Top notch growth for BDBF

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Employment Law News

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Top notch growth for BDBF

Leading specialist employment law firm, BDBF, adds three further employment lawyer hires bringing their headcount to 6 partners and 10 associates.

Amanda Steadman, finalist in the Knowledge Lawyer of the Year at the LexisNexis Legal Awards 2018, joins BDBF as its Knowledge Lawyer. This is a real landmark for BDBF as it continues to grow both its market-leading practice acting for senior executives and partners and its service for employers seeking to avoid and defend employment disputes.

Hannah Lynn and Melvyna Mumunie join as newly qualified lawyers. Hannah joins from Scottish niche employment firm, Law at Work in Scotland and Melvyna from Bates Wells Braithwaite.

Gareth Brahams, managing partner, said “We are delighted to bring on board three such talented lawyers as we continue to cement our position as the “go-to” firm both for senior executives and partners, and employment advice and defence of disputes for employers.”

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Fathers at Work – Understanding Paternity Leave

Employment Law News

Fathers at Work – Understanding Paternity Leave

The number of men taking time off work when their baby is born is falling. Despite the government’s attempts to encourage fathers to increase the time they spend caring for their children, it seems many men do not take advantage of their statutory right to paternity leave.

There are several reasons proposed for the falling numbers:

Small business owners, who lack a dedicated HR resource, may not understand employees’ statutory paternal rights. In addition, many employees are unaware of their paternity leave rights and therefore fail to ask their employer for time off.
Paternity leave is only available to employees.The increase in gig economy workers has meant many men are now self-employed, thus not entitled to paternity leave.
Many men simply cannot afford to take paternity leave. In the absence of any top-up from an employer, paternity leave is paid at a flat rate of £148.68 per week or 90% of your average weekly earnings, whichever is less^[1]. Not every family can withstand this level of income drop for two weeks.
Employees may also worry about being perceived as uncommitted to their job if they take two weeks leave when their baby is born.This is especially pertinent if the employee is in line for a promotion or partnership.

In this article, we will give an overview of paternity leave rights and the benefits to the father and baby if it is taken in full.

What is paternity leave?

Since 6 April 2003, eligible employees have been entitled to take either one whole week or two consecutive weeks’ ordinary paternity leave (OPL) within 56 days of a child’s birth or placement for adoption.

How is OPL different to Shared Parental Leave?

On 5 April 2015, a new system of shared parental leave (SPL) was introduced by the Children and Families Act 2014 which effectively allows parents to share the statutory maternity or adoption leave and pay that was previously only available only to one parent.

Although OPL is not available if the employee has taken any shared parental leave (SPL), in practice, most fathers take OPL at the same time as the mother is on compulsory maternity leave (two weeks from the day of the birth). If the option of SPL is taken up, one parent will move onto SPL after two weeks.

What are the eligibility criteria for OPL?

To be eligible for OPL, an employee must show they:

Have been with their employer at least 26 weeks (counted from the 15^thweek before the baby is due). In the case of adoption, an employee must have been continuously employed by their employer for at least 26 weeks by the “matching week”.
Are either the father, the husband or partner of the mother (this includes same-sex), the child’s adopter, or in the case of surrogacy, the child’s intended parent.
Have given their employer notice of the intention to take paternity leave in or before the 15^thweek in which the baby is due.
Have not have already taken shared parental leave in respect of the same child.

Is an employee protected from dismissal or discrimination if he takes paternity leave?

An employee has the right not to be subjected to any detrimental treatment by their employer for a prescribed reason related to paternity leave.

If an employee is dismissed because of or for reasons relating to his decision to take OPL, that dismissal is deemed automatically unfair. This means the employer will be deemed to have unfairly dismissed the employee unless it can prove that the reason for dismissal was not the exercise of paternity leave rights.

What are the benefits of paternity leave?

Studies show that fathers who take their full two weeks’ paternity leave are more likely to be involved with childcare duties such as feeding, bathing, and playing with their baby long after the leave has ended.

Furthermore, research by the University of Oslo found that children whose fathers had taken paternity leave had improved performance at secondary school. However, it must be acknowledged that like all studies which measure how an external factor affects a child’s school performance, it is impossible to separate the impact of genes and income. Wealthier fathers are more likely to take paternity leave as they have the means and skills to demand higher paternity leave payments. The achievement gap between children of different economic backgrounds is well-established. This aside, there is evidence to show that the more a father is involved with their children, the greater their academic outcome.

Finally, if a father takes paternity leave, and during that time gains confidence in caring for his child, the mother’s parental burden may be lessened, making it easier for her to return to work.

