Employment Law Case Update: BMC Software v Shailch

Working in the sales team at BMC Software Ltd since 2004, Ms Shaikh was considered a good worker who performed well, and therefore received various promotions during her employment. Ms Shaikh was awarded two pay rises on “merit” and by July 2013 her basic pay was £60,000.

Ms Shaikh then compared herself to two male colleagues. Mr A also joined BMC in 2004 as an Account Manager, progressing to a Senior Account Manager and finally Account Executive. Pay rises for Mr A were also on “merit”, “merit adjustment” or “general promotion”.  By 2010, Mr A’s basic pay was £75,000. 

Mr B became a Senior Account Manager in 2001. He was, in due course, promoted to Account Manager Master and subsequently an Account Executive, receiving “merit” increases on four occasions. After 2010, Mr B’s basic pay was between £60,000 and £68,000.

BMC had no record of any assessment or of the decision-making process in relation to any of the pay increases for Ms Shaikh, Mr A or Mr B. In June 2014 Ms Shaikh raised a grievance, part of which related to her finding out that Mr A had a higher basic pay than her. The grievance was not upheld and the report found that the differences in basic pay were due to differences in grading, entry level and promotions.

 Ms Shaikh appealed the decision, but it was not upheld. Ms Shaikh resigned the following day with immediate effect, raising seven complaints in her resignation letter, one of which was the difference in her pay when compared to Mr A and Mr B.

Ms Shaikh successfully brought an equal pay claim in the Employment Tribunal. She was also successful in her claims for constructive dismissal (based on breach of the sex equality clause), wrongful dismissal and discrimination by constructive dismissal under the Equality Act 2010. The Tribunal stated that the equality clause was the basis for trust and confidence between employer and employee.

BMC appealed to the EAT on five grounds, but they found that the disagreement concerning the damage to the relationship between an employer and employee resulting from the breach of the sex equality clause was not arguable and was dismissed at a preliminary hearing.

The EAT held that the Tribunal had been wrong to find that a breach of the sex equality clause, constituting constructive dismissal, also constituted sex discrimination.

It considered that section 70 of the Equality Act 2010 prevented the discrimination provisions from applying in a breach of a sex equality clause. Since there was no sex discrimination claim, a remedy could only be made under section 132 when discussing equal pay claims.

The decision made by the EAT is important because it summarises the causes of action and remedy available to employees who believe there had been a breach of the sex equality clause.

Employers should be aware of this decision when defending claims of equal pay, constructive unfair dismissal and discrimination, to ensure that any invalid claims are struck out.

This article is from our weekly Employment Law Newsletter published on 02/11/2017.  If you would like to receive this newsletter directly and be kept up to date with recent cases and Employment Law news, email events@warnergoodman.co.uk.

ENDS

This is for information purposes only and is no substitute for, and should not be interpreted as, legal advice.  All content was correct at the time of publishing and we cannot be held responsible for any changes that may invalidate this article.