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Bankers' Bonuses

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The Employment Appeal Tribunal has handed down its decision in Barton v Investec, upholding Louise Barton's appeal from her unsuccessful employment tribunal case where she claimed the secretive culture of awarding bonuses in city institutions was discriminatory on grounds of sex and/or a breach of the Equal Pay Act 1970..

It is authority for the proposition that city institutions operating secret bonus systems are at significant risk of losing equal pay or discrimination claims. The EAT stated:

"30. ...This Court would certainly wish to make it clear that no Tribunal should be seen to condone a City bonus culture involving secrecy and/or lack of transparency because of the potentially large amounts involved, as a reason for avoiding equal pay obligations."

The decision sets out guidelines for inferring discrimination, pursuant to the new s63A of the Sex Discrimination Act 1975 which was inserted into the Act in 2001 (see bulletin dated 30th July 2001). The decision states, at = para. 25,:

"25. We therefore consider it necessary to set out fresh guidance in the light of the statutory changes:

(1) Pursuant to section 63A of the Sex Discrimination Act 1975, it is for the Applicant who complains of sex discrimination to prove on the balance of probabilities facts from which the Tribunal could conclude, in the absence of an adequate explanation, that the Respondents have committed an act of discrimination against the Applicant which is unlawful by virtue of Part 2 or which by virtue of section 41 or 42 SDA is to be treated as having beencommitted against the Applicant. These are referred to below as E2809Cs uch factsE2809D

(2) If the Applicant does not prove such facts he or she will fail.

(3) It is important to bear in mind in deciding whether the Applicant has p= roved such facts that it is unusual to find direct evidence of sex discrimination. Few employers would be prepared to admit such discrimination, even to themselves. In some cases the discrimination will not be an intention but merely based on the assumption that E2809Che or she would not have fitted inE2809D.

(4) In deciding whether the Applicant has proved such facts, it is important to remember that the outcome at this stage of the analysis by the Tribunal will therefore usually depend on what inferences it is proper to draw from the primary facts found by the Tribunal.

(5) It is important to note the word is E2809CcouldE2809D. At this stage the Tribunal does not have to reach a definitive determination that such facts would lead it to the conclusion that there was an act of unlawful discrimination. At this stage a Tribunal is looking at the primary facts p roved by the Applicant to see what inferences of secondary fact could be drawn from them.

(6) These inferences can include, in appropriate cases, any inferences that it is just and equitable to draw in accordance with section 74(2)(b) of the Disability Discrimination Act [note from DB: presumably this should read Sex Discrimination Act] from an evasive or equivocal reply to a questionnaire or any other questions that fall within section 74(2) of the Sex Discrimination Act see Hinks -v- Riva Systems EAT/501/96.

(7) Likewise, the Tribunal must decide whether any provision of any relevant code of practice is relevant and if so, take it into account in determining such facts pursuant to section 56A(10) SDA. This means that inferences may also be drawn from any failure to comply with any relevant code of practice.

(8) Where the applicant has proved facts from which inferences could be drawn that the Respondents have treated the Applicant less favourably on the grounds of sex, then the burden of proof moves to the respondent.

(9) It is then for the respondent to prove that he did not commit, or as the case may be, is not to be treated as having committed that act.

(10) To discharge that burden it is necessary for the respondent to prove, on the balance of probabilities, that the treatment was in no sense whatsoever on the grounds of sex, since E2809Cno discrimination whatsoeverE2809D is compatible with the Burden of Proof Directive.

(11) That requires a Tribunal to assess not merely whether the respondent has proved an explanation for the facts from which such inferences can be drawn, but further that it is adequate to discharge the burden of proof on the balance of probabilities that sex was not any part of the reasons for the treatment in question.

(12) Since the facts necessary to prove an explanation would normally be in the possession of the respondent, a Tribunal would normally expect cogent evidence to discharge that burden of proof. In particular the Tribunal will need to examine carefully explanations for failure to deal with the quest ionnaire procedure and/or code of practice.

The end result of the appeal was that the tribunal's decision was quashed a= nd the case was remitted for rehearing in front of a fresh tribunal.