The experience of fathers at work

Research conducted by Deloitte in conjunction with Daddilife– a parenting website for working fathers found that of 2000 fathers surveyed, 63% had requested a change in working pattern since becoming a father and a third of fathers had changed jobs to achieve an optimal work/personal life balance. For employers, flexible working, therefore, presents as a retention opportunity for men and women. In terms of mental health many suggested that it had been affected by balancing work and parental responsibilities and had created tension with their employers and partners.

If you have experienced detrimental treatment or have been dismissed because of or on grounds related to paternity leave, contact an employment solicitor.

If you have any questions regarding employment law matters, please do not hesitate to call us on 020 3828 0350.

BDBF is a specialist employment law firm in the financial, insurance, professional and technology sectors.

[1]Accurate at the time of writing – September 2019

The menopause taboo: employers who ignore their responsibilities risk claims

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Employment Law News

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The menopause taboo: employers who ignore their responsibilities risk claims

Recent UK media headlines have focused on pioneering private medical treatment being offered to women to postpone the menopause by removing a piece of their ovary by keyhole surgery, freezing it and then regrafting it when a woman’s natural menopause arises. The procedure could cost between £7-£11,000 and is being offered to women under the age of 40. What about those women that cannot afford this cost, or those over the age of 40?

Kate* an analyst in the City, sometimes felt she was losing her mind. She had always been smart and tenacious, earning a first-class honours degree in economics, after which she went to work in the specialist area of complex international investment funds. However, now in her early 50s, she worried that her intelligence, reason, and her body were working against her almost every day.

Like many women, Kate battles with peri-menopause. She suffers from insomnia, muscle aches, night sweats, hot flushes, and mood swings. But it is the brain fog that gets her most, wreaking havoc on her professional confidence. She has gone from being at the top of her game, to struggling to get through each day, and sometimes feeling completely incompetent in her role.

But she tells no one. Because she knows that in her male-dominated profession, menopause is often at best misunderstood, and at worst, seen as a sign of a woman being “well past her prime”.

There are around 4.3 million women aged 50 and over in employment in the UK (ONS 2015) and the biggest increase in employment rates over the last 30 years has been for women aged 55-59 (from 49% to 69%). According to figures quoted during a World Menopause day Debate in the UK House of Commons in 2018 about 50% of working women say menopausal symptoms make it difficult to do their jobs, and 10% give up work altogether as a result.

So why is menopause still seen as a taboo topic?

In the recent House of Commons debate, the Minister for Women, Victoria Atkins, stated that it is in employers’ interests to ensure that they have policies that adapt to the growing number of women who are experiencing peri-menopausal and menopausal symptoms at work. Her comments echo a July 2017 report by the Government Equalities Office, titled ‘The effects of menopause transition on women’s economic participation in the UK’ which calls for the introduction of new measures to better accommodate working women dealing with the condition.

However, in order to support menopausal women, we first need to understand what perimenopause and menopause actually is.

What is menopause?

The menopause occurs when a woman stops having periods and is no longer able to become pregnant naturally. The average age of natural menopause is 51, and the symptoms of menopause can begin several years earlier (referred to as ‘perimenopause’); as such, many female workers experience menopause ‘transition’ during their working lives.

Menopause transition involves a wide range of physical and psychological transition symptoms; there is no uniform experience, but symptoms (which usually last around four years though can be longer) can include hot flushes, night sweats, insomnia, depression, anxiety, and decreased memory and concentration. While some women have very few symptoms, many may benefit from workplace support to help lessen the impact on their professional life.

Not only can transition symptoms impact a woman’s ability to carry out her role effectively, but they can have detrimental effects on her career, including needing to work reduced hours, leaving work altogether (whether resignation or dismissal), and/or an ongoing fear of being targeted for redundancy. The Government’s July 2017 report confirmed there is an emerging pattern in society whereby those experiencing menopause transition feel those around them (within the workplace) are unsympathetic or treat them badly because of “gendered-ageism”.

With the array of potential career-damaging possibilities, as well as the stigma often attached to menopausal women, it is little wonder that many of those women going through the transition period report feeling embarrassed and/or unwilling to discuss their symptoms with their employers, and feel that they have no option but to cope alone. This is often exacerbated by employers who either don’t understand the symptoms of menopause, or how best to support menopausal women (often feeling reluctant to broach the subject), or do not want to take responsibility for supporting menopausal women in their workforce.

The legal position on menopause

Employers have a duty to protect the health and wellbeing of their workforces and not to act in a way which seriously undermines the implied duty of trust and confidence. Further, discrimination on the grounds of age, sex, or disability (which are protected characteristics) is prohibited under the Equality Act 2010. Claims for discrimination have potentially unlimited compensation.

