reviewing pay and promoting employees that factor in periods of maternity leave to ensure that women are not pushed back a year in pay or seniority each time they take maternity leave. Benchmarking or job evaluation schemes are also beneficial to ensure men and women receive the same pay for the same or equivalent work or work of equal value and to avoid equal pay claims.

Flexible working

Flexible working, backed up by clear guidance and support, will help you to retain women and enable them to progress to roles which reflect their skills and seniority.

Our fixed price employment law service

If you are interested in finding out about how we can support you to improve your gender pay gap with our fixed-fee annual retainer, or flexible discounted bank of hours service, please contact Gareth Finney.

This article has been adapted from one written by Deborah Casale and Sacha Sokhi which was first published in Employment Law Journal (October 2021) and is also available on lawjournals.co.uk