Employment and pensions

The learnings behind the 'witch's hat': HR lessons from Macken v BNP Paribas

Published on 3rd Mar 2022

Where did the bank go wrong and what can we learn from the case?  

If you work in financial services or in HR and employment legal generally, you have probably already seen that the Employment Tribunal in a recent remedy judgment awarded over £2million in a sex discrimination case against the bank BNP Paribas. Many salacious details have been widely reported including the fact that drunken male colleagues left a witch's hat  on Ms Macken's desk, a manager telling her about his friend's sexual role play with his wife and a manager's ubiquitous use of the phrase "not now, Stacey"

From the headlines, you would be forgiven for thinking that Stacey Macken  v BNP Paribas was a sexual harassment case. In fact, the claimant was successful in her claims for equal pay, sex discrimination and victimisation. Many of the allegations that have been reported were actually out of time and not found to be part of a continuing act, so no formal findings were made on them. However, it is clear that the tribunal accepted Ms Macken's evidence on these points and they were considered relevant to the tribunal deciding that she had been discriminated against. 

The Employment Tribunal gave its liability ruling on the claim in 2019. We run through the key findings below.

Equal pay

Ms Macken brought an equal pay claim by reference to four male comparators. She was successful in relation to comparator 1 (C1). The tribunal found that Ms Macken and C1 were hired just a few months apart, to do the same job, but on £120,000 and £160,000 respectively.  

The tribunal noted that there were "woefully inadequate"  records of the recruitment process, which led to the tribunal drawing inferences of discrimination.  The bank's position was that, although the job titles and job descriptions were the same, the claimant was "junior" and C1 was "senior". There was no documentary evidence from the hiring process to back up this distinction. While there was a note that the manager thought the claimant was "too light", there didn’t appear to be an objective basis for this assessment. The tribunal felt the subjective comments about the two candidates demonstrated the manager's bias and that he may have been looking for someone who looked like himself or his assumption of what a senior manager should look like. It was relevant that Ms Macken and C1 both thought that they were in the same role. They were not told that one was junior and one was senior and did not operate in that way. 

The bank did use McLagan codes to benchmark the pay offered to Ms Macken and C1, but this was applied after the fact simply to justify the level of pay that the hiring manager wanted to award. HR was called in to rubber stamp the manager's decision; there was no application of objective criteria.

The bank tried to use the material factor defence to justify the difference in pay, citing the fact that they needed to entice C1 away from his employer, there was a difference in their levels of pay at their previous employers, and Ms Macken proposed £120,000 as her salary. This was rejected. The tribunal found that the main factor in the pay differential was that they were treated as junior/senior hires and that was attributable to gender.

The bank has been ordered to carry out an equal pay audit. 

Victimisation

Ms Macken did a number of protected acts in raising her concerns about equal pay from September 2014 and on several occasions throughout her employment. This led to increasingly difficult working relationships with her managers. In 2015, she did receive a small £5,000 pay rise at which time gender equality was referenced, which was an implicit acceptance there was an equal pay issue.

Following the pay complaints and the bank's failure to adequately address those complaints, the relationship between Ms Macken and her manager deteriorated. He used the rude, belittling and dismissive phrase, "not now, Stacey" so much that colleagues commented about it. In 2016, Ms Macken's manager asked if she thought BNP was the right bank for her. The tribunal noted this was very negative and belittling and was an act of victimisation. 

As the relationship deteriorated so too did Ms Macken's performance ratings. There was a fundamental change in attitude towards Ms Macken because of her complaints. From 2016, Ms Macken started documenting why she disagreed with her performance ratings and asking for evidence or examples to support the managers' assessment. Her managers felt her refusal to accept feedback led to unacceptable behaviour and unfounded allegations.  The tribunal commented that they reality was that the claimant did listen to feedback and produced detailed (on occasions excessively detailed) responses. It was the respondent that would not respond to her comments. The tribunal noted that the manager's approach to performance reviews was hostile and unreasonable, and was an act of victimisation.

In 2017, the manager started recruiting Ms Macken's replacement and wanted to score her the lowest possible performance rating. By this point the relationship had completely broken down, and this was victimisation.

In both the grievance and appeal, the tribunal found that the processes were used to justify the bank's position rather than using them as an opportunity to genuinely investigate and resolve the issues. The tribunal found that the inadequate investigations into Ms Macken's internal complaints amounted to victimisation. They also awarded a 20% Acas  uplift to her compensation in the light of the significant failings of the processes.