Direct discrimination is deemed to have occurred when a worker is subject to less favourable treatment (including dismissal) because of a protected characteristic. Indirect discrimination, on the other hand, can occur if a policy is applied to everyone but has the effect of putting those with a protected characteristic at a specific disadvantage.

Discrimination can also take the form of harassment and/or victimisation and, in the case of disability discrimination, can arise if the worker is treated less favourably because of something arising as a consequence of their disability, or a failure to make reasonable adjustments to accommodate it.

There is limited case law surrounding menopause transition in the UK, but those non-binding cases which do consider the issue have provided useful insights into the types of potential claims which can be successfully pursued at a tribunal.

Unfair dismissal and direct sex discrimination

The first case isMerchant vs British Telecoms Plc in which the tribunal agreed that Ms Merchant had been unfairly dismissed and direct sex discrimination had occurred when she was dismissed for poor performance.

In this case, Ms Merchant had been subject to underperformance procedures for a few years, culminating in a final warning. The performance issues persisted so a further performance process was commenced. During a meeting to discuss the performance issues, Ms Merchant provided her manager with a letter from her doctor explaining that she was going through the menopause and that this was affecting her ability to concentrate. She also referred to her menopause on several occasions during the meeting.

The manager, however, chose not to carry out any further investigation of her medical condition, in breach of the company’s performance management policy. Instead, he made a judgment on Ms Merchant’s health and the impact on her ability to carry out her role by comparing it to what he knew of the menopause experiences of his wife and HR adviser, despite all women experiencing the menopause differently.

The tribunal held that the manager would never have adopted this “bizarre and irrational approach with other non-female-related conditions“. A man with ill-health experiencing similar under-performance concerns would not have been treated in the same way and, consequently, the failure to refer Ms Merchant for medical investigation before making the decision to dismiss was directly discriminatory on the grounds of sex.

Disability related discrimination

The second case, Davies v Scottish Courts and Tribunals Service, found that Ms Davies had been unfairly dismissed and that her dismissal was because of something arising in consequence of her disability.

Under the Equality Act 2010, in order for menopause to be considered a disability, it must have a substantial and long-term adverse effect on the individual’s ability to carry out day-to-day activities. It, therefore, should not be assumed that all women going through the menopause will be protected; each case must be determined on its own facts.

In this case, however, Ms Davies suffered from heavy bleeding (requiring her to be near a bathroom to change her sanitary towel every 30 minutes), severe anaemia, memory loss and a “fuzzy” feeling. Her employer recognised her disability and made reasonable adjustments for her.

In February 2017, Ms Davies began taking a medication which needed to be dissolved in water. On the day in question, she was working in court and, upon returning from the lavatory, was concerned to note that her jug of water was being drunk by two members of the public. She could not remember whether she had dissolved her medication in the water and so informed the two men that her medication had been dissolved in it.

Despite her condition making her flustered and forgetful, and her 20 years of unblemished service, Ms Davies was subsequently dismissed for gross misconduct on the grounds that she had knowingly misled the two men and management (she should have known the water would turn pink once the medication was in it), and that she had brought the court into disrepute.

In addition to being unfairly dismissed, the tribunal held that there was a clear link between Ms Davies’ dismissal and her conduct and that her conduct was affected by her disability. Whilst the tribunal accepted that the justification of having an honest and trustworthy staff member could be a legitimate aim, they could not accept that dismissal of Ms Davies was a proportionate means of achieving it.

Although not yet tested at tribunal, it is possible that claims for age discrimination may also be successful, on the basis that the menopause usually affects women of a certain age.

How to support female employees with peri-menopause and menopause

Failure to support women suffering from menopause can lead to Employment Tribunal claims. These types of cases may increase as women become more confident about speaking out about their symptoms and subsequent negative treatment

The British Menopause Society (BMS) has issued guidance on how employers can support female staff through menopause. Steps include:

Raise awareness of menopause and its symptoms, especially in relation to line managers who are responsible for the health and wellbeing of their team.
Set out guidance for line managers on how to conduct conversations around menopause with employees. It is especially important to realise that what works for one person may not be the right approach for another, as this is a highly sensitive matter for many suffers.
Health and safety handbooks and policies should be updated to include information regarding menopause.
Implement support mechanisms within the workplace. This could be a named person in HR or just the occupational health team; each organisation will be different. You may even have a named ‘menopause champion’. The contact details for the support available should be made clear within the guidance.

In summary

The issue of menopause needs to come out of the shadows. Given women’s increased life expectancy and the fact of working longer, it is imperative that workplaces change and adapt to support women during what may be a challenging time in their lives. Not doing so raises the risk of claims and reputational damage to employers.

*Names have been changed.

