BBC, LLPs and Beyond: Equal pay claims and knowing the right questions to ask
The BBC published its pay information last week for its top earners and the results have revealed a significant gender pay gap amongst a large number of the most highly paid presenters and actors.
The highest paid seven BBC stars are all male, with Chris Evans topping the list on an annual pay of £2.2-£2.5 million. Claudia Winkleman – the highest paid female star on the list, comes in at number eight, with an annual pay of £450,000-£499,999. The list covered only those paid more than £100,000 per year, and there were some notable female stars missing from the list, whilst their male counterparts made the list, seemingly earning more for doing what appears to be the same or similar job.
A few days ago many female BBC stars published an open letter to the BBC’s Director-General, Tony Hall demanding that more is done to close the gender pay gap in the organisation. Whilst it is the pay of those in the public eye which has been published, the letter highlights that the pay gap runs through the whole organisation, from presenters, to production, engineering and support services. All this has the makings not just of a public backlash against the BBC but also, if not resolved, the BBC may find itself facing potential legal claims for equal pay and sex discrimination by female presenters and other employees.
What legal action is available?
Equal pay legislation was introduced in the UK by the Equal Pay Act 1970. It was retained in the Equality Act 2010. To succeed in an equal pay claim a worker must demonstrate that they are paid less than a worker of the opposite sex who is performing the same or similar role. The provisions likely extend to LLP members, who can also bring equal pay claims. There are various criteria which can be used to establish an equal pay claim.
The issue for the BBC – equal work?
It seems likely that a female news reader could establish that a male news reader is doing like work: the jobs are the same, if not at least broadly similar. Even where the programmes are scheduled at different times of day, or on different channels, while that might affect ratings and popularity, it is difficult to see how that would make the job itself harder, more complicated or require different skills and knowledge.
It may be more complicated when comparing say, an actor on one programme with a foreign news reporter on the other. This work is not similar; the actor might be filming in London, on a regular 9-5 schedule and the reporter might be working in a dangerous environment, on an irregular and unsociable schedule and living away from home. In this case, questions of whether the roles involve similar effort, skill and decision-making will come into play. Whilst they might involve similar effort, it is likely to be hard to conclude that they involve similar skills and decision-making abilities and therefore these jobs are probably not equal work.
Can this inequality be justified?
If an employee can get over the first hurdle of establishing that there is a higher paid male star carrying out equal work to them, the BBC can try to demonstrate that it has a material factor defence which justifies the disparity.
This may apply where the employer can show that the variation in pay is due to a material factor which, in itself, is not discriminatory. The reason the employer puts forward must be genuine and show a “significant and relevant” difference in circumstances between the employee and their comparator. However, where the factor on which the employer relies as a defence is either discriminatory, or tainted by sex, their attempt to defend the inequality in pay will likely fail. Wherever there has been subjective judgment involved, employers should be cautious that conscious or unconscious bias has not crept into their decision-making, thereby making it potentially discriminatory.
One example of a potentially successful defence might be that employees employed to do a job in London get paid more than those doing the same job in Manchester – the difference in location, and living costs, is likely to be a potential defence to an equal pay claim. Other examples might be less clear, such as where past performance of the employee is used to justify a higher salary: whilst that can be a defence, an employer would need to be careful that the assessment of performance was fair, would stand up to scrutiny and was not discriminatory. Where performance might have been affected by periods of sickness or maternity leave, employers must be careful when using this as a defence.
Potential defences for the BBC?
The reported difference in pay between male and female presenters seems, on the face of it, to be potentially discriminatory and unfair. If proceedings follow, the BBC would need to establish a genuine and material factor which justifies the difference. The presenters may have been assessed differently in their performance reviews, which could be a justification, and where one is based at the BBC in Manchester, and one at Broadcasting House in London, that might be relevant too. However, where both are in the same location, and both are performing well and getting positive reviews and viewing figures the BBC may have an uphill struggle to justify its gender pay gap.
What about market forces? An employer cannot justify a pay difference because a man refused to work for a salary that the woman accepted, however, market forces are a potentially valid defence. It has been found to be a valid defence to an equal pay claim that some employees were given pay rises to prevent them being poached by competitors and such an argument is likely to be relevant to BBC pay. For example, if the BBC do not pay a senior male presenter as much for his radio show, might another broadcaster poach him losing the BBC ratings which would have a negative commercial impact on the BBC? Does the BBC increase the pay of stars, as ratings go up? Is that justifiable? Provided pay increases are made for sound business reasons, unrelated to sex, it is possible an argument may amount to a defence for the BBC but one would have to analyse the reason for the ratings – is it because the BBC gave that presenter a prime time slot or is it down to that presenter’s own skills and expertise?
Sex discrimination when appointing presenters?