Sex discrimination

Ms Macken was also successful in her claim of sex discrimination in relation to the award of bonuses. Ms Macken received only up to £10,000 in bonuses each year, and C1 received more in every year, up to around £70,000. The bank sought to justify this on the basis of their performance ratings. While performance reviews can explain difference in bonus, in this case her ratings reducing was victimisation and based on deterioration in working relationships caused by her complaints of discrimination and unequal pay.

How did the tribunal reach £2 million?

BNP made a lump-sum payment to Ms Macken following the liability hearing for back pay in relation to fixed pay, bonus pay and pension contributions that the tribunal determined she was entitled to by reference to her male comparator, for which credit was given.

The tribunal awarded loss of earnings until retirement, accepting medical evidence that she would be unable to work again, estimating that she would have remained in employment until the age of 65. In addition, the tribunal made awards for equal pay, personal injury, future losses, injury, loss of congenial employment, an Acas uplift,  and interest.

At the remedies hearing, the tribunal found that the managers had behaved "spitefully and vindictively". The judge commented that, morally, the bank should apologise to Ms Macken. However, she decided not to order the bank to make an apology, noting that in order for an apology to be effective it must be "genuine and heartfelt". Instead, the bank's failure to apologise in a meaningful way was taken into account in the order of £35,000 injury to feelings, which is in the upper band of such payments, and £15,000 aggravated damages.

Tribunal awards do not tend to be this high, it is particularly rare that loss of earnings until retirement are awarded. In this case, Ms Macken was a high earner compared with national averages, although not unusually high for the financial services industry.

How could this have been avoided?

The hiring manager who considered the claimant "light" and "junior" had previously interviewed 12 women and the claimant was the first woman he hired. His comments about her were in stark contrast to the comments made about the male comparator, with little objective evidence to back up his opinions. On the facts we have, this manager would have benefitted from unconscious bias training or more HR input on his hiring and pay decisions.

The witch's hat incident was completely unacceptable. Drinking was also involved . If this incident had been in time, or part of a continuing act, it would have  been considered harassment: it was obviously related to gender. The incident took place in 2013. If it had happened in 2016 or later, it would almost certainly have amounted to a conduct rules breach for the purposes of the Financial Conduct Authority on the part of the male perpetrators. Although there has been the roll out of the senior managers and certification regime, this case is a reminder that training on conduct rules and acceptable professional behaviour are useful tools to ensure high standards of conduct . 

It is the reality that job descriptions often don't reflect the full extent of all employees' roles, and it would be an impossible task to have fully up-to-date job descriptions for all employees. However, the bank ended up in an incredibly difficult position in asking the tribunal to discount the only documentary evidence available dealing with what Ms Macken's and C1's roles were. Ms Macken was asking questions about equal pay in relation to C1 from 2014. If the bank's position was that the job descriptions were wrong from that time, much more should have been done to set that right.

The tribunal rejected that it should simply be accepted that banks have opaque pay structures. The tribunal's view was that the bank must accept that having secretive practices around pay increased the risk of discrimination, and, if they chose to maintain these practices, they put themselves at risk.

There was significant criticism from the tribunal that Ms Macken's concerns were not adequately investigated. HR simply accepted the managers' positions and did not challenge them nor seek objective evidence. With the benefit of hindsight, HR should have undertaken a full objective assessment of the roles and the pay disparity, and, if they had done so and rectified the pay disparity at an early stage, this matter could possibly have been resolved. It is particularly surprising that Ms Macken's complaints were not taken seriously by HR in the light of the notorious witch's hat allegations. This should have been a red flag to HR that gender could be a factor in this particular team. 

Osborne Clarke comment 

HR has a key role in protecting the business, what this case makes clear is that HR does this best by ensuring that obligations are complied with and processes are applied properly, not by seeking to simply shut down employees' valid concerns.

This case is now a public record. The lurid  details coupled with high compensation has led to wide reporting of the case. While the more attention grabbing allegations weren't actually central to the findings, that doesn't get in the way of a good headline. The managers involved came in for serious criticism, in the remedy hearing the tribunal went as far as criticising the bank for not subjecting one of the managers to disciplinary action. This is potentially career damaging for the managers, whose names have also been widely reported. Therefore, if HR is dealing with allegations that may pique the interest of the national press , even if confident those allegations are unfounded, it may be a factor in the internal discussions around settlement.
 

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