If you have any questions regarding employment law matters, please do not hesitate to call us on 020 3828 0350.

BDBF is a leading and specialist employment law firm in the City of London.

DIRECT DISCRIMINATION DUE TO “PERCEIVED” DISABILITY OF POLICE OFFICER

Employment Law News

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DIRECT DISCRIMINATION DUE TO “PERCEIVED” DISABILITY OF POLICE OFFICER

The Claimant, Mrs Coffey, applied to the Wiltshire Constabulary to become a police constable. However, a medical examination revealed that she suffered from some hearing loss. Following Home Office guidance, the Wiltshire Constabulary arranged for a practical functionality test, which she passed. This enabled Mrs Coffey to work as a constable (without any adjustments).

Mrs Coffey later applied to transfer to the Norfolk Constabulary, disclosing her hearing loss and providing a copy of the report from the functionality test and advised that no adjustments to her role had been necessary. She underwent a first medical, which recommended an “at work” test. Rather than provide this, the constabulary obtained a further medical opinion. The advice stated that Mrs Coffey would pass a practical test and a further ENT specialist reported that her hearing levels were stable. Despite this, the Acting Chief Inspector (ACI) rejected the application on the grounds that she did not meet the National Standards on hearing.

The Court of Appeal held that for claims of perceived disability discrimination, the alleged discriminator must believe that all elements in the statutory definition of disability were present although they did not have to attach the label “disability” to them. That was the case here even though in fact the employee was not disabled.

The Court concluded that the ACI had wrongly acted on the basis of a stereotypical assumption that Mrs Coffey’s hearing loss would render her incapable of performing front-line duties.

Chief Constable of Norfolk v Coffey [2019] EWCA Civ 1061

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NHS Trust did not discriminate when removing Christian NED for speaking out against homosexuality and same-sex couple adoption

Employment Law News

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RELIGION vs SEXUAL ORIENTATION

NHS Trust did not discriminate when removing Christian NED for speaking out against homosexuality and same-sex couple adoption

Mr Page, a practising Christian, was a non-executive director of an NHS Trust and a lay magistrate sitting in criminal and family courts. He participated in decisions involving adoptions.

In July 2014, Mr Page was part of a panel of Magistrates hearing a same-sex couple adoption application about a young child and he expressed his view to his fellow magistrates that it was his belief that it is always in the best interests of a child to be brought up by a mother and father, and that it was “not normal” to be adopted by a single parent or same-sex couple. His fellow Magistrates complained and Mr Page was subjected to disciplinary action. He subsequently gave an interview to the Mail on Sunday and took part in a radio phone-in.

Mr Page did not inform the Trust about the above. However, the Trust found out about his interviews after receiving a complaint and warned Mr Page that the public expression of his views could undermine confidence that he would exercise his judgment impartially and instructed him to inform it first of any further media interest.

Despite this, Mr Page decided to continue to give interviews to various media outlets, including on the BBC Breakfast News. As a result, he was removed from his magistracy in early 2016. However, Mr Page continued to participate in further media interviews live on ITV News and Good Morning Britain. He stated that homosexual activity was wrong and that he didn’t agree with same sex marriage. Mr Page was subsequently suspended by the Trust, which thereafter did not renew the term of his office as a NED.

Mr Page claimed direct and indirect discrimination against the Trust and argued that he had been removed from office because of his religious beliefs.

The Employment Appeal Tribunal dismissed the claim. It had been made clear that there were findings of non-discriminatory reasons for the treatment alleged. In any event, a suitable comparator would have been one who, for reasons unrelated to religious belief, spoke to the media against the Trust’s instructions and whose remarks would have been likely to have a negative effect on the Trust’s ability to serve the community in its catchment area. There was little doubt that such a comparator would have been treated in exactly the same way as Mr Page.

This case illustrates that the tension between religion and sexual orientation in discrimination claims continues. However, ultimately, Mr Page was not dismissed because he held the views that he held; it was the fact that he repeatedly contacted the media having been told repeatedly that he should not.

Page v NHS Trust Development Authority [2019] UKEAT/0183/18

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A SIXTH ANNIVERSARY MESSAGE FROM GARETH BRAHAMS, MANAGING PARTNER OF BDBF

[/et_pb_text][/et_pb_column][et_pb_column type=”1_3″ _builder_version=”3.0.47″ parallax=”off” parallax_method=”on”][et_pb_post_title title=”off” meta=”off” _builder_version=”3.0.99″][/et_pb_post_title][/et_pb_column][/et_pb_row][/et_pb_section][et_pb_section fb_built=”1″ admin_label=”section” _builder_version=”3.0.47″][et_pb_row admin_label=”row” _builder_version=”3.0.47″ background_size=”initial” background_position=”top_left” background_repeat=”repeat”][et_pb_column type=”3_4″ _builder_version=”3.0.47″ parallax=”off” parallax_method=”on”][et_pb_text _builder_version=”3.12.2″ use_border_color=”off”]Today marks the sixth anniversary since we opened the doors of BDBF.