Whilst the BBC might argue that certain male stars get paid the most, because they present the most popular tv and radio programmes on the most popular channels or stations, that does not appear to cut it for an equal pay defence. Do the number of listeners change the skills, experience and effort required of a job? Unlikely. Even if the BBC could mount some argument around a genuine material difference, there would be another challenge: why was the slot not given to a female presenter and, was the appointment itself discriminatory?
Looking at the prime time presenters on news, other programmes and radio, how many are female? They are certainly in the minority and therefore questions have to be asked not just about why the BBC is paying its male stars more than its female stars but also why it is giving its male stars the prime time opportunities which come hand in hand with the big salaries?
Some more forensic analysis needs to take place before anyone can say the female presenters have the key ingredients of successful equal pay claims. The list does not break down earnings from each show or assignment and it is possible that some high earners are paid more because they have appeared on more shows, more frequently and also worked on one-off specials. The list is misleading because it does not include earnings from other productions, which are not paid by the BBC – for example the figures do not include the earnings of leading male stars generated from their own production companies which make their BBC shows. For an equal pay claim to get off the starting blocks, more detailed information will be needed about exactly what the pay is for.
What should an employee or LLP member do if they believe they might have an equal pay issue?
Equal pay claims can be brought in both the employment tribunal or the court. The employment tribunal has some advantages, namely being lower cost and also being well equipped to deal with these claims, which can be technical in terms of procedure and content.
However there are other alternative steps to consider before bringing a claim including lodging a grievance with the employer to try to address the issue in a more amicable way. An employee can also submit questions to their employer to help them assess whether they might have a claim and to help choose the legal basis for any claim. The Government body, ACAS, provides guidance on a question and answer process which might be helpful for some employees thinking of challenging their employer on equal pay.
If the matter cannot be resolved internally an employee has 6 months to bring an equal pay claim in the employment tribunal (longer in the courts), and 3 months to bring a sex discrimination claim. The date from which these time limits run can be difficult to determine so expert advice should be sought as soon as possible in the event someone thinks they may have a claim (but broadly speaking it runs from the termination of the contract of employment which can include a transfer of employment or a substantial change in terms). An employee will also have to complete a process of ACAS Early Conciliation, before being in a position to bring a claim in the employment tribunal (but not in the courts).
The equal pay claims which usually hit the headlines are those involving large number of claimants who are presenting a class action to the tribunal, but individuals, and smaller groups, can also pursue these claims. A large number of claimants does not necessarily mean better prospects but strength in numbers can make it easier for a woman, for example, to raise issues of pay with her employer particularly where she fears a backlash by raising these issues with the very people who determine her pay and career prospects. The more people who raise the issue, the harder it is for the employer to ignore it, and to treat the employees poorly in response. With that in mind, it is easy to see why the female BBC stars joined together to write their letter to the Director-General.
What are the potential remedies?
The tribunal or court can require the employer to pay arrears of pay to a successful claimant or damages. Generally the arrears can go back up to six years in England, and five years in Scotland, before the day the claim was brought. The court or tribunal can also require the employer to pay the employee at a level equal to their comparator going forward and insist that the employer conducts a pay audit and publishes the results.
What lies ahead?
Equal pay and sex discrimination claims can be lengthy, complicated and publically damaging so even if successful in a defence, the BBC would be unlikely to come out unscathed.
What is clear from the newly published data is that the BBC has some way to go to reduce its gender pay gap and potentially any discriminatory methods and unconscious bias in the way it appoints and rewards its stars. Publication of data is a positive first step to a more balanced pay structure. It will often act as a trigger for change, whether due to pressure from, or legal action by, employees, or negative publicity. The result will hopefully be a more transparent and fair pay structure throughout the whole corporation, in every department, and not just at the top.
With the gender pay reporting obligations now requiring all employers with over 250 employees to publish gender pay data, there is likely to be a wider ongoing review and adjustment to female pay.
A notable gap in the reporting obligations exists in relation to Limited Liability Partnerships; LLP members in the legal, accounting, architectural and other professional practices sectors are specifically excluded from the gender pay reporting obligations, leaving a significant omission in sectors where female partners have typically struggled to achieve pay equity from opaque profit share systems. Even with that significant exclusion, it is likely though that the light that is being cast on female pay issues at the BBC, and in financial services too, is likely to lead female partners to raise these issues themselves in their own firms, individually and collectively, to ensure that their firm’s pay systems are more transparent and to ensure they are being treated fairly and equally in their profit share allocations compared to their male partners.
For further information on equal pay and discrimination issues in the workplace, including media, professional and financial services sectors, please contact Sarah Chilton to discuss in confidence.
Sarah Chilton is a partner at CM Murray LLP advising Senior Executives, Employers, LLP members, and Professional Services Firms on employment law and discrimination in the workplace.
Follow her on Twitter @sarahjchilton