King & Spalding's Jules Quinn on why the BBC's latest approach to setting pay is 'very risky'
City employment partner says the broadcaster may be left exposed after moves to address gender pay inequality
January 31, 2018 at 06:33 AM
4 minute read
What a fortnight it has been for the BBC, not least the HR and PR departments, in response to the recent outcry on inequality of pay within the corporation.
First, former China editor Carrie Gracie makes some very public allegations over illegal pay. Then, this week, the BBC floats announcements of pay caps and pay cuts for male journalists, with further news that 170 disgruntled women are lining up to claim compensation. This was then followed by the publication of the PWC-led report which concluded that there was "no gender bias".
A bit of a rollercoaster.
Yes, the pay caps and cuts grabbed headlines but once the dust has settled on the salary reductions for Huw Edwards and Nicky Campbell and friends, the BBC is left with a very risky strategy that may leave it exposed in the longer term. Organisations and senior figures within them, of course, have a responsibility to share the pain of poor financial performance. It is laudable for a CEO to forgo a bonus or take a pay cut when profits are down but this latest initiative within the BBC is not top-down leadership; rather it is asking individual employees to take the hit when the institution has got it so badly wrong.
Why is this so risky? First and foremost, asking someone to accept a pay cut veers dangerously into constructive and unfair dismissal territory because an employer cannot insist on pay cuts or reducing pay without consent. A careful process and rationale must be applied. Rather than seek a solution at an institutional level, it puts the burden on the men who did not create this inequality in the first place.
Indeed, in a scenario such as the BBC, journalists could claim that they were pressured into the cut or that the cut was based exclusively on their gender. That would be discrimination and leave the corporation vulnerable to employment claims from those making the sacrifice.
Issuing pay cuts directed at men is tantamount to accepting that the BBC's pay structure is wrong, supporting the claims from disgruntled female presenters (PwC acknowledged that the pay mechanisms at the Beeb had been "far from perfect"). The warning signs only took a few days to surface. By 30 January, ahead of evidence to parliament, some 170 former or current female BBC employees are said to be sizing up cases for financial compensation to cover the discrepancies in pay and other benefits provisions including pensions. These could run into the hundreds of thousands of pounds for each individual.
At the very least, the BBC's admission is compelling evidence that the salary structure and absence of pay grades is wrong. There has historically been no moderation of the pay structure with reference to these key drivers – pay awards should be blind to protected characteristics and a transparent pay structure is required. Statistically, women do not do well in "black box" remuneration strategies.
Such headline-grabbing stories may provide an initial uplift but they can soon plummet when it comes to longer-lasting reputational issues. How would any employer hope to attract good quality candidates and hold on to the good ones it has with such an HR strategy? This was compounded further this week with another hurried idea of an arbitrary £320,000 pay cap for all news presenters irrespective of gender. Such speedy – and structurally dramatic – responses are not always conducive to a positive work environment and may foster such animosity between employees.
All major employers should be keeping a close eye on how the BBC situation plays out. We are less than three months away from the Gender Pay Reporting Regulations coming into effect. From 1 April this year, all employers with more than 250 workers will have to produce gender pay reports. Many employers have already done their data trawl; few have statistics to shout about and so the messaging of explanations, targets and plans to achieve parity between male and female employees is now paramount.
The gender pay gap is a very complicated and delicate topic. Employees' career choices and remuneration are based on a whole swathe of variables, whether that is the nature of their work, experience, seniority, working hours, overtime, performance, targets, bonus structure and so on. Discrimination within these certainly remains a problem but employers need an institutional response. They need to put the most effective structures in place so all employees, irrespective of their gender, are treated fairly and appropriately. Knee-jerk decisions may appease immediate reputational hits but they may also be unlawful and compound the problem rather than solve it.
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