We started with the four name partners, one other qualified lawyer and a practice manager, all of whom are still in the business.

As of today, we have seven lawyers as partners and seven associates as well as our fantastic practice team.

We have retained our position in the top tier for acting for senior executives in Chambers & Partners legal directory for the fourth year running cited as a ‘renowned boutique employment law firm’ acting for senior executives.

The Legal 500 likewise has once again ranked us as top tier for our senior executive practice and ranked us also for our work for employers.

We have also achieved a listing as one of the The Times Best Law Firms in 2019 (nationally) as rated by our peers.

Today is also a momentous day because Emma Sell, our practice manager, who was with us before we even opened our doors becomes our first non-lawyer partner.

Emma has run our facilities and practice team since before day 1 and we simply would not be where we are without her.

I cannot tell you how proud we are of what we have achieved and how humbled we are by the support we have had from you to get here.

We look forward to working with you and reaching even greater heights over the next six years.

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Employment Law News

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We are delighted to announce that BDBF is one of The Times newspaper’s ‘Best Law Firms 2019’ in England and Wales. The list is peer selected and is based on a simple question: other than your own firm; which practice would you instruct in a specific area of work?

The Times states:

Founded in 2012 by four partners, there are now three more and the firm now has 14 lawyers. In a unique set-up all are co-owners and receive an annual performance-related bonus from the profits. It is also one of the few firms to have an equal balance of men and women in senior positions. The past year has been the firm’s best yet, with a turnover of £2.8 million.

The firm has a strong focus on senior executives in the financial services and insurance industries, as well as senior doctors, and partners and senior employees in law, accountancy, and management consultancy firms. It does not act for bulge bracket investment banks to ensure it is conflict-free, making it a key choice for referrals from other large law firms. It also has built an expertise in fighting discrimination and whistleblowing cases.

The firm represented Alex Osipov, the chief executive of International Petroleum, in his groundbreaking high-value case against his employer and its senior officers, establishing the entitlement of whistleblowers to claim against individual directors. It also acted for Arjuna Weerasinghe, a surgeon unfairly dismissed after whistleblowing on poor standards of care at a hospital.

We have also been rated by our peers and clients to maintain our standing as the leading firm advising senior executives in employment law in the Legal 500 legal directory. What sets us apart is that every one of our partners has been rated.

The Legal 500 states:

As ‘one of the leading claimant firms in the market’, Brahams Dutt Badrick French LLP is ‘completely committed to getting the best outcomes for its clients’ and is ‘a well-established and competitive boutique player in the market’. Managing partner Gareth Brahams is ‘both an excellent lawyer and a brilliant tactician’ and ‘the right man to have on your side and the wrong man to be against’; he recently represented an individual in a high-value whistleblowing claim. Clients also praise the ‘impressive and committed’ Arpita Dutt; the ‘tenacious’ Polly Rodway; the ‘ commercially minded’ Nick Wilcox; and Cerys Williams, who ‘strongly protects her clients interests’. Associate Samantha Prosser is also singled out as ‘a rising star that is a real credit to the firm’.

Highest whistleblowing damages in a landmark employment case

Employment Law News

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Highest whistleblowing damages in a landmark employment case

Gareth Brahams, Managing Partner and Nick Wilcox, Partner, of employment law specialists Brahams Dutt Badrick French LLP (BDBF) have successfully represented the claimant, former–CEO, Mr Osipov, in this landmark whistleblowing case.

Today the Court of Appeal has in Timis v Osipov upheld landmark decisions made by the Employment Tribunal and the Employment Appeal Tribunal (EAT) awarding the ex-CEO of International Petroleum Ltd, Mr. Osipov, in excess of £2 million gross. This was one of the highest sums ever awarded by an Employment Tribunal.

Shareholder and Chairman instructed to fire whistleblower, Mr Osipov

Frank Timis, a director and the largest individual shareholder in International Petroleum, had been exposed for instructing fellow director and Chairman of the Company, Tony Sage, to fire Mr Osipov for whistleblowing.

Shareholder and Chairman held personally liable for whistleblowing damages

Under the whistle blowing provisions of the Employment Rights Act, on behalf of Mr Osipov, BDBF successfully sued not just the Company but Frank Timis and Tony Sage personally.

This ruling establishes that if an individual director is behind the decision to dismiss someone for making protected disclosures, they can themselves be held personally liable and suffer the financial consequences.

