Veitch Penny LLP - Exeter | Crediton, Devon

Case

Barton v Investec Henderson Crosthwaite Securities Ltd. Employment Appeal Tribunal - (3 April 2003)

Issues

(1) Sex Discrimination
(2) Equal pay
(3) Section 63 Sex Discrimination Act 1975

Facts

Louise Barton, a Fund Manager, alleged that she had been discriminated against in her employment with respect to her salary and benefits. Ms Barton made a complaint to the Employment Tribunal based upon sex discrimination and equal pay. In her claim she referred to a male colleague as a comparator who had been headhunted by a number of organisations. In response to this, Investec had increased the comparator's basic wage and Long Term Investment Plan (LTIP). The comparator was also awarded more share options and bonuses.

The Employment Tribunal found that Investec had genuine reasons for the difference between the Applicant position and that of the comparator. The Tribunal also found that the grant of share options was due to a material factor other than sex and therefore the issue of equal pay did not arise.

The Applicant appealed to the Employment Appeal Tribunal. It was asked to consider:

(a) The burden of proof in Sex Discrimination cases following the insertion of Section 63A into the Sex Discrimination Act 1975;

(b) The proper approach to be taken following a failure to comply with the questionnaire procedure and/or the Equal Opportunities Commission Code of Practice; and

(c) Whether the Tribunal should condone the opaque pay structures in City of London Financial Institutions.

Decision

The Appeal Tribunal made the following ruling:

Section 63A of the 1975 Act had introduced a new approach to be taken in sex discrimination cases. It was now for the Applicant to prove facts from which the Tribunal could conclude, in the absence of an adequate explanation, that the Respondents had committed an action of discrimination contrary to the Act. The Appeal Tribunal laid down the following guidance:

(a) In deciding whether the Applicant had proved such facts, it should be remembered that it would be unusual to find evidence of sex discrimination. Therefore the outcome at this stage depended on what inferences it was proper for the Tribunal to draw from the primary facts. However, if the Applicant did not prove such facts then they would fail.
(b) The Tribunal did not have to reach a definitive conclusion that such facts would lead to the conclusion that there was an act of discrimination. It was merely considering the primary facts to determine what inferences of secondary fact could be drawn.
(c) Those inferences could include any that were just and equitable to draw in line with the Disability Discrimination Act 1995 from an evasive or equivocal reply to a questionnaire etc.
(d) The Tribunal had to decide whether an Employer's compliance with any relevant code of practice was relevant and if so to take that into account.
(e) When the Applicant has proved such facts, the burden of proof shifts to the Respondent.
(f) In order to discharge the burden of proof, the Respondent would have to prove that the treatment was in no way on the grounds of sex. As the employer would normally be expected to be in possession of such facts, the Tribunal ought to expect cogent evidence to discharge the burden of proof.

Comments

The Equal Pay appeal was allowed and the case remitted to the Employment Tribunal.

In this case, Ms Barton did produce sufficient evidence of sex discrimination to transfer the burden of proof to Investec. It was found that the original Tribunal had not followed the correct process and accordingly, the matter should be admitted to a fresh Tribunal. With regard to the claim for equal pay, the Appeal Tribunal held that the original Tribunal had been incorrect in failing to take into account the Respondent's reluctance to answer Ms Barton's Equal Pay Questionnaire. It also failed to look at whether there are objective reasons for the difference in share options, the issue of proportionality and also whether there was a real business need for the difference. Given that this case concerned transparency, these were major defects.