Is my bonus scheme discriminatory?

I am a board director of a group of companies. The usual bonus scheme has been changed this year. The result is that the bonus scheme will apply differently to different board members. Specifically myself and the only other female director have a bonus scheme which kicks in at a lower rate for us compared to our male colleagues. It equalises at higher performance levels, but initially our colleagues will earn a higher % bonus for lower company performance than we will. This will be justified by saying we carry out central functions and those other directors have earlier kick-ins because they relate to operational areas. Because we are all at director level we don’t duplicate jobs so it’s hard to compare directly. The impact of the changes only reduces the female’s bonus though and not the men. Is this discriminatory?

I note from your question that your usual director bonus scheme will now apply differently to different board members. Specifically you and the only other female director have bonus schemes which kick-in at a lower-rate when compared to your male colleagues. If you (and your female colleagues) are being treated less favourably than your male colleagues because of the application of the new bonus provisions, you may have a case of indirect discrimination. You will be protected by the discrimination provisions if you are an executive director. Your employer would need to show that the payment structure of the bonus scheme is objectively justified. Where a provision, criterion or practice (PCP), such as your bonus scheme, is “a proportionate means of achieving a legitimate aim” then this will be objectively justified and there will be no indirect discrimination. An employment tribunal would carry out a balancing act between the degree of discrimination caused and the object or aim to be achieved, taking in to account the surrounding circumstances.

I would suggest you speak to your employer informally about the situation and ask for further clarification of how the bonus payments have been established. If you feel that your employer cannot justify the payments under the bonus scheme then you should raise a written grievance regarding the situation. If this does not resolve matters then you should seek further independent legal advice regarding your specific situation.

Please note that any claim for sex discrimination has to be submitted to an employment tribunal within three months of the act of discrimination. You will also need to go through the Acas early conciliation process before any claim can be lodged.

Should you require any further clarification on the above points then please do not hesitate to contact Tracey Guest on 0161 672 1425.

*Helen Frankland assisted in answering this question.

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