Gareth Brahams, Managing Partner of BDBF, says of their victory: “We are naturally very pleased with this decision, first and foremost because it upholds a very substantial award of compensation that is long overdue to our client. We are also happy to have had the principle of individual as well as corporate liability for victimising whistle blowers by dismissing them upheld at this level in the Courts. We believe this will encourage decision makers to think more carefully than ever before giving instructions to dismiss an employee for whistle blowing and will encourage employers to take steps to train their staff so as to prevent any such actions occurring in the first place”

About BDBF

Brahams Dutt Badrick French LLP are a leading specialist employment law firm based at Bank in the City. If you would like to discuss any issues relating to the content of this article, please contact +44(0)20 3828 0350 or your usual BDBF contact.

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Tom McLaughlin features in Ignites Europe – questions on salary history may become a thing of the past

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Questions about prospective employees’ previous salary are common during financial services firms recruitment processes, but they could be on their way out. Siobhan Riding of Ignites Europe writes that State Street Global Advisors and MFS are closing the door on the practice as part of efforts to reduce the gender pay gap that exists in financial services.

Will other asset managers and financial services firms follow suit?

The thinking behind this is that employers use their knowledge of previous salary and bonus information as a reference point and bargaining chip when making compensation offers to new recruits. But, this can perpetuate the disparity in pay between male and female executive’s earnings. The upshot is that women are likely to be paid a lower starting salary and bonus by their new employer. This could lead to women trying to catch up with their male peers’ earnings throughout their professional life, and the income disparity following them into retirement.

The ban on asking about previous salaries has been implemented in certain US states such as New York and Massachusetts, but in a bold move, State Street and MFS are voluntarily choosing to extend it across their international businesses in an effort to increase wage transparency and bridge the gender wage gap.

Tom McLaughlin, specialist employment lawyer at BDBF LLP, says banning employers from asking about pay before they make an offer of employment is a way of levelling the playing field. It forces the employer to make an offer on the basis of what it is prepared to pay the individual, rather than what it thinks it needs to pay to entice the individual away from their current job.

There may be more reticence in implementing the ban in European financial services firms or entities. There are stricter compensation rules, whereby firms need to know the detail of previous earnings in order to buy out a bonus or unvested shares.

Tom comments that there are ways around this, as firms could make an offer of employment first, after which point they could offer the buy out.

Tom McLaughlin is a senior associate specialising in advising senior executives and businesses on severance issues for executive and c-suite employees, employee competition, the protection of confidential information and post-termination restrictions. He regularly advises overseas businesses wishing to establish a market presence in the UK. Tom can be contacted on tommclaughlin@bdbf.co.uk or on 0203 828 0366.

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How can an employer give an opinionated reference?

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The High Court has clarified the scope of an employer’s duty when giving a reference in respect of a former employee.

The law provides that an employer must exercise reasonable skill and care to provide a reference which is true, accurate and fair. If it fails to do so, then the former employee may have a claim against the ex-employer for negligent misstatement. The High Court has ruled on how far the employer’s duty extends.

This case concerned Mr Hincks, an independent financial advisor, who was employed by CIFS but had authority to conducted FCA-regulated activities as the appointed representative for Sense Network. Following Sense Network’s internal investigation into alleged breaches of its pre-approval processes, it terminated Mr Hincks’ authority on the basis that he had committed repeat breaches and had been “malicious” in doing so. Mr Hincks’ conduct meant that Sense Network had to offer over £12,000 in compensation to its clients. Mr Hincks later sought a reference from Sense Network. The reference provided referred to the allegations, the investigation, the compensation paid to clients, and Sense Network’s conclusion that he had “knowingly and deliberately circumvented” the pre-approval process.

Mr Hincks brought a claim for negligent misstatement, arguing that Sense Network’s reference had not been true and accurate. He said that the investigation had been an “inadequate sham”, and that it had been negligent of Sense Network to report its opinions arising from the investigation without having checked that it had been procedurally fair.

The High Court held that a reference-giver relying on the findings of a previous investigation is not required to review the procedural fairness of that investigation. Instead, the inquiry should be into whether the investigation had a proper and legitimate basis; if it did, reliance upon it was reasonable. A more stringent review may only be appropriate if there was some ‘red flag’ suggesting that something had been amiss with the investigation.

Many employers tend to give factual references, but for those who do not, this case helps to demonstrate what is included within the duty of care they are under. Additionally, where the employer is under regulatory duties to provide particular information to a prospective employer, then it must do so by reference to all information and documentation available to it.

Hincks v Sense Network Ltd [2018] EWHC 533 (QB)

Recording employee’s communications in UK financial services firms

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What are the rules on recording employee communications in financial services firms?

In 2017, the FCA announced an increase in the number of financial services firms who must record communications made by their employees.

The announcement was part of the FCA’s attempts to align financial firms with Brussels rules, known as Mifid II. In spite of Brexit, the FCA has told firms that they must continue to comply with their obligations that derive from EU law, including Mifid II.

Who is affected by this announcement?

Anyone who works for an investment bank or asset manager, inter-dealer brokers, investment managers, stockbrokers and corporate finance firms that execute orders or carry out transactions for the firm or its clients

What has changed?

Firms who were not previously subject to the duty to tape telephone conversations (such as corporate finance firms) are now required to do so.

How can employers monitor their employees?

Financial firms have sophisticated computer programs in place which record telephone lines, check emails for key words and look out for suspicious trading behaviour. It is not uncommon for an employer with an agenda to trawl through an employee’s emails or Bloomberg chat records to find something damning. Of increasing prevalence is keystroke technology, which records all of the words typed onto a keyboard during the working day.

Even personal mobile phones are not immune from employer’s prying eyes? Employers in the financial services industry have an obligation to make sure that employees are not using their personal communication devices to evade FCA rules or share confidential client information.

The FCA’s rules state that

‘A firm must take reasonable steps to prevent an employee or contractor from making, sending or receiving relevant telephone conversations and electronic communications on privately-owned equipment which the firm is unable to record or copy.’

What are the implications on employees of recording communications?

Employees who misuse their employer’s electronic communication systems – by disclosing confidential client information, for example, could face disciplinary action, which could include dismissal without notice and significant financial consequences including loss of stock and deferred bonuses arising from being a bad leaver. Additionally, there are the longer-term consequences on an employee’s regulatory status. If the monitoring uncovers behaviour which the employer considers is a breach of the conduct rules or stains that individual’s fitness and propriety, it will be revealed on a regulatory reference to any new employer and the taint may follow the employee for the next 6 years.

What are employee’s rights and employer’s obligations?

Even though an employer may have a duty to monitor calls, they still need to approach the matter with caution.

Employer’s have legal duties to ensure that the way in which it monitors work is for a clear and justified purpose. This requires notification in advance of monitoring, and the information gained should be kept securely and only used for the purpose for which it was carried out.

If an employee is approached by their employer and asked to hand over their personal phone for inspection, they’ll need to think very carefully before doing so. Is there a legitimate reason to search a personal telephone? What is the employer’s basis for doing so? Employees have a right to a private life and the employer cannot, without good reason, ride roughshod over that right. The employer should not be acting in any way that would seriously damage or destroy the employee’s confidence or trust, unless it has reasonable cause.

The employee must weigh up the risks of not complying with their employer’s request. A refusal to do so could count against the employee in a disciplinary hearing. Even if the employer’s concerns are baseless or overblown, a refusal to co-operate in the investigation is likely to be sufficient to fuel the suspicion that the employee has done something wrong.

For all financial services employees, this does beg the question whether work communications on a private phone can ever be private.

Tom McLaughlin is a Senior Associate specialising in employment law and misuse of confidential information cases at City employment law firm BDBF LLP.

Made in Dagenham – a clarion call for equal pay in the City

Today, 7 June 2018, marks the 50^th anniversary of the strike by 187 female sewing machinists at a Ford car factory seeking sex equality, a story that inspired the 2010 film ‘Made in Dagenham.’ The strikes led to a meeting with Barbara Castle, then Employment Secretary, to discuss recognition and inequality of pay for females and, two years later, led to the inception of the Equal Pay Act 1970.

Further developments have occurred since, including the introduction of the Equality Act 2010 which replaced the 1970 Equal Pay Act, the launch of a Women and Work Commission, and the appointment of a Minister for Women and Equalities. However, 50 years on there is still a significant gap in pay between men and women. The World Economic Forum predicts this gap will not close for another 217 years.

Gender Pay Reporting

The latest initiative to address the imbalance in pay is the gender pay reporting obligation. Since 6 April 2017 organisations with 250 or more employees have been obliged to publish the following information each year:

overall gender pay gaps, showing the mean and median pay for both sexes;
the number of men and women in each of the 4 pay bands (lowest to highest salaries) to show how pay differs at different levels of seniority; and
information on pay gaps relating to bonuses and the proportion of males/females who received a bonus.

Over 10,000 firms have disclosed such information following the first round of mandatory reporting in April 2018. Of those, 78% of organisations reported a gap in favour of men. In addition, men were paid more than women in every single industry; there is no sector that pays women more than men.

Gender Pay Gap in the Financial Services Sector

One of the largest disparities in gender pay can be found, unsurprisingly, in the financial sector.

According to research by law firm Fox and Partners, the gender pay gap in the financial sector is 22% for salaries and 46% for bonuses. Compared to the average UK gap of 9.7% this is a startling amount. A number of institutions within the financial sector are also performing much worse than this average – 43.5% at Barclays Bank Plc, 36.9% at Nomura International Plc, 36.5% at RBS and a 36.4% gap at Goldman Sachs. The gap is also substantially enlarged for individuals paid more than £1 million per year – the gender pay gap then rises to 91% in favour of men.

The glass ceiling

There has been a lot of discussion as to the reasons for this divergence. Looking at the statistics, one of the clearest explanations is the lack of female representation at the highest levels within financial institutions. According to a Financial Times study in 2017, women account for 58% of the total workforce at junior levels. However, this drops significantly to around 25% at senior levels. When this is broken down further, studies show that nearly 23% of board directors are women, but only 1 in 7 women are represented on executive committees. At JP Morgan only 9% of higher paid jobs are held by women.

Steps are being taken to address the imbalance at leadership levels in financial services. Independent reviews have been undertaken and non-binding and voluntary recommendations have been made; these include increasing the representation of women for FTSE100 executive committees to 33% by 2020 and requiring FTSE350 companies to disclose the numbers of women on their executive committees. So far, the government has resisted some calls for binding recommendations and/or quotas on boards or executive committees. The hope is that these various initiatives, together with the increased transparency around gender pay gaps as a result of the new reporting obligations, will drive culture changes within organisations. Not least because at present, there are no sanctions for firms who report a gender pay gap.

What options does an individual have in light of the gender pay reports released by their own employer?

Our experience as employment lawyers acting for senior individuals is that despite the advent of gender pay gap reporting, the issues of pay and reward are still shrouded in secrecy. Differentials have started to appear even in sectors where pay scales exist due to the payment of bonuses in addition to basic pay. In the NHS for example, full-time male consultants are paid 12% more than their female counterparts and male consultants are six times more likely to be paid bonuses. Pay differentials have been revealed to affect every professional and regulated sector.

It is however important to remember that a gender pay gap may not necessarily mean that there is a difference between the salaries or contractual bonuses of men and women performing like for like work or work of an equal value. If there is, this may give rise to a claim for equal pay. Alternatively, any less favourable treatment on the basis of sex, such as being passed over for job offers, promotions, discretionary pay rises or bonuses, may give rise to a claim for sex discrimination instead.

Specialist employment advice should be sought if you believe you have a claim for equal pay or sex discrimination. If so, the first step would be to request the information required to make an assessment as to whether there is a difference in pay between men and women performing like work and/or any less favourable treatment.

Stopping you enquiring about any discriminatory pay gap is unlawful

Whilst companies can request that employees keep their salaries confidential, section 77 of the Equality Act 2010 makes pay secrecy clauses in contracts of employment unenforceable to the extent that they prevent an employee from finding out whether or to what extent pay is connected to his/her gender, age, race, sexual orientation or disability, for example. Section 77 also makes it unlawful to victimise an employee for raising the connection between pay and gender or any other discriminatory reason for a pay gap to their employer.

Therefore, if a woman asks her male colleagues about how much they are paid because she is concerned that she is being paid less for carrying out the same or similar work, it would be unlawful for the employer to sanction her in any way for asking the question.

If any differences in pay or treatment are identified then further options could include submitting a formal grievance to the employer to address the situation.

Lessons from Dagenham – a collective approach

One of the key lessons from the Dagenham strike is the importance of collective action. City executives are largely non-unionised and pay negotiations happen behind closed doors on an individual basis. The era of asserting individual rights has moved generations away from the shield provided by collectivism. The power of collective movements has been palpable lately from #MeToo and #TimesUp putting a spotlight on sexual harassment, objectification and representation of women, to the organising by trade unions of individuals contractually classified as ‘self employed’ to obtain workers rights for them.

From our experience of advising many City women, raising such issues under the banner of ‘discrimination’ is perceived to be job or career ending. There is strength in unity, lots of practical advice that can be shared when women talk to one another whether within City women’s networks or in external professional networks, and there is power in bringing collective grievances to change the practices and culture of City employers. City employers may begin to understand that they cannot isolate employees easily and that such complaints call for systemic change.

Only time will tell whether we will see the gender pay gap in the financial sector narrow over the next annual gender pay reporting dates. One can only hope that the search for recognition and equality driven by the Dagenham factory girls moves its way quickly and persuasively into the City without a further 50 years going by.

Arpita Dutt is a Partner and Samantha Prosser is a solicitor at leading employment law firm BDBF both specialising in equality law.

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